Our Water:  What you need to know FAQ

I used the same amount of water as I did at this time last year. Why am I spending significantly more now compared to then?

On November 1, 2014 billing for water use was increased by 10 percent to help pay for a 10.2 percent increase in fees passed down from the North Texas Municipal Water District (NTMWD), Plano’s water supplier.

The NTMWD has raised rates 63.8 percent since 2010. The Plano City Council attempted to absorb the additional charges from the District initially, but has since had to raise rates to residents to offset the increases.  In continuing efforts to minimize the overall effect of the increases, the Plano City Council has elected to keep all minimum water and sewer charges static. Beginning November 1, 2015, a varying rate increase in volumetric tiers in water rates will appear on bills to cover the additional 11.2 percent increase being passed down from NTMWD.


 Fiscal Year  2010-11  2011 -12  2012-13  2013 -14  2014 -15 2015 -16 
NTMWD / 1,000 gallons
 $1.37  $1.49  $1.70  $1.87  $2.06  $2.29
 NTMWD % increase
 9.6% 8.7%   14.1%  10.6%  9.6%  11.2%


My bill is drastically higher than it was earlier this year, and my neighbors say the same thing. Why does the City feel like the system is running properly when I and my neighbors don’t think we are using the water that the meters show?

In July, the City began receiving several calls and e-mails from customers regarding their water bills. Questions ranged from wondering if there was a sudden change in rates to asking for an inspection to see if their water meter was broken.  The City does manual checks of meters every year to ensure accuracy.  

While rates have been steadily increasing over the past few years, they have not changed since last November’s water statements. As is usually the case, July and August were regular hot North Texas months, but what’s not the same is the large increase in demand for water now that twice-per-week watering is allowed. 

The demand for water at the end of summer increased more than one-and-a-half times what it was earlier in the year.  The lifting of water restrictions essentially allows four-times more watering than what has been allowed during the past several years when restrictions were initiated. All other District cities, and many other North Texas cities, also noticed the same demand increase with the alleviation of restrictions. The increase is attributed to the rise in residential demand to use lawn irrigation, which is the highest use of water. 


What is the North Texas Municipal Water District and why does it keep raising water rates by such high percentages?

The North Texas Municipal Water District (NTMWD) can be considered a co-op distributor of fresh water for use by several “member” and “customer” cities in North Texas. The NTMWD was developed as a political subdivision of the State of Texas and is governed by a board of directors appointed by the member cities. The District is responsible for acquiring, treating, and distributing potable water, and to collect, treat and dispose of waste water, both liquid and solid, in order to reduce pollution, conserve and develop the natural resources of Texas. NTMWD is increasing rates to meet the growing needs of the region.  A detailed explanation can be found at their website here:
https://ntmwd.com/wholesale_water_rates_funding_future_needs.html



Who are the District’s member cities?
Allen, Farmersville, Forney, Frisco, Garland, McKinney, Mesquite, Plano, Princeton, Richardson, Rockwall, Royse City, Wylie


Who are the District’s customer cities?

Ables Springs WSC, Bonham, Caddo Basin SUD, College Mound SUD, Copeville SUD, Crandall (Kaufman Four-One), East Fork SUD, Fairview, Fate, Forney Lake WSC, Gastonia-Scurry SUD, Greater Texoma Utility Authority (GTUA), Josephine, Kaufman, Kaufman four-one, Lavon SUD, Little Elm, Lucas, Melissa, Milligan WSC, Mount Zion WSC, Murphy, Nevada WSC, North Collin WSC, Parker, Prosper, Rose Hill SUD, Rowlett, Sachse, Seis Lagos UD, Sunnyvale, Terrell, Wylie Northeast SUD


What’s the difference between member and customer cities?

There are three main differences: 
1. Member cities are the only guarantors for the District’s debt and are responsible for a proportional share of the debt issued while they are a member.  
2. Member cities appoint representatives to the NTMWD Board of Directors.  Customer cities do not.
3. Customer cities have a 5 cent markup on their water rates per 1,000 gallons.


