Lago Vista taxpayers pay $360,000 for lake water, could face gap

The savings, the totals for both water plants, the share of the reserve in use, the supply under the old contract, and the 2026-27 budget gap in this story are our calculations from the cited records.

What this is and who decides

An acre-foot is enough water to supply two to three homes for a year.⁹ Lago Vista buys its raw lake water from LCRA, which stores and sells the water of the Colorado River.^10,11 The City Council decides how much to reserve, and LCRA's board approves the contract.^1,12 The bill is paid from the Utility Fund, which collects water and sewer charges from customers.^4,13

What we reported before

Our story on the city's growth plans and the future land use map covered its water and wastewater master plans. The 2025 Water Master Plan expects 20,386 water connections at full buildout, and its water projects cost $37,182,300 in the first five years and $90,287,200 for the buildout phase alone.^14,15 Our budget story reported that the Utility Fund sent $2,059,643 and then $3,643,573 to the General Fund in the last two audited years.^13,16 This story is about the lake water itself.

2023: a new fee and a smaller reserve

The city's old LCRA contract reserved 6,500 acre-feet a year, had no reservation fee, and expired in May 2023.^2,17 Public Works Director Taylor Whichard brought the renewal to the council.^1,17 LCRA's new fee was $77.50 for each reserved acre-foot, so keeping 6,500 would have cost $503,750 a year before the city used a drop. The city used 1,702 acre-feet in 2022.¹⁷

On April 6, 2023, at a regular council meeting in City Council Chambers and by videoconference, the council took up the renewal.^10,18

Council Member Kevin Sullivan said he liked where Mayor Pro Tem Paul Prince was going.^10,18,19 But instead of cutting to 2,800 acre-feet, Sullivan suggested 5,000, which he estimated would save about $115,000 a year and still serve about 30,000 people.^19,20

Another member argued to keep all 6,500, warning that cities such as Cedar Park or Round Rock could buy the water first. "I'd be really scared to give up some acre footage," the member said.²¹

Whichard said that if the council wanted to reduce, he would "feel more comfortable going down to just 5,000, anything below that, then we're pushing our luck." Staff added that asking again for the old amount is "pretty much rubber stamped," but any increase beyond it "has to go in front of a review board which takes a while."²²

Later, Prince questioned spending "$300,000, $400,000 of our citizens' money every year for the next 10 years just in case we want to grow by three times the population." He said most residents would say "give me the cheaper water now," and that "if we run out of water and we can't triple the population, that's a good thing, not a bad thing."²³

Council Member Paul Roberts moved to table it, and Sullivan seconded.^10,18 The vote was unanimous, and the council told City Manager Tracie Hlavinka to bring back answers.^10,24

Whichard answered in a memo for the April 20 meeting. LCRA called resale contracts "fairly complicated," the memo says, and would have to review and approve them. "It is staff's recommendation that we do not pursue this option," Whichard wrote. LCRA also wanted buyers to "logically show LCRA how they grow into the amount of reserved water."³

His table projected that the city would need about 3,257 acre-feet by 2044 at 3% growth a year, or 4,973 at 5%.²⁵ Staff recommended 5,500 acre-feet for 20 years, at $426,250 a year in reservation fees. The report set an April 27 deadline to apply.²⁶

April 20, 2023: the vote

The council met again in regular session on April 20, 2023, in City Council Chambers and by videoconference.²⁷ Whichard told the council his "comfort level" was 5,000 acre-feet.²⁸ He said LCRA had 35,000 acre-feet left in Lake Travis and several large Austin-area customers wanted it. He said LCRA told him that "once they get ours and they get theirs, there's no more available."²⁹

Prince said the city paid LCRA about $220,000 a year, about 4% of its $5.5 million in water revenue. With the new fee and staff's proposed reserve, he said, that share would go from 4% to 10%. Still, he called the gap between 5,500 and 4,500 acre-feet "a pretty small number in the overall budget perspective." He said he had "moved to where I'm comfortable with being a little more conservative and reserving more."³⁰

Sullivan, who had suggested 5,000 two weeks earlier, then laid out his own math.^20,31 He estimated about 34,165 people in 20 years, which he said would take about 4,300 acre-feet. "I think it might be a good thing for us to plan on using 4,500," he said, so that at that point "we just can't build anymore, can't grow anymore." At the 2023 rate, he put the savings at "$155,000 savings each year over the 6,500."³¹

One member asked what would happen in 20 years if the city needed more water and other cities had bought it. "Doesn't that equal moratorium?" the member asked. Another member answered, "I think most of our current residents would say that's not a bad thing."³²

Council Member Gage Hunt asked whether growth in the city's extraterritorial jurisdiction (ETJ), the area just outside the city limits, should be counted.³³ A member then said the bigger worry was "not actually the water it's the roads."³⁴ The same member said that if it meant limiting living unit equivalents (LUEs), the units of water and sewer service promised to new homes, and "being more aggressive on development agreements," that was not a terrible thing.^34,35

Whichard said reselling water was "a cumbersome process" and that LCRA would "review and approve any resale agreement."³⁶ Then a member pushed back, saying "cities are businesses, and if you cease to grow, the city will die."³⁷

Sullivan moved to reserve 4,500 acre-feet for 20 years, and Prince seconded.¹ The motion passed 6 to 1, with Mayor Ed Tidwell voting no.^1,38

All seven members were present, so the six yes votes came from Sullivan, Prince, Hunt, Roberts, and Council Members Rob Durbin and Chelaine Marion.^1,27 The minutes do not record a reason for the mayor's vote.¹

