Austin Water FY27-FY31 Forecast Update May 2026 Austin Water Austin Water Financial Team Introductions Joseph Gonzales, Deputy Director of Business Services Christina "Tina" Romero, Acting Assistant Director of Financial Services Songli Floyd, Budget & Accouting Division Manager Nam Nguyen, Acting Financial Management Division Manager Li Yang, Budget & Accounting Financial Manager II Frida Guo, Capital Asset & Accounting Financial Manager II Shierin Shoghi, Rates & Forecasting Financial Manager II 2 Agenda Financial Condition/Budget Considerations Rates/Affordability Inflationary Cost Increases Growing Capital Spending Plan Financial Metrics Summary Discussion 3 Austin Water Financial Condition Austin Water Financial Condition Revenue Considerations Rate increases needed to cover increasing operating and capital costs 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 increase Growing Capital Improvements Plan Continue debt management strategies Financial Performance Significant drop in operating cash reserves Cash financing of CIP below financial policy target 5 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 6 Bond Ratings Rating/Outlook Credit Highlights Fitch AA-/Stable Low leverage Moody’s Aa2/Stable DSC 2.3x Days Cash on Hand of 489 (neutral) Improving liquidity of 270 days cash Factors that could result in rating downgrade CIP cost increase not supported by adequate rate adjustments Significant increases in debt burden that exceeds 5x revenues S&P AA/Stable Adequate all-in DSC (2.9x) Strong liquidity (327 days) Material deterioration of all-in DSC and liquidity levels despite planned rate increases Sustained leverage exceeding 10.0x Sustained weakness in liquidity near 200 days cash or debt service coverage nearing 1.5x 7 FY27-FY31 Forecasted Rates $1,200.0 $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 s n o i l l i M n I Total Available Funds Total Requirements -4.8% FY18 Actual $631.3 $631.2 Updated Rate Incr Forecast -4.8% 7.8% …
City of Austin FY2027 Budget Development Timeline Citywide Budget Dates Budget Kickoff Forecast Report Published Forecast Presentation to Council 1st Water & Wastewater Budget Committee 2nd Water & Wastewater Budget Committee Proposed Budget Published Proposed Budget Presentation to Council Water & Wastewater Commission JAN 15 APR 13-15 APR 21 May 8 TBD JUL 13 JUL 16 JUL 29 Approved Budget Adoption AUG 12-14 1