I understand that we are paying for water that we are not able to use through a system known as “take or pay.” What is that?

Under the North Texas Municipal Water District (NTMWD) contract, cities pay for water based on their greatest single year of usage.  In 2001, Plano used nearly 27 billion gallons of water, at a time when its population was booming.  Since then, the city has been required to purchase that amount every year, even though the community has not reached that consumption level since. 

water-used-chart


Why do we use the “take or pay” system?  

In the 1950s our region experienced an historic drought.  Many communities in Collin County, with a population of only 42,000 came together to form the NTMWD.  The founding cities and other neighbors who later became member cities, were all small, agriculture-based communities that needed to work together to secure a resource that would be vital to future growth. In order to meet peak demands, NTMWD builds infrastructure and acquires water to supply the member cities. The revenue received from its member cities and customers pays for the infrastructure in place and for future needs.


How much has Plano spent on water we did not use?  

In the last three years, Plano has paid for 20 billion gallons of water that its residents and businesses did not use, resulting in approximately $26 million in water that the city was not allowed to use due to the need to meet water conservation goals set during the most recent drought. Because the “take or pay” system goes against encouraging conservation, the City of Plano is joining other cities to work with the District to address the pricing structure for water.  Since 2001-02, Plano has spent $68 million on water we did not use.  Last year alone, Plano paid more than $13 million for water it did not use.

amount-spent-on-unused-water


What is Plano doing to promote change to the “take or pay” contract?

The City of Plano supports an initiative being set forth by the North Texas Municipal Water District (NTMWD) to create a series of meetings designed to work with the member cities to discuss and develop a more equitable and sustainable rate structure for water service. These meetings are anticipated to begin in late 2015.


What does Plano hope to gain from a contract change?

The long-term goal for changing the contract is to develop a more equitable level of billing based on usage as opposed to paying for water based on our greatest single year of usage.  Under the current contract, this rate can only go up. It can never adjust down. NTMWD member cities are asking to work with the NTMWD to re-evaluate the water rate methodology to account for water conservation needs.  The hope is that an approach will be developed that supports responsible conservation practices, while also starting to limit the large percentage cost increases experienced during the last several years.


How much water is Plano using compared to how much it is paying for?  

In 2001, Plano used nearly 27 billion gallons of water, at a time when its population was booming.  Since then, the city has been required to purchase that amount every year, despite the fact that Plano will never again reach that consumption level, largely due to the city’s compliance with watering restrictions.  In 15 years, Plano has only approached 2001’s total once, in 2006.  

Plano currently uses 67 percent of its total water purchase from the North Texas Municipal Water District. The cities maximum contribution was set in 2001 during a period of high growth and no water restrictions. 


Why does the district continue to charge if it’s asking us to use less?

The recent severe drought put the North Texas Municipal Water District in a position it had never been in before, where its customers were mandated to conserve water. Conservation of water was never foreseen as a necessary measure 60 years ago when the contracts were first created. In addition to that, the needs of the cities that formed NTMWD have changed.  Collin County now has more than 780,000 residents and is projected to reach more than 1.5 million. Five member cities – Richardson, Plano, Frisco, Allen and McKinney – have populations over 100,000. Some member cities are projected to reach more than 300,000, while others are largely built-out. Small family farms have given way to residential, commercial, and industrial developments, resulting in a Collin County that no longer resembles the agriculture-based community of the 1950s. Growth balanced with the needed implementation of permanent conservation measures has created the desire to redefine the billing system to a more equitable and sustainable system.


Why not just use more water, since we are paying for it anyway?

The recent drought has shown the need for regional and local emphasis on conservation. Stage 4 water conservation measures were able to be avoided because of the decrease in demand created by water restrictions. If water were used anyway, then the supply would have reached dangerous levels which could threaten the economy of our entire region. The goal is to be responsible with water use and to design an approach that is right for our future. 


