San Antonio Water System’s plan to gradually increase water rates this summer failed in June when City Council asked for more time to decide on the rate adjustment.
Now, SAWS has updated its timeline and is asking the city to approve an increase in water rates starting in January. The city-owned utility has also reduced its budget for infrastructure projects by $594 million.
SAWS’ board approved a new $2.6 billion Capital Improvement Program and a rate adjustment to pay for it, on Aug. 4.
The proposed multi-year rate adjustment that would raise the average residential monthly bill between $14.80 and $16.93 by 2029.
San Antonio officials have already said they plan to propose their first tax rate increase in more than three decades — on top of other budget cuts and higher fees. CPS Energy is also vying for an increase in electricity rates.
In a 6-5 vote, council members who sided against the utility cited leaks, lost water and a lack of trust in SAWS leadership, calling out CEO Robert Puente.
SAWS Chief Financial Officer Cecilia Velasquez outlined the utility’s next move during a board meeting Tuesday. Because of the delay, SAWS is pushing back the start of its rate adjustment from 2026 to 2027. It would end in 2030 instead of 2029.
The cost of the rate adjustment remains the same. The average residential monthly bill would increase by $3.91, or 6.9%, beginning in January. In 2028, that number would be $3.94, or 6.5%.
SAWS wants the flexibility to adjust rate increases for years 3 and 4 of its plan depending on how much money the utility needs for its Capital Improvement Program. Velasquez said, those rate increases are more than likely to be on the higher end.
“We believe that we will need to go at that max, or we would need to come and justify even higher,” Velasquez said.
That could raise the average residential monthly bill by more than $16.93 by 2030.
Even at that maximum, though, SAWS officials said they would reduce their planned capital projects.
Chairwoman Jelynne LeBlanc Jamison said several capital projects are now off the table or delayed. Planned projects would also get more expensive, she added, due to inflation and the rising cost of construction.
“We could not maintain the same bill impact or rate schedule,” she said. “It would have been more expensive for us to complete the same number of projects, versus keeping the bill impact and just deciding to reduce the number of projects.”
Those changes led SAWS to drop $594 million worth of projects from its proposed infrastructure improvements. That included $223 million that had been earmarked for water main replacements. Without those replacements, LeBlanc Jamison said, SAWS will not meet its goals for reducing water loss.
During the meeting, Velasquez said the utility would also reduce water projects it worked on with the city such as collaborating on street and water pipe improvements and funding for building out oversized water mains in developing areas.
LeBlanc Jamison said the new rate adjustment and infrastructure plan will be presented to City Council on Sept. 30, with a vote scheduled for Oct. 8.
She said projects that are cut from this Capital Improvement Program this time could go into the next one, as well as a change to the rate structure. SAWS plans to work with a consultant and committee of community members to change how residential, business and irrigation bills are calculated, not just how much they cost.
The utility last changed its rate structure in 2023.
LeBlanc Jamison also answered questions about Puente after multiple council members criticized his communication with the CEO before rejecting the rate increase in June.
“That feedback is very valuable,” LeBlanc Jamison said. “But I will continue to fulfill the role that has been bestowed on me in the appointment as chair. At the appropriate time, I will update the council should there be any changes in leadership.”
