The San Antonio Water System moved one step closer to a rate increase in 2027 after its board approved its budget on Tuesday.
That puts the decision squarely in the hands of San Antonio City Council, which is scheduled to vote on the rate change on Thursday.
SAWS wants to raise the average residential monthly bill by $3.91, or 6.9%, next year and $3.94, or 6.5% in 2028. The rate adjustment plan goes through 2030. By then, the average monthly residential bill is projected to increase by between $16.93 and $13.45.
In a presentation to the SAWS board on Tuesday, Chief Financial Officer Cecilia Velasquez said the rate increase would generate $54 million in additional revenue in 2028 to help the utility pay for a $2.6 billion plan to improve infrastructure.
Velasquez said the plan will focus on wastewater, environmental compliance and bolstering its water supply in the future.
It’s the second time SAWS has put forward a rate increase this year after the utility’s first effort was delayed by City Council in June.
At that time, SAWS had proposed a $3.6 billion plan for major infrastructure improvements, but the utility reduced its ask after city council members pushed back on increasing costs for residents. On Tuesday, Velasquez said reducing its future plans further could make it more difficult to expand its water system.
“We would have to do a whole new risk assessment, and with that system growth, with that continued system expansion, we would have to reevaluate the risk and operational possibilities,” Velasquez said.
SAWS presented its revised rate proposal to city council last week.
The City of San Antonio is one of several local authorities that have already voted to increase property tax rates to meet rising costs.
General class customers, which includes businesses and apartments, would increase by 5.1% in 2027 and by 33% by 2030. That hasn’t changed from what SAWS first proposed over the summer.
The SAWS rate increase will not affect low-income customers. SAWS Uplift Program, which offers reduced rates for those who need them, will expand to include residents who make up to 150% of the federal poverty level — $23,940 for a one-person household or $49,500 for a family of four.
Other programs that help low-income customers improve infrastructure are getting an additional $550,000.
A $1.1 billion budget
SAWS is proposing a balanced $1.1 billion budget next year, a 4.7% increase from 2026.
Those changes are being driven by the money SAWS spends on its operations, $573.4 million, and debt service, $294 million. Its expenditures on debt service are expected to increase by 13% between 2026 and 2027.
Part of the reason the utility is raising rates is to keep its debt from getting too high and to preserve its ability to borrow money at lower interest rates.
Velasquez said SAWS finished 2025 with more money compared to its debt service requirements in 2025, but had been staying close to that goal — 1.75 times more net income than debt — so far this year. More rain over the summer had reduced demand for water and revenues SAWS takes in, she added.
Velasquez said that left the utility with less cash on hand, but said SAWS still ranked highly compared to cities like El Paso, Houston, Austin and Dallas when it comes to saving money.
SAWS has also had lower than projected revenues when it comes to impact fees, which developers or builders pay when they add homes or other new customers to the utility’s system. Those are meant to offset the additional costs of service, and SAWS was projected to receive $139 million in 2025 and 2026.
Instead the utility collected $103 million in 2025 and $109 million in 2026, and is budgeting for $110 million in impact fees in 2027 as large construction projects begin to dry up.
There are areas of revenue growth for the utility, though. Velasquez expects SAWS to grow its customer base by 1.5%. She expects water usage to increase by 2.1% and wastewater usage to increase by 4.6%. Rate increases for chilled water and recycled water could generate roughly $1.4 million in revenue, as well.
