In a maneuver to free itself from an unusable water contract inherited from its predecessor, the San Antonio Water System is suing the Bexar-Medina-Atascosa Counties Water Control and Improvement District.
The take-or-pay contract, drawn up between the BMA Water District and Bexar Metropolitan Water District in 2007, gives the San Antonio-area water utility access to up to 19,974 acre-feet of water per year from Medina Lake.
Despite the contract, SAWS hasn’t used water from Medina Lake in nearly a decade due to the lake’s poor water quality.
To date, SAWS has paid the water district more than $28 million since 2013 for water “that SAWS does not currently use, has not used for nearly a decade, and has no plan to prospectively use,” according to the lawsuit, which was filed by SAWS Friday. The contract as written is set to run through 2049 and could cost SAWS an additional $78 million over the next 25 years.
Robert Puente, president and CEO of SAWS, told the San Antonio Report Tuesday that the maneuver is “not a lawsuit as we think of the lawsuit.”
“This is a request for … a declaratory judgment — for the judge to look at the contract and declare that that contract is against public policy,” Puente said. “A public entity should not be paying $3.3 million a year for nothing, right? It’s just not fair.”
The lawsuit, which is asking a civil district judge to mediate an end to the agreement, states that SAWS has tried several times to negotiate with the BMA Water District to update the terms of the contract, negotiations that SAWS says BMA was unwilling to take part in.
The decision to sue the water district comes after several years of trying to negotiate a fair deal out of the contract that included offering Edwards Aquifer recharge credits, and offering funds to support BMA employees as the water district transitioned to other sources of revenue, said Donovan Burton, SAWS vice president of water resources and governmental relations.
“We probably discussed with them five or six times about ways to get out of the contract,” Burton said.
Lawyers representing SAWS called the agreement drawn up between the BMA Water District and BexarMet “unfair, unreasonable, and discriminatory” in a letter sent to the BMA Water District’s President George Weimer. The letter notes that SAWS inherited the contract, which had very few protections written into it, from BexarMet when the latter was absorbed by SAWS in 2012.
“BexarMet was under increased public scrutiny during this time period,” the letter states. “In retrospect, the execution by BexarMet of agreements such as this Agreement were a desperate attempt to give the appearance that they had firm water resources that were not actually firm.”
BexarMet was dissolved in 2012 following a host of issues — from employees cheating on basic qualification exams to its head of finance taking paid trips to Las Vegas with a contractor.
While SAWS utilized and treated water from Medina Lake for about a year under the contract, by April 2013 the lake’s quality became too poor to be treated at SAWS’ ultrafiltration plant, in part due to the lake’s low levels. SAWS chose to stop taking water for the time being. In October 2015, water levels at Medina Lake rose enough to where SAWS began taking water again — but because the quality was still too poor, SAWS stopped using the water just one month later.
It has not used any Medina Lake water since.
The utility’s lawyers argue that since SAWS staff did not partake in the negotiations of the contract’s terms in the first place, its current customers should not have to bear the brunt of the agreement, which SAWS calls in the lawsuit one-sided with “inadequate provisions for adjustment.”
SAWS will now enter into a facilitated mediation process with BMA in hopes of avoiding going to court, Burton said.
“We’ll go back in the room with them again, just like we did last year — talking to them about those different options,” he said. “Obviously, we’re under a little bit of a different circumstance now; we’ve got a petition out there and that sort of thing. But we’ll go through that mediation process. Then after that, if that doesn’t succeed, that’s where you get into the legal aspect.”
