On April 25, City Council approved Austin Water’s proposed $45 million debt defeasance transaction, a move that will allow the utility to save on debt service payments.
“With the council’s approval, we’ll be able to reduce the amount of money we are paying on debt service by more than $45 million over the next 8 years,” said David Anders, Austin Water Assistant Director, Financial Services. “The money saved can then be reinvested into our community through stabilized rates and improvements in equipment and processes that further increase efficiency and keep costs down.”
Finding efficiencies and big savings have been major contributing factors in Austin Water’s multi-year plan to make water service more affordable. The utility bucked national trends last year when it lowered rates for retail customers.
“We’ve been able to reduce rates by innovating and modernizing throughout the many areas of the utility,” said Greg Meszaros, Austin Water Director. “The newly approved debt defeasance is an example of one of the many opportunities where the utility has been able to find cost savings while maintaining high levels of service for our customers.”
On average, nationally, water utilities have increased rates by 5% year-over-year. Last year, however, Austin Water retail customers saw a combined 4.8% rate reduction totaling an estimated $26.7million in savings. Additionally, financial forecasts show the reduced water rates are expected to remain the same into 2020.
Improving affordability is a component of the utility’s long-term strategic business plan that uses Effective Utility Management strategies to meet the challenges ahead. The utility has chosen to focus on improving Stakeholder Understanding and Support with an emphasis on Affordability, Customer Satisfaction, Employee and Leadership Development, and Infrastructure Stability. Taken together, improvements in these target areas will help the utility continue to be an industry leader and improve operations and resiliency.
About Austin Water
Austin Water provides safe, reliable, high quality, sustainable and affordable water services that have met the community’s needs for over 100 years. Austin Water services over 1 million people in the Austin metropolitan area across more than 548 square miles.