No Rate Increase for LMUD Customers in FY 2020

Lakeway Municipal Utility District (LMUD) customers can expect another year without rate increases thanks to the utility’s competent financial leadership working within budget despite an increase in expenses.

LMUD has a solid history of competent financial leadership. Over the last 8 years, the Utility has been able to keep the base water rate equal to or below that of the previous year. Wastewater base rates and volume rates have followed suit during the same 8-year period. The only rate increase has been for water volume at high tier levels, which were instituted to comply with water conservation initiatives established by Texas Commission on Environmental Quality (TCEQ), LMUD’s regulatory agency. “We have six tiers in our water rates with the price per 1,000 gallons incrementally increasing as consumption goes up. Tiered rates are a standard practice for many water utilities across the country with a proven record of discouraging customers from excessive water use,” explained Vanessa Farrell, LMUD’s Utility Billing Assistant. Farrell runs high usage reports every two-month billing cycle and notifies customers so that they can remedy any unintentional causes.

LMUD’s In District customers, who pay taxes to LMUD as opposed to Out of District customers, will see a decrease in their tax rate for FY 2020 of $0.01 per $100. In fact, despite an increase in City and County tax rates, LMUD’s tax rate has stayed the same or been reduced every year for the past 8 years. The FY 2019 tax rate of $0.1058 per $100 is almost half of FY 2011 rate of $0.2052 per $100.

“The Finance Committee appreciates the ongoing attention given, from all the LMUD staff, to expense control. Expenses have been flat for years and as representatives of the rate payers, we applaud the continued diligence in all their decisions.”
– Hal Hirsch, Secretary, LMUD Finance Committee

With LMUD’s completion of Fiscal Year 2019 on September 30, 2019, General Fund revenues finished just over 100 percent of budget and expenses were just over 96 percent of budget. Loyd Smith, LMUD’s Finance/Administration Manager said, “This is a noteworthy feat considering that within the last 24 months, three key staff members retired leaving with 64 cumulative years of LMUD experience.” Each retiree was eligible for LMUD’s retirement benefits. Current employees also saw an average of three percent merit salary increase depending on each individual’s level of performance.

Additional project-based expenses have been incurred through LMUD’s undertaking of the Out of District Wastewater (ODWW) Project which began its pilot phase in December 2018. “The ODWW Project is an initiative to bring a public sewer system to the first 17 sections of Lakeway, LMUD’s Out of District customer base, where LMUD currently only serves water since wastewater is primarily managed by on-site sewage facilities: OSSFs or septic systems,” explained Stephanie Threinen, LMUD’s Public Information Liaison who was brought on full time last summer in large part to help with communications for the Project. To keep Project costs low, LMUD opted to do the majority of the work in-house as opposed to using contractors, which has led to the hiring of six new employees, primarily for construction and installation. The Project is expected to be completed in the summer of 2026.

Because of these solid financial results, not only this Fiscal Year, but in the preceding years as well, LMUD has been able to pass along the savings to their customers. “We’re thankful for the hard work of each of our employees. Management may set the budgets, but it’s our staff who make the decisions that help us stick to it,” said Earl Foster, LMUD’s General Manager, adding “We are extremely grateful to our Finance Committee, a group of five volunteer individuals who meet once a month to review our progress, plans, and make valuable suggestions that contribute to our success.”

The LMUD staff is supported by several committees made up of volunteers from the community including the: Land Committee, Engineering & Operations (E&O) Committee, Human Resources (HR) Committee, and the Finance Committee in addition to a Board of Directors. Hal Hirsch, who has served as Secretary for the LMUD Finance Committee since 2013 said, “The Finance Committee appreciates the ongoing attention given, from all the LMUD staff, to expense control. Expenses have been flat for years and as representatives of the rate payers, we applaud the continued diligence in all their decisions.” The Finance Committee meets once a month.