City of Wichita Falls

Wichita Falls, Texas, United States

Wichita Falls is a city located in Wichita County in Central-North Texas, about 15 miles south of the Texas-Oklahoma border. It is home to approximately 104,553 residents and serves as the county seat for Wichita County. Wichita Falls provides water to 104,000 residents and businesses located in the city, as well as serves as the regional water provider for much of North Texas for an estimated total of 150,000 people and 15 wholesale customers.

In 2010, the city entered a drought period that persisted until 2015 and significantly reduced its water supply to an unprecedented level of 19%, ultimately forcing it to reuse potable water. Wichita Falls is seeking to develop a reservoir site through Lake Ringgold to better equip the city for future climate events. Wichita Falls asked Raftelis to develop an economic analysis about the impact of Lake Ringgold to the area and to provide recommendations regarding the city’s rate structure based on its current objectives and conditions to facilitate future endeavors including and beyond the reservoir.

Ultimately, the scope of Raftelis’ work with Wichita Falls was to equip the city with the necessary tools and resources to set rates based on future water needs and demands. Specifically, Raftelis conducted a 2021 Water and Wastewater Cost of Service and Rate Study as well as developed an economic impact analysis of the reservoir and built a 10-year financial planning model to forecast revenue and revenue requirements for the utility. Raftelis incorporated the Lake Ringgold project into the model as well as funding alternatives to ensure its competition. For the economic impact analysis, Raftelis referred to the Wichita Falls Metropolitan Statistical Area as its study region, which incorporates three counties (Wichita, Archer and Clay). Raftelis concluded that the Lake Ringgold Reservoir project would produce significant, positive economic benefits for the study region. Specifically, the total economic impact is estimated at nearly $235 million dollars (in 2018 dollars) with 1,589 jobs created and more importantly, restored water security. Raftelis also found that while the construction will cause a loss in property tax revenue for Clay County, the construction of additional lakeside property will more than make up for the loss. Lastly, the loss of cattle ranching will be offset by larger gains from recreation. Ultimately, based on the financial plan results, Raftelis concluded that rate increases would be necessary to satisfy the additional debt obligations required to fund the reservoir in 2030.