Utility Rate Study

Utility Rate Study Image (2)

Fair Oaks Ranch Utilities Rate Study 

Water, Wastewater and Reuse

Water, Wastewater and Reuse Rate Study Underway

The Fair Oaks City Council voted in early 2021 to hire a consultant to conduct a rate study for its water, wastewater, and reuse rates. This is the first time the city has conducted an external rate study. The City is advancing this rate study as a best practice to ensure that the utility is sufficiently funded and can continue to meet its current and future financial 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 3,500 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.

Who Makes the Final Decision

The City Council is the governing body of the municipality and, therefore, responsible for making the decision. The panel was established as an advisory panel charged with vetting all the issues and developing a recommendation to assist the City Council with making an informed decision.  The panel’s recommendation serves as the baseline to start the community discussion.  

What is the project timeline for the rate study?  

It is expected the new rates will be determined in mid-2022 with an effective date of October 2022 reported consumption/usage data.  

 Utility Rate Study Timeline (4)

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