Austin Water has made significant strides in managing its debt, reporting over $625 million in savings since 2016 through strategic defeasance transactions. During the Water and Wastewater Commission Budget Committee Meeting on June 2, 2025, officials detailed their approach to utilizing impact fees and capital recovery fees to pay down debt, allowing for targeted financial management across specific fiscal years.

The committee highlighted the effectiveness of defeasing debt, which involves making extra payments on bonds to reduce future obligations. This method not only alleviates immediate financial pressure but also removes the debt from Austin Water's balance sheet, enhancing the organization’s financial metrics. The discussion emphasized the importance of timing in these transactions, as bonds can be called at various points throughout their 30-year lifespan, allowing for flexibility in repayment strategies.

Looking ahead, Austin Water plans to leverage federal funding through the Environmental Protection Agency's WIFIA program to support upcoming projects, such as the Walnut Creek initiative. This funding strategy, combined with the ongoing use of low-interest loans from the Texas Water Development Board, positions the department to continue its trend of financial prudence.

The committee's discussions underscored a commitment to fiscal responsibility, with a clear focus on reducing debt service costs, which previously accounted for as much as 42% of the total budget. By effectively managing these financial obligations, Austin Water aims to ensure sustainable operations and improved service delivery for the community.