In the presentation, SAWS officials discussed a potential rate increase for early 2026, which is driven by necessary capital improvements to maintain the system, which serves 2.1 million people in the San Antonio area.
Long story short
SAWS Chief Financial Officer Doug Evanson said the primary driver for the rate increase is the need to rehabilitate two of the SAWS largest water recycling centers: the Steven M. Clouse Water Recycling Center and the Leon Creek Wastewater Treatment Plant.
“We deferred some of the necessary capital expenditures on our wastewater treatment plants, and now it's time that we catch up on some of those things,” Evanson said.
Evanson said SAWS is planning to use $340 million to rehabilitate the two centers and that a rate increase is vital if these projects are to take place.
“Failure to make those improvements is likely to result in permit violations and could trigger additional environmental oversight,” Evanson said.
Evanson said SAWS is also planning to invest an additional $125 million in its water distribution network and that this investment is also needed to reduce the amount of nonrevenue water, which is water that is never delivered or billed.
However, due to a variety of factors, such as new SAWS board of trustees members and new city council members, SAWS has proposed $350 million in project deferrals, or projects the utility company will postpone, to maintain the current rate until early 2026.
A potential rate increase is due to factors, such as:
- The need to prevent potential permit violations
- Avoiding additional environmental oversight
- Addressing deferred capital expenditures from past decade
- Continuing water stewardship initiatives
- Offsetting impacts of inflation, which has seen a 24% Consumer Price Index increase
- Addressing construction cost increases, which has risen roughly 42% over four years
“Asking the citizens to pay more is never something that we want to do, and so we here at the city need to be more efficient in how we're spending money," Whyte said.
Mayor Gina Ortiz Jones said deferring projects could create a health risk.
“These delayed projects only get more expensive over time, and we only increase the public health and public safety risk to our community as a result of deferring that much needed work,” Jones said.
Zooming in
Evanson said that though SAWS is projecting a slight increase of 1% in operating revenues compared to the previous year, operating and maintenance costs are projected to increase by $9.3 million.
