Water and Wastewater Commission Budget Committee Meeting June 2, 2025 – 9:00am Waller Creek Center 625 E. 10th St. Austin, Texas Some members may be participating by videoconference. For more information go to: http://www.austintexas.gov/wwc Public comment will be allowed in-person or remotely by telephone. Speakers may only register to speak on an item once either in-person or remotely and will be allowed up to three minutes to provide their comments. Registration no later than noon the day before the meeting is required for remote participation. To register, call or email the commission liaison at 512-972-0332 or Vicky.Addie@austintexas.gov. Members of the public wishing to speak in person on the agenda and non-agenda related items must sign up at least ten minutes before the meeting is called to order. Budget Committee Members: AGENDA Marcela Tuñón (District 9), Committee Chair Christopher Maxwell-Gaines (District 8), Committee Vice Chair Mike Reyes (District 4) CALL TO ORDER PUBLIC COMMUNICATION: GENERAL The first 10 speakers who register to speak before the meeting in person or by noon the day before the meeting remotely by telephone, will be allowed a three-minute allotment to address their concerns regarding items not posted on the agenda. DISCUSSION ITEMS 1. Austin Water Financial Forecast Fiscal Year 2026-2030 Update 2. Review Fiscal Year 2025-2026 Budget Schedule DISCUSSION & POSSIBLE ACTION ITEMS 3. Review and possible action to approve the 2025 Budget Committee meeting schedule FUTURE AGENDA ITEMS Discussion of future agenda items ADJOURN The City of Austin is committed to compliance with the American with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request. Meeting locations are planned with wheelchair access. If requiring Sign Language Interpreters or alternative formats, please give notice at least 2 days (48 hours) before the meeting date. Please call Vicky Addie at Austin Water, 512-972-0332 for additional information; TTY users route through Relay Texas at 711. For more information on the Water and Wastewater Commission, please contact Vicky Addie at Vicky.Addie@austintexas.gov.
Austin Water FY26-FY30 Forecast Update Water and Wastewater Commission Budget Committee Joseph Gonzales, CPA Austin Water Assistant Director, Financial Services Monday, June 2, 2025 Financial Condition/Budget Considerations Agenda Rates/Affordability Inflationary Cost Increases Growing Capital Spending Plan Financial Metrics Summary Discussion Austin Water Financial Condition Austin Water Financial Condition Revenue Considerations Rate increases needed to cover increasing operating and capital costs Drought conditions impacting demand Customer Assistance Program enrollment growth Slower development/customer growth Expenditure Considerations Ongoing resiliency and service reliability investments for essential infrastructure Inflationary cost increases impacting operating and capital delivery costs Workforce investments to support retention and staff increases Growing Capital Improvements Plan Continue debt management strategies Financial Performance Significant drop in operating cash reserves Cash financing of CIP below financial policy target Austin Water Budget Development Process Revenues Cost of service rates calculated annually Revenue trend analysis and forecast updates performed monthly Operating Budget Comprehensive review of historic budget utilization performed annually Comprehensive review of open encumbrance amounts Executive team review of significant budget increases 2-year staffing plan development Capital Budget 5-year Capital Improvement Plan Development Proposed projects reviewed by a committee of Executive Team members Bond Ratings Rating/Outlook Credit Highlights Fitch AA-/Stable Low leverage Moody’s Aa2/Stable DSC over 2x Factors that could result in rating downgrade Days Cash on Hand of 345 (neutral) Improving liquidity of 350 days cash Failure to implement rate increases that support operations and growing capital program Sustained leverage exceeding 10.0x Significant increases in debt burden that exceeds 5x revenues Sustained weakness in liquidity or debt service coverage S&P AA/Stable Adequate all-in DSC (1.36x) Strong liquidity (350 days) Material deterioration of all-in DSC and liquidity levels despite planned rate increases FY26 – FY30 Rate Alignment Plan Rate Increases Necessary to Maintain Operational and Infrastructure Investments $1,100.0 $1,000.0 $900.0 $800.0 $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $0.0 9.8% 7.3% 7.5% 6.7% 3.4% 4.4% 4.6% FY24 Actual FY25 Budget FY26 Forecast FY27 Forecast FY28 Forecast FY29 Forecast FY30 Forecast 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Revenue Sources Total Requirements Rate Increase $700.9 $735.2 3.4% $767.0 $768.6 7.3% $826.9 $831.7 9.8% $886.3 $882.4 7.5% $952.2 $948.0 6.7% $996.7 $991.4 4.4% $1,043.1 $1,039.5 4.6% Revenue Sources Total Requirements Rate Increase Forecast Fund Summary FY24 Actual FY25 Approved FY26 …
