When the City of Abilene hired Raftelis to conduct a comprehensive cost-of-service and rate study, the goal was simple: determine what it would take to keep the community's water system safe, reliable, and financially sustainable for years to come. 

The study found that the City's water fund reserves-used for several years to cover routine operations-will be depleted by the end of 2025. To correct this imbalance and begin addressing the long-term needs of aging infrastructure, the report recommends a 45 percent rate adjustment in 2026, followed by 9 percent annual increases through 2030. 

While the 45 percent sounds alarming at first, the report makes clear that the typical residential increase is far lower-about 16.6 percent for a household using 4,000 gallons per month, which represents nearly two-thirds of Abilene's customers. For that household, the average monthly bill would move from $36.65 to $42.74. Please keep in mind that these dollar amounts reflect the water portion of the utility bill only. Total monthly bills also include sewer and sanitation charges, which are not part of the water rate study. 

The percentage differences appear large in part because Abilene's current rates are unusually low. When starting from such a low baseline, even modest dollar changes show up as high percentages. In everyday terms, the City has been charging much less than what it actually costs to operate and maintain the system, so catching up requires proportionally higher adjustments on paper, even though the dollar impact for most residents remains modest. 

The proposed rate structure also introduces inclining block rates for residential customers, keeping essential indoor water use at the lowest price while moving heavier outdoor and seasonal use into higher tiers. High-volume users-such as those irrigating large lawns-may see more noticeable increases because their water use places the greatest demand on the system during peak periods. 

Commercial and irrigation customers would also see adjustments, including a uniform commercial rate of $5.98 per thousand gallons and a new irrigation rate of $6.72. Even with these changes, Abilene's water bills remain below the regional average. After the proposed adjustment, the typical 4,000-gallon bill in Abilene is projected at $42.74, compared to a regional average of $43.39. 

The need for updated rates stems from significant capital requirements. The City currently budgets $500,000 annually for water main replacements, though long-term needs exceed $2 million per year. The plan gradually increases funding to $1 million by 2030. The City's two water towers, each nearing 100 years old, will also require replacement in the coming years at an estimated cost of $15 million apiece. Additionally, the study recommends rebuilding a 90-day operating reserve to ensure the utility can respond to emergencies and unexpected repairs. 

While the proposed increases are significant, they are essential to maintaining a safe and reliable water system. Most residents will see increases far below the 45 percent headline, and Abilene's rates will remain competitive within the region. The adjustments aim to secure clean, dependable water today while building a sustainable system for years to come. 

The city commission will continue discussing the cost-of-service and water rate study recommendations at their December 22, 2025, study session. 

Please contact Jon Quinday, Interim City Manager, at 785-263-2550, or 419 N. Broadway, with any questions.