NTMWD Membership

What is the North Texas Municipal Water District (NTMWD)?
The NTMWD was created in 1954 to provide drinking water and other services to its customers. It was originally created by ten cities, referred to as “member cities”, including Farmersville, Forney, Garland, McKinney, Mesquite, Princeton, Plano, Rockwall, Royse City, and Wylie. Today, the NTMWD services over two million residents and businesses in the north central Texas area. 

Since then, have any other cities become members?
Yes. Richardson joined in 1973, Allen in 1998, and Frisco in 2001.

Is Rowlett a member of the NTMWD?
No. A “customer” agency since 1965, Rowlett is one of 14 cities and 16 utility districts that are non-member wholesalers of the NTMWD. Rowlett is the largest customer wholesaler, in terms of water usage, and would be the 8th largest water user among the member cities of the NTMWD.

Why is the City of Rowlett petitioning for membership with the NTMWD?
Rowlett has long desired to be a member of the NTMWD. As a member, Rowlett would have a voice in decisions that have long impacted Rowlett residents and businesses. This originally stemmed from concerns with the mandatory “Take-or-Pay” policy and remains true today due to concerns about the additional surcharge or “premium” that non-member cities pay.

How much is the customer premium?
The premium paid by non-member customer wholesalers is five cents per 1,000 gallons. Currently, this costs Rowlett customers $160,000 annually. A consultant hired by the NTMWD in 2020, Amawalk Financial Consultants, LLC, recommended that this premium be changed to 10% of the base rate, which at the time was $3.00 per 1,000 gallons. This would increase Rowlett’s annual premium from $160,000 to around $1.0 million and would increase each time the base rate changed. Rowlett has paid $3.3 million for this premium over the past 21 years.

Has the NTMWD already changed the customer premium policy?
No. The NTMWD decided to perform a more comprehensive study that includes, among other things, reviewing the premium as well as a potential buy-in clause for new members. This study is currently underway and is expected to be completed sometime next spring.

Will membership have any impact on the “Take-or-Pay” policy?
No. All NTMWD wholesalers, both member and non-member, are bound by the current Take-or-Pay policy. However, in 2020 the Member cities settled a legal dispute between the parties that would eventually provide a five-year rolling average method as the new policy. While it has an 8-year lead time before the new policy starts, it is considered inherently fairer than the permanent minimum that exists today, which was found to be “adverse to the public interest” by the Public Utilities Commission (PUC).

What are the benefits of membership?
Membership will give Rowlett the opportunity to participate in the policies and practices that affect Rowlett customers. In addition, members do not have to pay the premium non-member cities pay, which as explained in the "How much is the customer premium" question above, could significantly increase in the future.

Why does NTMWD charge a premium to non-member wholesalers?
In the 2020 study performed by the NTMWD’s consultant, Amawalk Financial Consultants, LLC, four factors were listed to potentially justify the premium:

  • Members have the obligation to "make-up" shortfalls in Regional Water System (RWS) revenues or increases in debt service or expenses, as and when needed.
  • Payments are part of Operation and Maintenance (O&M) Expenses for the Members' combined water and sewer systems (becoming a first lien on revenues of such combined systems ahead of their payment of bonds or other similar obligations).
  • Members cannot leave.
  • Members bear the owners’ risk and commit to joint and several liability on repayment of bond indebtedness, including:
    • If there is a shortfall in RWS revenues or increase in debt service or expenses.
    • If there is an extraordinary liability to be paid.

 Does the NTMWD accept new members, and will Rowlett qualify?
Yes. Rowlett would not be the first “new” member. Richardson joined in 1973, Allen in 1998 and Frisco in 2001.

 Rowlett fits the membership profile… 

  • …with a current population of nearly 70,000, which is projected to reach 100,000 by 2035.
  • …with an excellent bond rating enabling a strong position to, like other Member Cities, assume joint and several liability to ensure that debt service on District bonds is paid.

 Water supplies are available…

  • The NTMWD has been supplying Rowlett for decades, therefore granting Rowlett membership will not increase water demand for the District. 
  • The NTMWD recently secured additional water supply with Bois d’Arc Lake.

 Rowlett has a demonstrated track record in regionalization…

  • Partners with Garland for wastewater treatment.
  • Member city of the Dallas Area Rapid Transit system.

 Rowlett practices water conservation…

  • The City is compliant with both the NTMWD’s water conversation plan as well as Texas Commission on Environmental Quality (TCEQ) to manage its water use efficiently and prepare for future population growth.

Why now?
Rowlett’s current contract with the NTMWD expires in May 2024. Rowlett has a sense of urgency to complete the membership process before it may be forced to renew its “customer” contract, particularly with some of the policies and practices customer wholesalers must abide by.

What comes next?
The “petition” for membership was approved by the Rowlett City Council on December 6, 2022 and will be forwarded to the NTMWD for approval. 

 

Show All Answers

1. NTMWD Membership
2. North Texas Municipal Water District (NTMWD)
3. North Texas Municipal Water District (NTMWD) Cost of Service Review
4. Dalrock Road Curves
5. Sapphire Bay
6. Economic Development
7. Senior Tax Freeze and Exemption
8. Multi-Family Developments
9. Utility Bills
10. SB2 and the City Tax Rate
11. Bayside Project History
12. Village of Rowlett Downtown
13. Liquor Stores
14. Streets and Alleys
15. Parks
16. Scenic Point Park
17. Rowlett Community Centre
18. State Highway 66 Median Beautification Project
19. Rowlett Public Library
20. Rental Housing Standards Program
21. Housing Finance Corporation