The value of examining your water bill
As published in Lake Travis View, October 2024.
There are at least two sets of separate plumbing subsystems running through every modern home or place of business: pipes that supply clean, drinking water in and those that carry used water (known as “wastewater”) out. The water running through these subsystems must be treated for the health and safety of local residents and the environment. For properties serviced by a public water utility, quality-control measures are in place to provide the greatest assurance of reliability, but the cost you’ll pay for it depends on a variety of factors ranging from supply and demand to operational management to user diligence.
Taking time to dissect your bill can not only help you better understand your household water use but give you insights about your water provider.
Base Charge
The treatment and distribution of drinking water (called “potable water”), the collection and treatment of wastewater, and the disposal or distribution of treated wastewater (called “effluent”) are highly skilled tasks requiring the precision and dedication of certified professionals operating sophisticated equipment. Administrative staff are also needed for management and planning as well as customer care and billing. As such, the fixed-fee “base charge” on water bills helps pay for ongoing costs such as staffing, maintenance and system improvements. Through operational efficiency, a utility is able to minimize the “base charge” on a customer’s bill.

Water Volume Charge
A “volume charge” for water service is dependent on the amount of water the customer uses at their property. The Lakeway Municipal Utility District implements a tiered rate structure to help keep essential water use affordable while promoting conservation (the more water used per bill cycle, the more the customer pays per thousand gallons). LMUD, like other utility providers, charges customers for the water they use by installing a water meter at the edge of each customer’s property, which is tied to a customer-maintained service line going into a home or place of business. Utilizing Advanced Metering Infrastructure technology, these meters are read virtually, by radio signal, every 12 hours, connected to software capable of automatically notifying customers if they have a potential leak or higher-than-normal water use. Customers who utilize this technology have a better understanding of their household water use and can cut down on unintended use, saving them money.
Wastewater Volume Charge
Since wastewater is not metered, many utilities utilize what is known as “Wastewater (or Winter) Averaging” to assess a customer’s wastewater volume charge based on their water usage from meter readings. The goal is to estimate how much wastewater a customer is sending to the utility’s treatment plant for processing, which is captured by wastewater pipes from indoor water use; outdoor water use soaks into the ground or is evaporated. Wastewater volume charges are averaged to remain the same on each bill cycle over a 12-month period. LMUD customers who limit their outdoor water use during the Winter Averaging months (November through February) can greatly decrease their wastewater volume usage on utility bills for the following year.
Taxes and Other Fees
A water utility can be a publicly-owned municipality or other political subdivision, such as LMUD, an investor-owned (for-profit) entity, or a nonprofit. It helps to know which category your water utility falls under to understand their taxation authority, which may appear as a separate line item on your bill or yearly tax statement. Customers should also be aware of additional charge options their utility may assess such as late payment fees or penalty fees for operating outside of current watering restrictions. Each water utility bill also includes a mandatory state regulatory fee of 0.5% of the total, assessed by the Texas Commission on Environmental Quality.
Each utility must operate as a business, managing income and expenses as they relate to operational needs and “product” availability and demand. LMUD recently released the results of a rate study prepared in collaboration with NewGen Strategies & Solutions outlining a five-year initiative that aims to keep the utility ahead of capital improvement costs amidst the uncertainties associated with ongoing drought and economic stability. This type of planning outlook allows a utility to retain competitive service rates while funding upcoming capital projects and replenishing reserves for reinvestment in the reliability of existing infrastructure. Fiscally responsible utilities prioritize their customers’ needs while also holding them accountable for their conservation efforts. Rate increases and added fees are often necessary to ensure a sustainable future for the communities they serve. Understanding your water bill can help you make more informed decisions about your water use and gain an appreciation for the efforts involved to provide you with such essential services.
Written by Stephanie Threinen, public information liaison for Lakeway Municipal Utility District. Earl Foster is the general manager of the LMUD.