San Antonio Water System customers will see their monthly bills go up again next year as SAWS continues upgrading its water and sewer system to accommodate rapid growth.

At its November meeting Tuesday, SAWS’ board of trustees approved a budget that includes 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 in 2019.

The new rates will raise the average monthly SAWS bill from $65.69 to $68.60, a 4.4 percent increase. The full bill includes pass-through fees from the Edwards Aquifer Authority and Texas Commission on Environmental Quality; the SAWS portion of the bill will go up 4.7 percent.

Sewer repairs and water supply projects, including Vista Ridge, play a significant role in SAWS’ customers’ rising bills. SAWS is well along its path – first laid out in 2015 – to raise its average customers’ bill by approximately 50 percent from 2016 through 2020.

For year-to-year comparisons, SAWS, a municipally owned utility, assumed its average customer uses 7,092 gallons of water per month and disposes of 5,668 gallons of wastewater per month.

All members of the SAWS board of trustees approved the increases, except for St. Mary’s University law associate dean Amy Hardberger, who is traveling in Africa.

For 2019, the board approved a $828.3 million budget, $47.5 million higher than SAWS’ approved 2018 budget of $780.8 million.

Its forecast budget for 2018 is $790.3 million, down from a forecast a month ago of $801.8 million. Forecasts can change for various reasons, including rainy weather and interest rate changes, Chief Financial Officer Doug Evanson said in a Wednesday phone interview.

The higher rates are projected to bring in an additional $26.9 million in revenue, with the remainder of the $47.5 million increase coming from new SAWS customers being added to the system and an anticipated jump in interest income resulting from an increase in short-term interest rates, Evanson said.

The budget includes a $377.3 capital improvement program, through which SAWS invests in water supply projects, pumps and pipes that deliver that water to customers, and sewer infrastructure to deal with wastewater. SAWS funds roughly half this program with cash-on-hand and half with debt, Evanson said.

In 2018, SAWS budgeted $391 million for capital improvements, though Evanson said that number can change throughout the year.

Evanson said the largest driver of the higher rates in 2019 is investment in sewer infrastructure, primarily in support of an agreement with federal authorities meant to reduce the spills and leaks of raw sewage from SAWS’ system. SAWS agreed to the roughly 10-year consent decree in 2013.

Evanson confirmed that meeting the requirements of the agreement will require an investment of approximately $1.4 billion. The utility’s sewer website still uses an outdated figure of less than $1.1 billion.

The second-largest factor in next year’s rate increases are improvements needed to integrate water from the Vista Ridge pipeline into SAWS’ system, Evanson said. Water from the pipeline will begin flowing in 2020.

At the meeting, the SAWS board also passed a resolution in support of EPCOR Services as the operator of the Vista Ridge pipeline for 30 years. The company is a division of Canadian utility company EPCOR Utilities, the sole shareholder of which is the City of Edmonton.

Evanson said SAWS needs rate increases to continue providing cash for and paying debt service on its capital investments, even as SAWS gains more paying customers because of San Antonio’s explosive growth.

“If I didn’t have a capital program, I wouldn’t need a rate increase because my organic customer growth would more than cover my increase in operating costs,” Evanson said. “It’s where we invest in these capital projects, that’s what drives the needs for additional rates.”

At the meeting, SAWS Trustee Eduardo Parra, a civil engineer, asked what he called “60,000-foot-view” questions about where SAWS is going in the future. He wondered whether it be less expensive for San Antonio to grow upward instead of sprawling outward.

“I just think if we expect one more million people … our job is to provide water and collect the sewer at the best rate,” Parra said.  “I think we’re doing it now, it’s just where is it that we’re going, right? How much are we going to have to increase in the future, keep increasing, in order to accommodate all that growth?”

Evanson responded that vertical growth would likely reduce the amount of water needed per person.

“That’d be a challenge from a revenue standpoint, but it would be a good thing in that we won’t need as many additional supplies going forward,” he said. “As far as infrastructure, I’ve got to believe that it’s also cheaper to construct infrastructure vertically than it is to spread out long distances.”

Mayor Ron Nirenberg, a SAWS trustee in his official capacity, also said the City and SAWS will have to work together to create incentives for a different kind of growth.

“We do have a lot of work to do with regard to planning of the city, growing up rather than out,” Nirenberg said.

Brendan Gibbons is a former senior reporter at the San Antonio Report. He is an environmental journalist for Oil & Gas Watch.