Buda residents could see their water and wastewater bills climb again in fiscal year 2027, as city officials weigh a 6% increase for water rates and a 4% hike for wastewater rates. Under the proposal, a household using 7,500 gallons of water each month would pay $4.46 more, while a home producing 5,000 gallons of wastewater would see its bill rise by $2.74. The increases would mark the second straight year of higher water costs for Buda customers.
As KXAN Austin reported Monday, Buda officials are considering the new rates as part of the city's fiscal year 2027 budget planning process. The recommendation took shape two weeks ago, when financial analyst Grady Reed of HDR Engineering presented the across-the-board increases during a meeting of the Buda City Council, according to Hays Free Press.
Capital Projects Driving the Proposed Increases
The rate hikes are largely tied to Buda's Capital Improvement Plan, per Hays Free Press. The city's annual water expenses are projected to grow from $8.4 million in fiscal year 2027 to $10.4 million by fiscal year 2031, while wastewater expenses are expected to climb from $9.2 million to $11.3 million over the same period. A major driver is a planned Public Works & Parks facility expansion, estimated to cost $2.5 million in fiscal year 2030 and $13 million in fiscal year 2031. Hoodline previously covered new water and wastewater lines installed as part of the city's park upgrades, in its coverage of the Sportsplex Megamakeover.
During that same presentation, financial modeling showed Buda's proposed residential rates would remain lower than those in neighboring Pflugerville, Liberty Hill, Taylor, Hutto, and Kyle, but higher than San Marcos, Georgetown, and Leander, the newspaper reported.
Insurance Costs and a History of Rate Increases
Beyond utility rates, Buda officials are also contending with a 43.6% jump in staff health insurance premiums, which adds more than $659,000 in operational expenses for fiscal year 2027, Hays Free Press reports.
The proposed increases follow a familiar pattern. For fiscal year 2026, adopted in September 2025, the City Council approved a 9% water rate increase with no wastewater change, adding about $6.23 a month to the average customer's bill, according to Community Impact. That same outlet reported that state projections from the Texas Water Development Board show Buda's water demand will exceed existing local supplies by 2040 without new infrastructure, as the city's service population grows toward an estimated 34,000 residents by 2050.
Water Supply Risks and the Road Ahead
Buda relies on a diversified water supply, drawing groundwater from the Edwards Aquifer under historic rights of up to 275 million gallons annually, along with surface water purchased from the Guadalupe-Blanco River Authority, up to 1.5 million gallons per day from Canyon Lake, according to the City of Buda. Both sources are subject to mandatory cutbacks during Stage 3 regional drought conditions. To bolster reliability, Buda joined the Alliance Regional Water Authority, which brought a $340 million Carrizo Water Treatment Plant and pipeline network online in late 2024 to deliver treated groundwater from Caldwell County to Buda, Kyle, and San Marcos, the city says.
Residents will have several chances to weigh in before the rates take effect. Buda plans to post its full proposed budget on Friday, followed by a formal presentation to the City Council next Thursday. A public hearing on the budget is scheduled for Sept. 1, with a tax rate hearing to follow on Sept. 15, according to Hays Free Press.
