The City of Round Rock (City) is approximately 20 miles north of Austin. Once just a small suburb of Austin, the City now supports its own economic development and is home to numerous commercial enterprises. The City provides water and wastewater service to approximately 100,000 City residents and another 40,000 residents outside the City through several wholesale customers. The City first engaged Raftelis to conduct a comprehensive cost-of-service and rate study. Raftelis assisted the City in developing an equitable cost-of-service analysis and rate design that will continue to promote the quality and balance of life that is evident in its community and commercial initiatives.
In the initial study in 2014, Raftelis provided an analysis that established the cost of service between retail and wholesale customers. The City has been increasing retail rates at a nominal level to achieve revenue sufficiency for water and wastewater service, but wholesale service rates had not been updated in some time. Raftelis determined the cost of service, calculated wholesale rates according to the utility approach, and developed a three-year phase-in of rates for 2016 to 2018.
Raftelis was engaged again in 2018 to conduct an update to the cost-of-service study and develop a three-year rate forecast for retail and wholesale customers. Raftelis also developed alternative rate structures for the residential, commercial, and irrigation customer classes. Rate structures and rates for retail and wholesale customers were approved and adopted by the City Council.
Raftelis provided assistance to the Drainage Utility for the City by developing the first comprehensive financial planning model for the Drainage Utility for capital planning and annual fee development.
Additionally, Raftelis has been retained as the City’s rate expert on Docket No. 48836. Six of the City’s wholesale customers have appealed their rates. The case has not progressed to hearing.
Raftelis has been retained once again to update the City’s retail and wholesale rate study for FY 2021. This will be an update to the previous study completed by Raftelis but will include the development of a new financial planning model. In addition, Raftelis will consider the various concerns that have been raised by the wholesale customers through the rate case. The process for the study will be documented and the results will be presented to the wholesale customers and council.
Raftelis also completed the City’s latest water and wastewater impact fee study update. Each update, the study is done in conjunction with the update of the City’s water and wastewater master plans. Through this process, Raftelisworks closely with the engineers to update the land use assumptions, system demographics and capacities to determine the amount of capacity that is available for growth in the 10-year period of the impact fee study.
From the master plan, the capital improvement plan can be updated to calculate the maximum allowable impact fee. As with all impact fee studies and in compliance with Chapter 395 of the Texas Local Government Code, coordination and presentations to the Impact Fee Advisory Committee (Planning & Zoning Committee) are completed so that a recommendation to Council can be made. Participation in the public hearing, as required, to City council was also done.
