City Council voted 10-1 in favor of SAWS’ rate increase of 5.1 percent for 2014 and up to 5.3 percent for 2015.
District 10 Councilman Carlton Soules was the only nay vote for the two-year motion. A separate motion to approve the 5.1 percent increase for 2014 on its own, without the 2015 rate, was proposed by Soules and seconded by District 8 Councilman Ron Nirenberg but theirs were the only votes in favor of that motion.
The two year rate increase means a $2.57 increase to the current average monthly bill of $50.33 and a $5.39 combined increase starting in 2015. The 5.1 percent rate increase, SAWS President and CEO Robert Puente said, would give SAWS an additional $20 million in revenue next year.
According to Puente, the two-year increase will provide more stability for the public utility’s long-term projects and allow for the dedicated research and resources of both SAWS and City Council towards the 2014 conversation about a new rate structure. The Rate Advisory Committee made up of citizens and stakeholders is gearing up to discuss possible changes and improvements.
“We want to devote our time into that,” Puente said. The rate restructure will be revenue neutral, so “we’d like to keep that discussion separate (from a rate increase discussion) to avoid confusion.”
Waste water infrastructure, water supply and water delivery are the big-ticket items in need of funding over the coming years, Puente said.
“These are very basic infrastructure needs, basic supply needs,” said Mayor Julian Castro. “And these needs are not going away …growing water demands and the demand of improving an aging sewer system.”
A consent decree signed by SAWS and the U.S. Environmental Protection Agency, a national requirement, requires local officials to spend $492 million more than originally programmed to upgrade the utility’s sewer system over the next 10 years. “It’s a huge, mandatory investment,” Puente said.
“We might as well do it now,” District 1 Councilman Diego Bernal said of funding the sewer system improvements. “We’re legally bound to do it – the legal consequences are fare worse than anything we’re facing now.”
“We have a lot to do,” District 3 Councilwoman Rebecca Viagran said on why she voted in favor of the two-year rate. “District 3 has the second highest (sanitary sewer overflow) – behind District 1. It’s imperative that we work together … I don’t want to delay that.”
The reduction of sewage spills over the last few years demonstrates that “sewer investments are working,” Puente said. “And diversification of our water supply is an on going effort on our part.”
An existing pipeline from the Carrizo Aquifer wells in Gonzalez County will start providing water for 60,000 Bexar County homes by 2014, the desalinization plant to open by 2026 and the subsequent integration pipelines for the plant represent the remaining bulk of what the remaining rate increase funds will be used for, Puente said.
SAWS came before City Council a year ago with a 13.5 percent increase for 2014 but was challenged by council members to find ways to lower it. With the help of an efficiency consultant, SAWS was able to project an $8.3 million payroll and expense reduction. SAWS has eliminated more than 40 full-time positions and has even more slated for elimination, mostly through attrition and some through early retirement.
“Cuts have been at the management and upper management levels mostly,” Puente said. “Vice presidents are taking on different division … (basically) we’re asking our employees to do more.”
“We’ve also improved our (vehicle) fleet functionality,” Puente said. “We canvased the entire division and looked at what the needs were.”
The fleet overhaul resulted in fewer trips made with SAWS vehicles and the addition of smaller, more fuel-efficient cars.
Employee healthcare and benefits costs have also been reduced and continue to evolve to comply with the Affordable Care Act.
Councilman Soules was confident in SAWS’ abilities to follow through, but was concerned that the capped 5.3 percent rate for 2015 would take away an extra incentive for the utility to find even more money-saving strategies.
“I think we’re heading in a good direction,” Soules said and was echoed by Nirenberg. “But a year ago we were looking at a 13.5 percent increase … without the challenge (from City Council) we’d be looking at 13(.5) percent this year … none of this would have happened without oversight.”
Efficiency efforts won’t stop with today’s rate increase approval, Puente said, committing SAWS to continued quarterly review reports and bi-monthly meetings with City Council.
City Council members also stressed the importance of SAWS’ affordability programs. The six programs, including discounts, late payment waivers, and Project Agua, expanded by 15 percent in the last year, Puente said, and will continue to grow.
District 6 Councilman Ray Lopez saw first hand the “tremendous success in certain pockets of the community” of simply walking through neighborhoods and informing residents of the availability of these programs.
“I didn’t know you do that,” and “Where have you been?” were common responses to the outreach, Lopez said.
Several citizens spoke to the council for and against the rate increase and four voiced concern over an apparent lack of attention to residential and commercial water conservation.
“This rate fails to promote significant conservation measures that need to be undertaken immeadiatly” if we’re to withstand current and future droughts, said Meredith McGuire of the local Sierra Club chapter. “Rates ought to be rewarding conservation.”
This will likely weigh heavily in Rate Advisory Committee conversations over the next year, but Puente attempted to address these concerns. While San Antonio is nationally recognized for its water conservation programs, drought is rarely far from our doorstep.
“We recognize and believe that the cheapest source of additional water is water conservation,” Puente said. After focusing on indoor residential water usage, SAWS has begun to focus on outdoor, landscaping programs that have been “gobbled up in a matter of days,” he said.
Iris Dimmick is managing editor of the Rivard Report. Follow her on Twitter @viviris or contact her at iris@rivardreport.com.
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