The Austin Water and Wastewater Commission Budget Committee convened on June 20, 2025, to discuss the financial forecast and operating requirements for the upcoming fiscal year. The meeting began with Joseph Gonzales, Assistant Director of Financial Services, providing an overview of the budget development process. He noted that the proposed budget is still being finalized by the city’s budget office and the City Manager’s Office, with a public release scheduled for July 11, 2025. This budget will be presented to the City Council on July 15 and subsequently to the commission on July 16.

Gonzales emphasized that the financial forecast serves as a framework for the budget process, highlighting significant changes that will be incorporated into the proposed budget. Following his introduction, Songli Floyd from Austin Water Finance detailed the cost drivers impacting the forecasted operating requirements for fiscal year 2026, which are projected at $831.7 million, an increase of $58.1 million from the current fiscal year’s amended budget of $773.6 million.

Floyd categorized the cost drivers into citywide and department-wide factors. The citywide cost drivers include a 3% wage adjustment, resulting in a $4.4 million increase, along with health insurance costs and retirement contributions, which add $1.1 million and $600,000, respectively. Additionally, fuel and maintenance costs for fleet management are expected to rise by $400,000.

The department-wide cost drivers revealed a more substantial impact, with a $21 million increase in transfers due to cash financing for capital improvement projects (CIP). Debt service requirements are projected to increase by $15 million, attributed to growth in the capital spending plan and scheduled debt service payments. Floyd also explained the conversion of a previous retention bonus into permanent salary increases, which will add approximately $8.4 million to the budget.

Other notable increases include $1.59 million for chemical and electric services, $1.6 million for inflation in contractual and commodity costs, and $1 million allocated for costs associated with the city’s rebranding initiative. Additionally, there is a projected $7 million increase for wildland conservation and land management consulting services.

The meeting concluded with a clear outline of the financial landscape for Austin Water, setting the stage for the upcoming budget discussions and decisions. The commission will reconvene to review the proposed budget following its public release, ensuring that all stakeholders are informed and engaged in the budgeting process.