Can the North Texas Municipal Water District continue to provide water and develop new reservoirs if the rate structure is changed?  

There are many different contract options that can offer solutions while addressing NTMWD’s financial obligations. The City of Plano is supportive of working with other member cities to develop a rate structure that will support current needs and promote growth to cover future demand.


Some have suggested that the payments the member cities make under the contract are similar to a mortgage. Is the contract similar to a mortgage?  
 

This analogy is not comparable to water payments by member cities. A typical mortgage has a 15, 20 or 30 year term where an individual pays on a house while having exclusive use of the house.  At the end of the term, if all payments have been made, the individual will own the home and no longer has to make payments for the house.  Additionally, individuals can renegotiate the terms of the mortgage if they can find a willing lender. Finally, if financial circumstances change, individuals have options: They could choose to rent a room, lease the house and, if all else fails, sell the house.  

In contrast, the water contract has no definite term, because member cities are obligated to pay for the debt of the District.  Every time new debt is issued, the term of the contract is extended.  At the end of the term, the member cities do not own any asset, since the contract is for a service.  Each August 1st the water service contract resets and member cities pay in full for a contractual minimum amount of water that they are restricted from utilizing.  If that water is not taken by July 31st, the water is available for NTMWD to sell the next year.  The cities are paying for a service and not an asset.


What is the water rebate?  

At the end of their fiscal year, the North Texas Municipal Water Districts' Board of Directors vote to grant a rebate to the cities for unused water.  The rebate represents the cost of chemicals and electricity they did not incur for treating or pumping water the cities did not use.  For Fiscal Year 2013-2014, the City of Plano received a rebate of $3.9 million for water the City did not use.


What’s in the future for Plano taxpayers if the contract doesn’t change?

The District is taking final preliminary steps to build Bois D’Arc Lake, a $1 billion project.  This undertaking will necessitate 30 to 50 years of debt.  For Plano, that translates into a 10% increase in the city’s water rates every year for the foreseeable future while water conservation measures will continue to restrict water usage into the future. 

future-chart

How can I check my meter to assure it is accurate and is reflected on my bill?

The City of Plano uses an automated meter reading system to collect meter reads 4 times every day. Citizens can buy a meter key at a home improvement store and manually read the odometer on the meter and compare it to the electronic reads that the city collects and uses for billing. You can find these reads  by registering at https://egov.plano.gov/UB/loginchoose.aspx?ReturnUrl=/UB/PayBill.aspx. Historic reads  are available and allow citizens to see consumption from previous weeks, months, seasons and years.   

In general the system sends readings every six hours via WiFi and in the seven years it has been used,  we have found no inaccuracies between the odometer read and the electronic read. . Additionally, by contract, city staff performs an annual quality control check on every meter. Last, we replaced our water meters at the same time we installed the new AMR system and allow our citizens to request their water meter be pulled and tested against AWWA standards. There is a $35 fee for pulling and testing the meter, however if the meter tests outside of AWWA performance standards, the fee will be refunded to the citizen. 

How will additional Growth affect our water?

Plano has enough water through NTMWD for current and future needs. In recent years, while water restrictions have been in place, the City has used less than 19 billion gallons which is 30% less than our required contract amount of 26.7 Billion gallons.    

A new reservoir is in the process of being permitted in Fannin County known as the Lower Bois d’Arc project and will be slightly larger than Lake Lavon. This new reservoir along with conservation are critical to meeting our water needs. Here is a link to the NTMWD plans for future water:  https://ntmwd.com/futureWaterPlans.html.    

Last, irrigation has the most significant impact on our water supply.  Winter use of water for the City of Plano averages less than 40 Million Gallons per Day (MGD) while summer days use over 100MGD. The difference in usage is due to irrigation of turf and landscaping. While Plano takes pride in being a beautiful city, the City is also committed to using water wisely and promoting conservation resulting in ongoing water restrictions that allow summer irrigation of no more than two times per week.