The more than four-year process to integrate the dissolved Bexar Metropolitan Water District‘s infrastructure and financials into the San Antonio Water System is finally coming to a successful close. In January 2017, former BexarMet customers will be paying the same rates that other SAWS customers do.
“It’s a long, long time coming,” said SAWS President and CEO Robert Puente. He and other lawmakers had been trying for almost a decade to fix the dysfunctional water management organization before it was officially dismantled and merged with SAWS in January 2012.
The SAWS board met on Tuesday to formally recommend that SAWS consolidate its financial accounts with leftover outstanding BexarMet bond debt and discontinue the “District Special Project,” an internal but separate billing and rate system for former BexarMet customers.
These resolutions will go before City Council for a vote on Thursday, Jan. 14, where they are expected to be approved.
While infrastructure and operational integrations have been completed for years, these final accounting and bond debt refunding processes are now underway.
Repairing BexarMet’s neglected infrastructure was far easier than dealing with the management and administration integration, Puente said after receiving unanimous support from the board to proceed to City Council.
“Integration of the employees was probably the hardest part,” he said. “We wanted them to be partners. I think we were very good at that. Some of our leaders now are former BexarMet employees. … They had very good employees, they just had governance issues.”
Yes, “governance issues,” is one way to put it.
Two BexarMet general managers between 2000 and 2010 were fired amid various scandals; the district had repeated problems with water quality, accounting disparities, and their responses to customer concerns and infrastructure maintenance were unfortunate to say the least.
During presentations to the board, SAWS staff displayed photos of rusty pipes that were shoddily repaired with duct-tape, mold growing in BexarMet headquarters, and a “filing system” that looked more like an abandoned shed.
“It was much worse than we were expecting,” said SAWS Communications Manager Anne Hayden.
“The general managers at the time had a philosophy of unsustainable growth,” Puente said. “They would buy up systems, buy up systems, and rely on almost like a pyramid (scheme) where the future growth would pay for the cost of acquiring these past customers and it finally got to be too much.”
Bexar County voters overwhelmingly supported the process in 2011 with a 74% vote in favor of dissolving the BexarMet district that served about 105,000 customers in areas large and small scattered throughout San Antonio (see map).
Until Jan. 1, 2017, former BexarMet residential customers will continue to pay slightly higher rates than regular SAWS customers.
“(BexarMet) commercial class customers were subsidizing their residential customers,” said Doug Evanson, SAWS vice president and CFO of financial services. “Their commercial class customers right now are paying significantly more than SAWS commercial class.”
Since the infrastructure integration, Puente said, there have been almost no complaints from former BexarMet customers.
“We don’t hear from customers with problems that they used to have with BexarMet,” he said. “You don’t get a pat on the back. (When you’re doing it right), you get no communication – which is actually good.”
Full Steam Ahead on Vista Ridge
Abengoa Vista Ridge LLC continues to finance local work on the $3.4 billion Vista Ridge water pipeline, said Gene Dawson, president of Pape-Dawson Engineers during his brief presentation to the SAWS board. Currently, teams are preparing, sending out, and negotiating offer contracts to property owners along the project’s 142-mile length to Burleson County.
Vista Ridge project has been under heightened scrutiny as ratepayers have begun to pay for the it with a portion of the 2016 water rate increase and since news broke in November that Abengoa Vista Ridge’s parent company, Abengoa Sociedad Anónima (SA), filed for protection from its creditors in Madrid.
Abengoa SA is currently going through a restructuring process – with a creditor-mandated March 28 deadline – that could have some small effect on Vista Ridge’s timeline, Dawson said.
“The Abengoa Vista Ridge team has gone to Spain, presented the project, and the creditor team has elected to go ahead and continue to pay to move the project forward at this time,” he said after the meeting.
Abengoa Vista Ridge moved their office from Austin to San Antonio to “show their dedication to the project,” he added. “We want to emphasize Abengoa Vista Ridge is its own company and its financing its internal equity – everything that goes on there is based on the …. contract with SAWS. Insolvency by Abengoa does not impact the Abengoa Vista Ridge project.”
*Top image: SAWS board Chairman Berto Guerra, listens to a speaker during a board meeting. Photo by Scott Ball.
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Moneypot
Iris, thanks for the update. Can you tell me who created Bexar Met, why it was created, and when it was created. It seems to be an example of city and county leadership following a political agenda by creating Bexar Met but I could be wrong. Creation of Bexar Met is an example of previous city and county decisions that citizens need to be reminded of who made those decisions and why. I suspect their will be a “Vista Ridge clean-up” project years down the road and those in power who were responsible for creating the project need to be included in the future articles as a reminder to the citizens and to hold those who approved the project accountable for its creation.
