San Antonio residents’ monthly water bills will climb by an average of 6.9%, or $3.91, in 2027.
For many customers it will be their first rate increase in seven years.
City Council members approved the San Antonio Water System’s plan to increase rates on Thursday in a 8-3 vote. SAWS officials said the additional funding paves the way for a 5-year, $2.6 billion capital improvement plan to enhance water and wastewater infrastructure.
Council members’ ultimate approval of the water rate increase marked a change four months after they delayed SAWS’ first ask for a rate increase in a 6-5 vote.
Councilwoman Marina Alderete Gavito (D7) was one of three council members to change her vote. She was joined by council members Sukh Kaur (D1), Phyllis Viagran (D3), Edward Mungia (D4), Teri Castillo (D5), Ric Galvan (D6), Ivalis Meza Gonzalez (D7) and Mayor Gina Ortiz Jones in approving the rate increase.
Council members Jalen McKee-Rodriguez (D2), Misty Spears (D9) and Marc Whyte (D10) voted against the increase.
“I do feel that from the last vote with the delay to now, the tone and the collaborative spirit is much different,” Alderete Gavito said. “Because the last time, I think there were still so many unanswered questions. You all have answered our questions. We do trust SAWS’ intent.”
Those questions led to a last-minute change to SAWS’ rate increase proposal. Several council members asked SAWS to lower its ask again. The rate plan would increase costs every year through 2030. In 2029 and 2030, SAWS has given a range of possible rate increases.
As part of the plan, SAWS will have to present its proposed rate increase again to city staff in those years to prove that the utility needs what it’s asking for.
Council members reduced the maximum rate increase from 7% to 6.8% in 2029 and from 6.6% to 6.2% in 2030.
Those changes would amount to less than $1 on the average resident’s monthly bill — $0.15 in 2029 and $0.39 in 2030 — according to SAWS’ early estimates. SAWS officials said losing that revenue could correspond to reducing its infrastructure improvements by $41 million, but that the utility would not know until construction began on those projects in several years.
SAWS will raise the average residential monthly bill by $3.91, or 6.9%, starting in January 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 grow by between $13.45 and $16.54.
SAWS Chief Financial Officer Cecilia Velasquez said that 70% of residents would see rate changes below those averages, which are based on water use. Some residents use much higher amounts of water, largely due to watering lawns or yards. Velasquez said only two city council districts — Districts 8 and 9 — would have rate increases above the average. The other eight districts would have less drastic increases.
In a presentation to the SAWS board on Tuesday, Velasquez said the rate increase would generate $54 million in additional revenue in 2027.
It will help the utility pay for a $2.6 billion plan to improve infrastructure, she said. The plan allocates $1.3 billion for wastewater infrastructure, $940.6 million for water delivery projects and $399.8 million to improve water supply.
It’s part of a series of tax and cost increases that SAWS, the City of San Antonio and other local governments and jurisdictions have been weighing this year and concerns about cost of living abounded on both sides of the vote. It’s the reason McKee-Rodriguez, Spears and Whyte voted against the rate increase.
“I’m now balancing that decision [to increase city property taxes] on top of a bond discussion that we’re having and a pending CPS rate request at some point in the near future, as well as the increased cost of living,” McKee-Rodriguez said.
A second ask
When SAWS first asked for a rate increase in June, it proposed a $3.6 billion plan for major infrastructure improvements, but the utility reduced that after city council members pushed back on increasing costs for residents.
One area that hasn’t changed from the old proposal to the new is rate increases for businesses. General class customers, which includes businesses and apartments, would increase by 5.1% in 2027 and by 33% by 2030.
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 — or income at or below $23,940 for a one-person household or $49,500 for a family of four.
On Thursday, Velasquez told council members that roughly 25,000 customers currently use the Uplift Program. SAWS wants to expand that number by 25% to 30% in the next four years and is rolling out an auto-enrollment pilot program in three council districts that automatically signs up low-income residents for those lower rates.
Other programs that help low-income customers improve infrastructure are getting an additional $550,000.
When SAWS’ first rate increase proposal was delayed in June, council members criticized the utility’s CEO, Robert Puente, and cited a lack of communication as part of why they didn’t approve the increase this summer.
On Thursday, Puente was clear about the need to work with the City of San Antonio, which owns SAWS.
“Council is the entity that determines our rates. Whatever council does is what we have to work with, and I’m very proud of that fact,” Puente said.
He laid out improvements that SAWS wants to make to meet councilmembers’ concerns, including creating programs to improve affordability for renters, reassessing impact fees and how they’re calculated and reducing water loss.
The panel still wants SAWS to improve accountability when it comes to construction and maintenance, councilmembers said during their Thursday meeting. Kaur asked the utility to work with Google and Apple Maps to notify residents where construction projects would block roadways.
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 responsibly.
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.
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 is projected to receive $139 million in 2025 and 2026.
Instead the utility collected $103 million and $109 million, respectively, 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.
This story first appeared in the San Antonio Report.
