San Antonio Water System customers’ bills are likely going up again next year as the utility prepares to buy water from the Vista Ridge pipeline and continue funding required upgrades to its sewer network.
SAWS’ proposed 2019 budget includes rate hikes that would increase the average residential customer’s bill by 4.4 percent, SAWS Chief Financial Officer Doug Evanson said Tuesday at the utility’s October board meeting.
Technically, SAWS is proposing raising three different per-gallon rates included in customers’ bills. The 2019 budget calls for a 4.3 percent increase in water supply fees, a 0.4 percent increase in water delivery fees, and an 8 percent increase in sewer fees.
Unlike previous years, there will be no City Council vote on next year’s rate increases. That’s because because SAWS successfully secured City Council approval in December for rate increases in 2018 and 2019. The motion passed 8-3, with Councilmen Greg Brockhouse (D6), John Courage (D9), and Clayton Perry (D10) voting no.
Overall, SAWS’ 2019 budget is proposed to add up to $828.3 million, a $26.5 million increase compared with this year. Since 2016, SAWS’ budget has gone up more than 17 percent, from $703.9 million.
SAWS’ board of trustees is expected to vote on the 2019 budget at its November meeting.
The rate increases would take the average customer’s bill from $65.69 to $68.60, Evanson said. For year-by-year comparisons, SAWS assumes an average customer uses 7,092 gallons of water per month.
Last year, SAWS officials said the 2019 rate increase would be 4.7 percent, a number also included in Evanson’s presentation to the SAWS board. On Wednesday, Evanson said in an email that number was based on past assumptions about pass-through fees from other entities and that the 4.4 percent change reflects the current fees.
The presentation also includes a value for an average 2018 SAWS bill as $62.89. That number doesn’t reflect the pass-through fees, which bring the average 2018 bill to $65.69.
Recent increases have put SAWS average customers’ bills higher than those in Dallas but lower than in Fort Worth, Houston, and Austin, Evanson said, citing SAWS’ analysis of Texas cities’ water and sewer rates.
The top three reasons for the rate increase are SAWS’ Vista Ridge pipeline, its continued work on its sewer system, and increased personnel costs, Evanson said.
At the meeting, Evanson discussed SAWS’ two-decade efforts to diversify its water supply beyond the Edwards Aquifer, the vast but drought-sensitive water-bearing rock layer that serves as the San Antonio region’s main water supply.
“We’re getting ready to check that box with the most significant alternative source of supply that has ever come online in San Antonio’s history,” Evanson said. “That water’s scheduled to begin delivery in 2020, but there’s a lot of work to be done between now and then.”
Vista Ridge is a 140-mile pipeline now under construction that will connect San Antonio to aquifers below Burleson and Milam counties. To prepare to make payments for Vista Ridge water estimated at $220,000 per day, SAWS has budgeted for a $13.9 million increase in its water supply operating reserve in 2019, Evanson said.
SAWS has also budgeted $56.6 million in 2019 for work on the Central Water Integration Pipeline, which will help move Vista Ridge water throughout the larger SAWS system.
At the meeting, the SAWS board also approved two construction contracts adding up to $81.8 million for work on facilities related to Vista Ridge.
Next year, SAWS must continue intensive work upgrading its sewer system as part of a 10-year, nearly $1.1 billion consent decree with the federal government.
SAWS entered into the consent decree in 2013 after officials with the U.S. Environmental Protection Agency and the Department of Justice cracked down on the utility because of repeated spills and leaks of raw sewage from its system. Houston is now facing a similar fate.
This year, SAWS submitted two reports to the EPA assessing whether each of its sewer pipes has enough space and is in good enough condition to prevent spills and leaks.
Though the utility has for years been replacing and upgrading sewer pipes and eliminating lift stations that can cause sewage backups, the pace of that work will peak in 2019, according to SAWS’ sewer website.
“We’re really meeting the most capital-intensive portion of the consent decree,” Evanson told the SAWS board.
SAWS is also budgeting for increased personnel costs in 2019, including a proposal to increase the utility’s minimum hourly wage from $14.50 to $15.25, a 5.2 percent change that would affect 180 employees.
Other SAWS employees, such as entry-level customer service representatives, laborers, and utility technicians, are projected to get 3 percent raises next year. SAWS is also planning for an additional $2.2 million in medical and life insurance benefits.
Utility officials also plan to spend more than $5 million on technological improvements, including $2.6 million for a pilot program to replace analog water meters with digital meters.
In 2020, SAWS officials are planning for a more substantial bill increases that would would take average monthly bills to $76.38. That would involve an increase to the water supply fee approved by City Council in 2015. SAWS is not planning on seeking water delivery or sewer fee increases in 2020, Vice President of Communications and External Affairs Gavino Ramos confirmed.