SAWS BOD and the San Antonio City Council should opt out of Vista Ridge as soon as possible. Difficulties are ahead now that Abengoa has retreated to San Antonio as if it were its last stand at the Alamo. There mother ship in Spain is in pre backruptcy proceeding and orderd all of it’s North American offices shut down except here in SA. Why didnt they close down SA offices. Here is why. SAWS via the chamber of commerce will do everything in its power to protect Abengoa so they can get the very expensive and unneccessary Vista Ridge pipeline completed even if they have to use and abuse the SAWS ratepayer with a 50% rate increase over the next 5 years. The Chamber of Commerce completly ignores the fact that SAWS is one of the most progressive water purveyers in the USA and that SAWS staff and Chariman Puente originally rejected Vista Ridge on grounds of environmental,political and financial uncertainity. SAWS staff recommended that Desalination is more reliable , sustainable, half the cost of Vista Ridge and most importantly expandable because of the huge amounts of available non potable underground brackish water just south of San Antonio. Aside from Desalination, SAWS uses cutting edge projects like Aquifer Storage and Recovery(ASR), water rate structures that reward conservation and charges higher rates to high water users and conservation programs that encourage less grass and more native landscaping. SAWS should opt out of Vista Ridge and start buying more water rights in the brackish water zones south of San Antonio so that we can expand our Desalination plant to meet future water demand as we need it instead of being forced to accept 50,000 acre feet a year for 30 years via Vista Ridge. Vista Ridge is completly unsustainable and will cause excessive and uncontrolled sprawl out over the aquifer recharge and contributing zones. San Antonio should stop the sprawling and annexing pattern that it has gotten itself into which is financially unsustainble since we cannot even take care of our exsisting infrastructer we currently have. We must refocus our growth patterns inward and upward which will allow a more livable and sustainable city that people will enjoy living, working and playing in.
I sent the following questions to SAWS on December 6, 2015 and never received a response:
1. How many rate payers will be assessed the $12 (from SAWS fact sheet) monthly fee for the project?
2. What will these funds be used for-to just pay for the project’s infrastructure development/construction costs?
3. How many years does SAWS project it will take to raise the $3.4B for the project?
4. Once the $3.4B of funds are raised, will that rate hike be eliminated for the ratepayers since water flowing through the pipeline will presumably be paid for by non-SAWS ratepayers or SAWS ratepayers who utilize the water? For SAWS to continue to collect the $12 and also charge for water produced by the pipeline would be allowing SAWS to earn additional revenues at the expense of SAWS ratepayers (ratepayers pay the $12 for the water and SAWS turns around and sells it to ratepayers or other entities at an additional charge).
5. Is $3.4B a reasonable amount of investment to support the water needs of an additional 162,000 new households? That seems like a large investment to service only 162,000 new households.
6. The SAWS fact sheet states the project will provide 20% more water for San Antonio. Will 20% more water only support 162,000 new households?
7. What percentage of water from the Vista Ridge project does SAWS anticipate being used to support the water needs of San Antonio and what percentage does SAWS expect to resale to others outside of SAWS service area?
Does no one else think $3.4 BILLION for a 100 mile water pipe is a little excessive?! Our City has thousands of miles of water pipes criss-crossing the land and I can guarantee it didn’t cost $3.4 Billion per 100 miles. Somebody is making a LOT of money on this and it isn’t the taxpayer.
I had similar questions and asked SAWS but received no response. I did receive the following response from Councilman Nirenberg’s office (his chief of staff):
Ken,
I have done my best to answer your questions below. Please let me know if I can be of any assistance.
1)How many rate payers will be assessed the $12 (from SAWS fact sheet) monthly fee for the project?
When SAWS cited a $12 toward the pipeline from the average residential bill, they were showing how much an average ratepayer could expect to pay for the Vista Ridge pipeline. It was meant to illustrate how small a portion of the overall water bill will be dedicated to the pipeline.
2)What will these funds be used for-to just pay for the project’s infrastructure development/construction costs?
We (the ratepayers) will be paying for several things: the water itself, the construction of the pipeline, the delivery of the water, and the integration of the water into the SAWS system.
3) How many years does SAWS project it will take to raise the $3.4B for the project?
The current projections indicate that it will take SAWS 30 years, from 2020-2050, to pay for the pipeline.
4) Once the $3.4B of funds are raised, will that rate hike be eliminated for the ratepayers since water flowing through the pipeline will presumably be paid for by non-SAWS ratepayers or SAWS ratepayers who utilize the water? For SAWS to continue to collect the $12 and also charge for water produced by the pipeline would be allowing SAWS to earn additional revenues at the expense of SAWS ratepayers (ratepayers pay the $12 for the water and SAWS turns around and sells it to ratepayers or other entities at an additional charge).
The pipeline is meant to provide SAWS with the water it needs from 2027-2050. Vista Ridge water will be our most expensive water, and SAWS has been examining selling the Vista Ridge water we don’t need between now and 2027 to keep the inexpensive water out of our rates for as long as possible.
5) Is $3.4B a reasonable amount of investment to support the water needs of an additional 162,000 new households? That seems like a large investment to service only 162,000 new households.
San Antonio is expected to grow by 1 million more people by 2040. The water supply is meant to ensure that each of those residents will have sufficient water in addition to the commercial entities that will be employing those residents.
6)The SAWS fact sheet states the project will provide 20% more water for San Antonio. Will 20% more water only support 162,000 new households?
Vista Ridge is one element of a multi-pronged water security strategy that includes water supply diversification, conservation, and water recycling. SAWS will be bringing on a desalination plant soon in addition to the pipeline.
7) What percentage of water from the Vista Ridge project does SAWS anticipate being used to support the water needs of San Antonio and what percentage does SAWS expect to resale to others outside of SAWS service area?
The ultimate purpose of the pipeline is to provide water security for SAWS ratepayers. SAWS is exploring wholesale opportunities to unload excess water when we don’t need it to keep our bills as low as possible as long as possible.
Thanks,
T.J. Mayes
Chief of Staff
Office of Councilman Nirenberg
(210) 207-2894