2024: LCRA approves the contract and commits more lake water

On Jan. 24, 2024, LCRA's board approved the new contract for "up to 4,500 acre-feet per year, which is a decrease of 2,000 acre-feet."^2,12 The vote was 12 to 0.¹² Based on recent water use, LCRA expected its reservation fee revenue from the city to rise about $200,000 a year.²

At the same meeting, the board cut its own reserve of lake water from 31,000 to 10,000 acre-feet a year to make room for new contracts.^12,39 It approved 12,642 acre-feet a year for a new industrial buyer, HIF USA, for 40 years.^12,40 It raised Marble Falls from 3,000 to 7,000 acre-feet a year.^12,41 LCRA staff wrote that after five pending contracts, including Lago Vista's, "about 1,995 acre-feet would remain available."³⁹

For the council's June 20, 2024, meeting, Whichard's Public Works Department prepared a water supply presentation.⁴² The slides said the city had "4,500 acre-ft of raw water under contract" and had used 1,715 acre-feet from June 2022 to May 2023, about 38% of that amount. They said the water under contract "would allow the City to double in size" at that rate of use.⁴³

What the city pays

The city paid $0 in reservation fees in the year ended Sept. 30, 2023, and $174,376 the next year. It paid $365,625 in the year ended Sept. 30, 2025. The council approved $360,000 for the year that began Oct. 1, 2026, split between the city's two water plants.^4,5

LCRA's reservation rate is $82.50 an acre-foot now and rises to $87.50 in January 2027. With three months at the old rate and nine at the new one, 4,500 acre-feet will cost about $388,125 this budget year.⁶ That is about $28,125 more than the city set aside.^4,5

Under the new contract, the city also pays a separate use charge for the water it actually draws. That charge is the water rate minus the reservation rate, or $77.50 an acre-foot in 2023, because the reservation fee already covers the rest of the $155 water rate.⁴⁴ The use charge does not depend on the reserve's size. At $82.50, each 1,000 acre-feet given up saves $82,500 a year in reservation fees.^6,44

Is Lago Vista running short of water?

In April 2026, Victor, the city's capital projects manager, told the council the city's water treatment plants were "at 84% with water."^45,46 Asked whether water would reach its limit around 2029 at 5% growth, staff answered, "I believe so."⁴⁷ Staff also said growth in the past couple of years was "only 1 to 2%."⁴⁵

That near-term limit is treatment capacity, not lake water.^45,48 Each of the city's two plants can treat 2.0 million gallons a day, and the master plan says the city "will need additional treatment capacity."⁴⁸

At the same meeting, former Council Member Paul Roberts said he thought the city's LCRA reserve "would supply a population of 35,000."^46,49 In May 2026, he said the last renewal was for 10,000 acre-feet.⁴⁹ The 2023 minutes and LCRA's records say 4,500.^1,2

The lake water matters later. The 2026 regional water plan for the Lower Colorado area, called Region K, counts Lago Vista's supply as 4,500 acre-feet from LCRA plus 415 acre-feet of reused water.⁵⁰ It projects demand of 5,999 acre-feet in 2040, which would leave the city 1,084 acre-feet short.^7,51 With the old 6,500 acre-feet, the same supply would have been 6,915 acre-feet, more than that 2040 demand.^50,51

The city told the planners its recent growth called for a higher forecast, and the plan proposed 4% a year, capped at 49,000 people.⁵² The plan assumes each Lago Vista resident uses 216 gallons a day.⁵³ The city's own conservation plan reported a five-year average of 112.5 gallons a day per person.⁵⁴ The state's summary of the previous plan, published in January 2024, showed no water needs for Lago Vista.^55,56

What it means for taxpayers

Keeping 4,500 instead of 6,500 acre-feet saves taxpayers about $165,000 a year in reservation fees at today's rate.⁶ Compared with staff's 5,500, they pay about $82,500 less.^6,26 Sullivan's 2023 figure of $155,000 used the old rate of $77.50.⁴⁴

The risk comes later. Water above the 4,500 limit costs $330 an acre-foot, double the regular rate.⁶ If the city goes over in two years out of four, it must apply for a new contract.⁵⁷ The regional plan counts on 509 more acre-feet from LCRA's existing water by 2040 at $165 an acre-foot, and later mostly on new LCRA storage at $4,238 an acre-foot.⁸

The Federal Reserve Bank of Dallas wrote in 2025 that, absent policy changes, Texas could face "constraints on future growth and economic development."⁹ The Texas Comptroller wrote that "the cost of doing nothing could be even higher" than the cost of new supply.⁵⁸

What Texas law says

LCRA may store and sell the water of the Colorado River.¹¹ A city that holds a state certificate to provide water must give "continuous and adequate service" in its area. The state's Public Utility Commission lists Lago Vista as a water utility under certificate or registration No. 13286.^59,60 Cities may charge impact fees on new development to pay for water plants and other projects that growth requires.⁶¹

What we could not find

• The signed contract, its number, and the date it took effect.
• Why Mayor Tidwell voted no. The minutes give no reason.
• What the city's "Bulk Water" budget line pays for.
• How much water the city has used each year since 2024.

What you can do

• Ask the city for the signed LCRA contract, LCRA invoices, and any staff analysis of the 4,500 figure. Contracts about public money are public information under state law.⁶² File the request on the city's open records page.⁶³
• If you have records about this contract, share them with us.
• Read the 2026 Region K water plan and comment during the next planning cycle.
• Speak during citizen comments at a council meeting.