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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.
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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.