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The Amarillo City Council met Tuesday to review a water and wastewater rate study aimed at guiding future funding decisions for major wastewater treatment facility projects. The discussion centered on long-term financial planning as the city prepares for significant upgrades to its aging infrastructure, including the Hollywood and River Road wastewater treatment plants.
The study was conducted by NewGen Strategies and Solutions, whose CEO, Chris Ekrut, presented findings on the city’s current water and wastewater rate structure and its ability to support upcoming capital needs. Amarillo is planning large-scale wastewater treatment facility projects to address aging infrastructure and capacity challenges at its existing plants.
The estimated cost for the projects is approximately $1.5 billion, though Assistant City Manager Donny Hooper emphasized that this figure represents a maximum planning estimate used during the early engineering phase. Hooper noted that city officials are actively working to reduce costs before final design estimates are completed.
Ekrut explained that financing the project will likely require issuing debt. He described this approach as a way to distribute costs across generations of users who will benefit from the infrastructure over time. “At this time, we are anticipating that we will need to use some debt to fund this project. By using debt to fund long-lived assets, we achieve what’s called intergenerational equity,” Ekrut said. “We spread out the cost of that project over the individuals, over the rate payers that are using that project, and so you’re going to see some numbers on that today.”
A major factor in the study was the projected cost of future water supply from the Canadian River Municipal Water Authority (CRMWA). Ekrut noted that CRMWA costs are expected to rise significantly in the coming years, increasing from about $14.25 million annually to $39.52 million by 2036.
The analysis also incorporated a new industrial agreement with Fermi America, which is expected to generate additional revenue for the city. Under the agreement, Fermi will pay twice the standard municipal rate for comparable water usage. NewGen projects that the deal could bring approximately $5.61 million in net income by 2027.
Based on projected revenues and expenses, the study estimates that an average annual water and wastewater rate increase of about 8.4% would be needed to meet funding requirements. Ekrut noted that this figure is still under refinement as the city works through rate design allocations among residential, commercial, and industrial customers.
Despite the projected increase, Amarillo’s current combined water and wastewater bills remain lower than comparable Texas cities. The study showed that the average monthly bill in Lubbock is $96.14, while Mesquite reaches $168.53. In contrast, Amarillo’s average bill is currently $65.36 per month. An 8.4% increase would raise the average bill by roughly $5.50 monthly.
Hooper added that the city expects to hire an engineer for project design by June, which should help refine cost estimates beyond the current $1.5 billion planning figure. More accurate projections are expected in the coming months, which could also impact the proposed rate increase.
Mayor Cole Stanley noted that recent annual rate adjustments of 5% should not be compounded directly with the proposed increase. Instead, he clarified that if the 8.4% recommendation were adopted, it would represent an additional 3.4% beyond the city’s existing trajectory.
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