More than a decade after voters approved a project that included the replacement of a 100-year-old water main and sewer main downtown near Hemisfair, city officials are saying a hard deadline for hosting the 2025 Final Four means the long-standing, oft-delayed project must be partially completed by the spring.
That will mean abandoning the full replacement of the century-old pipes under South Alamo Street and instead patching the sewer main while leaving the water main untouched.
However, a city-drafted memorandum of understanding between the city and the water utility wants SAWS to take on half the liability — and associated costs — if that water main breaks in the next decade, SAWS officials told their board of trustees Tuesday.
It remains unclear who is responsible for paying additional costs accumulated since the originally conceived 2012 bond project began construction in 2021, SAWS staff said Tuesday.
“I think the question was, ‘With all these delay impacts will there be a cost impact that needs to come before the board?’ And we don’t know yet, that’s the short of it,” said SAWS chief operating officer Andrea Beymer.
The initial estimate for the project, which was set to consist of street reconstruction, drainage reconstruction, and the upgrading of SAWS and CPS Energy assets, was going to be approximately $36.6 million, with $14.6 million of that relating to SAWS. The new total cost of the project is not clear at this time, city and SAWS officials said.
If the utility agrees to the city’s proposal, SAWS trustees warned that ratepayers may have to carry the costs for a potential main break down the line.
They also expressed dissatisfaction with a lack of clear boundaries within the joint project with there being uncertainty at the moment for which entity is responsible for paying for what.
“I would love a presentation on what the cost impacts to our ratepayers are,” Trustee Amy Hardberger told utility staff and a city representative. “As good partners with the city, I think we need to see some reciprocity on that — we’re giving quite a bit of our ratepayer money to the city budget.”
Starts and stops
The South Alamo Street project has been more than a decade in the making, first launched in 2012 as a bond project that was put on hold due to funding issues, said Quintin Pollok, director of construction at SAWS.
Eventually, funds became available as part of the 2017 bond program.
Then the project was delayed again and again, Pollok noted — sometimes for clear reasons like a lack of funding, other times for unclear reasons.
“During that time, between 2014 and 2020, there were several starts and stops to this project,” Pollok said. In fact, city staff didn’t involve SAWS staff in the design process until April 2021, he said
In July 2021, the city asked SAWS to help them complete the design phase in just 90 days, an accelerated timeline driven by the 2025 Final Four, Pollok said. However, designs weren’t completed until December 2021.
In November 2022, the project was awarded to Sundt Construction Inc. with an original completion date set for December 2024.
The original scope of the project included fully updating and extending the area’s water, sewer and chilled water service infrastructure — a menu of improvements that slowly whittled down as the deadline got closer.
Sections of the chilled water line were the first to go. Then the replacement of the water main was next. The city didn’t want to risk a sewage spill, however, and agreed the old sewer main should at least be reinforced if it couldn’t be replaced.
As of Tuesday, SAWS has completed 85% of the chilled water line installation work and has hired a separate contractor, SAK Construction, to do the sewer main reinforcements. The utility expects its portion of the work to be complete by this October, Pollok said.
City, SAWS negotiations
In order to document all these changes, the city drafted a memo to keep track of which parts of the project the city and SAWS were responsible for, Pollok said. The city first gave SAWS its version of the agreement in January of this year, and in February it was returned with heavy changes.
“We agreed that since SAWS was not going to replace the water line, if there’s any break [that] happens in the next 10 years from today, we will repay half the roadway replacement costs,” said Razi Hosseini, the city’s director of the Public Works Department. “We sent the [memorandum of understanding] to SAWS — we got significantly changed from what we had sent to them.”
A revised version of the MOU — re-proposing the city’s idea of splitting main break repair costs — was returned to SAWS on Monday, just 24 hours before the board meeting, according to SAWS staff.
Trustees balked.
“So you guys are placing your full faith in a 1900 water line?” SAWS Board Chairwoman Jelynne LeBlanc Jamison asked Hosseini.
In response, the public works director told the trustees that in previous discussions SAWS staff had said they were “reluctantly comfortable” with allowing the main to remain in use.
In a phone call with the San Antonio Report on Friday, SAWS President and CEO Robert Puente disputed this claim.
“Those are his words,” Puente said. “It’s not something that he got from us.”
SAWS’ preference would have been to keep the original scope of work and to have these mains replaced as part of this project, Beymer added Friday.
“But we understood … the schedule pressure that the city was under, and we are working to be good partners with the city,” she added.
Another issue that’s arisen is that Sundt Construction has said it plans to request more money from the city than originally estimated due to increased costs associated with delays and material price increases, Pollok said.
From SAWS’ standpoint, the utility has yet to see what all of the various cost overrides might look like.
“Our position is we need to see them — and are we responsible for those costs? That’s going to be the key question, who is responsible?” Beymer said. “We understand those costs are coming. SAWS needs to pay what we’re responsible for, but that’s the key — is SAWS responsible for the delays? We don’t have that answer for you today.”
The South Alamo Street project highlights the need for a better resolution process when SAWS and the city disagree on costs in a joint project, trustees LeBlanc Jamison and Hardberger both said Tuesday.
LeBlanc Jamison said she’d like to see the city implement a neutral third party to help sort out the agreement.
“It’s certainly not the last complicated partnership project that we’re going to have with the city,” Hardberger said.
