Utility Rate Study

Utility Rate Study Image (2)

Fair Oaks Ranch Utility Rate Study 

Water, Wastewater, and Reuse


In early 2021, the City engaged a consultant to conduct a rate study for Fair Oaks Ranch Utilities. Rate studies are conducted as a best practice to ensure that a utility's financial health is maintained and that the utility is well prepared to meet its future financial needs. Our study included a financial policy review, development of a financial planning model, a cost-of-service analysis and design of customized rate structure options to meet our City's unique needs.

City of Fair Oaks Ranch Water, Wastewater, & Reuse Utilities (FORU)

The City owns and operates a water and wastewater utility that provides water service to approximately 3,300 customers and wastewater service to roughly 1,900 customers. The utility was originally created by Ralph E. Fair, Inc., when he began developing his family ranch in the mid-1970’s, which we now know as Fair Oaks Ranch. The City purchased these utilities in 1997, so a significant portion of the utility is more than 30-years old.


The City’s water distribution system consists of three independent pressure zones, a network of water lines, storage tanks, pump stations, and water plants. Water within the system is supplied from active groundwater wells owned by the City and through a wholesale supply connection to the Guadalupe-Blanco River Authority’s (GBRA) Wester Canyon transmission main from Canyon Lake.



The City’s wastewater collection system consists of a wastewater treatment plant, lift stations and associated force mains, and a network of gravity mains. The wastewater treatment plant (WWTP) has a current permitted capacity of 500,000 gallons per day.



The City’s reuse system consists of a network of lines, chlorine stations, and storage ponds. The City is contractually obligated to provide 100% of the effluent from the WWTP to the golf course for irrigation purposes.

How was our Community Involved in this process?  

Throughout 2021, the City worked with the rate consultant to share information with, and get feedback from, a volunteer advisory panel of community members. Panel members were selected by the City Council and included a diverse group representing different interests and perspectives within the City. 

The staff, consultant, and panel met five times throughout the 2021 fiscal year. The panel learned about the rate setting process, the City’s financial needs, and the cost of providing water and wastewater services. The panel and the Council held meetings to prioritize the utilization goals of the water and wastewater rates. Both the panel and the Council established the following pricing objectives: 

  1. Revenue stability
  2. Customer impact
  3. Equity between classes
  4. Promote conservation

The consultant presented rate structures that balanced these objectives, and the advisory panel was asked for a consensus-based recommendation to present to Council.

What decisions were made?

The City Council is the governing body of the municipality and, therefore, responsible for making the decision. Since the wastewater utility was not generating enough revenue to cover its full cost of service, the City Council focused on updating wastewater rates and fees. Throughout 2022 and early 2023, several workshops were conducted to review various wastewater rate scenarios, evaluate customer bill impacts and compare proposed rates to other utility providers in our region. In August 2023 the City Council adopted new wastewater rates and fees which benefit customers in the following ways: 

    1. Provides a balance between fixed and variable charges (no other utilities charge a flat fee across all customers), 
    2. Encourages conservation by charging low users less and high users more, 
    3. Ensures wastewater revenue covers the cost of service (no longer subsidized by water revenue) 
    4. Implements recommendations from the Rate Advisory Panel.   

When will rate changes go into effect?  

Rate changes for wastewater customers will go into effect on October 1, 2023. 

For more information please visit, 2023 - 2024 Water/Wastewater Rates  

  • Click the Icon Below
FAQ Clickable Icon Opens in new windowWater Report Icon copy Opens in new window
Flyer Button (2)