Utility rates projected to increase by 11% for fiscal year 2026

The Denton Public Utilities Board convened on July 14, 2025, to discuss key financial updates and projections related to the city's utility services. The meeting focused on the impact of recent weather patterns on budget forecasts and rate adjustments for the upcoming fiscal years.

The discussion began with inquiries regarding whether utility rates had been adjusted in response to recent weather conditions, particularly the cooler temperatures and increased rainfall. Board members noted that these factors had influenced financial forecasts, particularly for Denton Municipal Electric (DME). It was indicated that updated purchase power forecasts would be available in the coming weeks, potentially affecting the budget presented to the board.

The board acknowledged that the current year's weather could significantly impact financial outcomes, with a noted net income of $656,000 that might fluctuate based on revenue changes. The importance of maintaining fund balance targets was emphasized, as these reserves help mitigate the financial effects of unpredictable weather on utility rates.

Turning to wastewater management, the board reviewed fiscal year 2024 actuals, which showed expenses of $36.7 million, utilizing $633,000 from reserves—less than the previously budgeted $1.6 million. For fiscal year 2025, revenue is estimated at $39.2 million, slightly below the budgeted $40 million, with a projected net income of $197,000.

Looking ahead to fiscal year 2026, the board anticipates a 12% increase in the overall budget and an 11% increase in rates for both residential and commercial customers. Revenue projections for that year are set at $44.5 million, with expenses estimated at $44.1 million. Additionally, it was noted that one vacancy would be held through fiscal year 2026.

In conclusion, the meeting highlighted the ongoing adjustments and considerations the Denton Public Utilities Board must navigate in response to changing weather patterns and financial forecasts, ensuring that utility rates remain sustainable for the community.