Megan Navarro
DRIPPING SPRINGS — Water and wastewater service bills could look higher for residents and business owners, due to Dripping Springs City Council considering a change in the rates.
The process to review the rates — which have not been adjusted since 2022 — started in fiscal year 2025, when the city contracted with HDR to conduct a utility rate study. Then, in March, HDR presented the rate model and assumptions used to calculate the proposed rates to council, who asked the rates continue to be developed and reviewed, specifically on the fund balance, general fund and other revenue contributions.
In the most recent presentation to council May 7, deputy city administrator Shawn Cox shared the following six scenarios — all of which have different assumptions based on fund balance, general fund contribution, wastewater base fees and wastewater usage fees.
Scenario 1
• Fund balance: 30 days (8.3%)
• General fund contribution: $1,470,000
• Wastewater base fee: $82.31 residential and commercial
• Wastewater usage fee per 1,000 gallons: $7.09 residential; $7.90 commercial
Scenario 2
• Fund balance: 30 days (8.3%)
• General fund contribution: $1,225,000 (25% of sales tax)
• Wastewater base fee: $75.09 residential; $76.53 commercial
• Wastewater usage fee per 1,000 gallons: $7.09 residential; $8.10 commercial
Scenario 2.1
• Fund balance: 30 days (8.3%)
• General fund contribution: $1,225,000
• Wastewater base fee: $59.20 residential; $90.11 commercial
• Wastewater usage fee per 1,000 gallons: $8.30 residential; $8.51 commercial
Scenario 3
• Fund balance: 30 days (8.3%)
• General fund contribution: $980,000 (20% sales tax)
• Wastewater base fee: $96.75 residential; $99.64 commercial
• Wastewater usage fee per 1,000 gallons: $6.89 — residential; $8.10 commercial
Scenario 4
• Fund balance: 30 days (8.3%)
• General fund contribution: $2,500,000 (FY 2026 = $1,520,000 more)
• Wastewater base fee: $86.64 residential and commercial
• Wastewater usage fee per 1,000 gallons: $7.09 residential; $8.10 commercial
Scenario 5
• Fund balance: 30 days (8.3%)
• General fund contribution: $2,000,000 (FY 2026 = $1,020,000 more)
• Wastewater base fee: $86.64 residential; $94.44 commercial
• Wastewater usage fee per 1,000 gallons: $7.09 residential; $8.10 commercial
On the commercial side, the wastewater usage is calculated through living unit equivalents (LUE). So, whatever the LUE number is what the city multiplies the base fee by, Cox explained.
“It is considered a multiplier because … you get an additional average for every LUE. So, if one LUE is equivalent to 6,450 gallons of wastewater, two LUEs would be double that,” he said. “You pay a base fee based on the number of LUEs that you've been provided.”
Currently, the rate for commercial users for three LUEs is $165.01, but proposed scenarios show that number could go up by nearly $300.
Council member Geoffrey Tahuahua shared his concern for the “sticker shock” that the rate increases are going to bring for both residents and businesses, knowing that the last adjustment was in 2022 — city staff also noted that another proposal was brought forward to council in 2020, but was ultimately not implemented, due to COVID-19.
“I recognize that, obviously, we have debt; we have to cover that debt service. It just seems that we sort of shot ourselves in the foot by not doing. We should have probably done the one in 2020 and we probably should have had incremental ones year over year,” he said. “Right now, let's say we do [scenario] 2.1 ... let's assume that we have a downtown business that has three LUEs; they're potentially looking at almost tripling their water bill just right out of the gate, using the same amount of water and, on a resident, you are doubling it.”
Later in the meeting, echoing others across the dais, council member Travis Crow said that they should not take a vote on the proposed rates until they fully understand everything.
“The more we do understand and can justify it when we are out there [in public], the better I feel about it,” Crow said. “We're going to have to do it as a city and make our decisions. That's why we're up here: to make the hard decisions that we don't want to make. But we have to justify it to the citizens why we did it and explain it to them and if we can't understand it, how can we explain it to a citizen out there?”
Mayor Bill Foulds also noted that in reviewing the scenarios, a new factor also needs to be entered in: delinquent bills.
“We have a subset of citizens that there is no way they could handle some of these proposals and especially when we get into [20]27 and 20[28]. Commercial businesses, what I'm hearing from downtown, we've got to make things as affordable as we can and we're going to lose more businesses if we try to do too much too early,” Foulds said. “That's what concerns me is protecting the people who don't show up and, quite honestly, the vast majority of our wastewater users are new home construction and are more double-income earners who will see their salaries change. A lot of those lower-income people, they're not going to see their salaries go up anywhere near at this rate and we've got to protect those people.”
There was not a vote on the proposed rates, but the item will be brought back at the next city council meeting, held at 6 p.m. Tuesday, May 19.
To listen to the full discussion and presentation, visit the city’s YouTube page at www.youtube.com/@cityofdrippingsprings9597.
