The San Antonio Water System (SAWS) Board of Trustees met Tuesday to review the utility’s proposed 2016 budget and to receive an update on the Vista Ridge water supply project. But questions about unusually high water bills and a controversial water study are very much on the minds of some officials and ratepayers.
Rate Adjustments, Vista Ridge Remains On Track
Customers are looking at a projected average monthly rate hike of 7.5% in 2016, and 7.9% in 2017 to help support the development of Vista Ridge. The rate adjustments also assumes integration of rates and infrastructure in 2017 from the former Bexar Metropolitan Water District, which SAWS acquired in 2012.
Looking further down the road, water system officials estimate that the average monthly residential bill will be 14.4% higher by 2020 with Vista Ridge in effect.
A $3.4 billion project approved by the City Council one year ago, Vista Ridge is a 30-year pipeline and water purchase deal that is designed to deliver 50,000 acre-feet of water per year to the city’s supply from Burleson County/Carrizo Aquifer starting in 2020. Supporters say Vista Ridge will help to meet the needs of a growing city, whose population SAWS projects will rise from the current 1.7 million to 2.6 million by 2040. The project would reduce some of the city’s reliance on the Edwards Aquifer.
Project critics, including the Sierra Club and various community groups, have accused SAWS and the City of rushing into a deal they say only helps developers and will hurt low-income residents. Critics also say the water system is not doing enough to promote conservation.
Doug Evanson, SAWS’s senior vice president and chief financial officer, told the Board that the utility remains committed to conservation and ensuring affordable rates now and in the future. Evanson noted an increase in public participation in SAWS’s various conservation programs, with involvement totaling 154,000 people last year.
Evanson added that SAWS customers have helped to lead to a 40% total citywide reduction of water use in the last 30 years. The utility expects a total savings of 16,500 acre-feet of water by 2020.
“We’re never going to lose sight of conservation at SAWS,” Evanson told board members. “(SAWS President/CEO) Robert (Puente) has often said conservation itself is a water source.”
Evanson said SAWS’s business model is intriguing, compared with similarly sized water utilities, in that his organization actively encourages less water use, especially among residents. Promoting conservation, particularly among high-end users, is also the key for a proposed new tiered rate structure that SAWS has in the works.
If City Council gives approval on Oct. 29, the city-owned utility would move pricing from the current four-tier system to eight tiers for residential customers. This change, utility officials say, would widen the price distinction between low- and high-use commercial customers, and allow for most water-conscious users to see their monthly bills decline.
Doug Evanson acknowledged that the restructured rates may challenge some low-income residents, who for example may live in older homes with suspect plumbing, or simply may not be able to reach the desired conservation use benchmarks. Evanson urged struggling customers to take advantage of the affordability programs that SAWS offers.
“Obviously, there will be segments of our community that will struggle with our rate adjustments,” he said. Evanson also said, though, conservation alone is not enough to help cover San Antonio’s projected population growth. Combining Vista Ridge and a brackish water desalination project, SAWS plans to add a total of 63,440 acre-feet to its water supply portfolio by 2020. The desalination project is the largest of its kind in the nation. The city is scheduled to start receiving water, up to 13,400 acre-feet, from the project in June 2016.
Officials from Abengoa, the Spain-based engineering and construction company that’s leading the Vista Ridge consortium, said the pipeline project remains on schedule. Gene Dawson, president of Pape-Dawson Engineers, a consortium member, said the partnership has received only 4% negative response from owners of property through which the consortium has sought to purchase rights-of-way for their pipeline.
The Vista Ridge project has entered a commercial closing phase of activity, but City Council is required to approve SAWS’s new rates before the consortium’s financial closing phase. Then actual construction could begin in mid-2016.
Together with debt refinancing and other strategies aimed at efficiency, such as a reduction of 337 full-time positions, Doug Evanson said SAWS is overall financially strong heading into the future. Board Chairman Heriberto Guerra praised the work done by Evanson and Robert Puente.
“When you reign in costs, it saves our ratepayers money,” Guerra said.
SAWS Questioned On Reading of Water Meters
While the SAWS Board has yet to act on its new budget and the Council is slated to consider restructured rates, questions remain about how the utility appears to have overly estimated water meter readings late this summer. Mayor Ivy Taylor during the board meeting asked whether having a less than 1,700-employee workforce is an adequate number of people as the city grows. Mayor Taylor voiced some concern with the workforce size in light of abnormally high water bills, which has many customers angry with the utility.
“I just want to make sure we’re striking the right balance on staffing with questions about the reading of meters,” Mayor Taylor said.
Doug Evanson explained that estimations and an unusually wet spring followed by a dry summer, among other factors, contributed to the recent high bills. The utility has launched short- and long-term efforts to try and resolve the issue.
“I applaud how you and Robert have handled the meter reading chapter, how you’ve stepped up to the plate and said you made a mistake,” Chairman Guerra told Evanson and Puente.
“Thank you. Our staff has been affected,” Puente responded. “They need to hear those compliments as too often they’ve heard only one side,” he added in regards to the many complaints voiced by customers.
Water Policy Review Under Scrutiny
Another question is about water policy. Louis Rowe asked about a controversial report on long-term water management and conservation in the San Antonio area. The report, authored by former SAWS Conservation Director Calvin Finch, has not been released.
Finch, now with the Texas A&M University Water Conservation and Technology Center, was commissioned for $100,000 to lead the study. The City of Fair Oaks Ranch funded it in exchange for releasing a 130-acre subdivision from the City of San Antonio’s jurisdiction.
But the draft has been circulated at City Hall and elsewhere, sparking criticism from some SAWS and City officials who claim it has biased opinions and inaccurate descriptions about the Vista Ridge project, among other complaints. Gene Dawson told Board members he appreciates the work Finch put into the report, but added “there are probably corrections that need to be made and there are some inaccuracies.”
Dawson acknowledged some concerns about Vista Ridge, that it will “take a lot of effort” to build and to make it successful while minimizing any negative impacts. But, he added, the project should proceed.
“The risks for us, yes, are that we have no water security if we don’t go forward,” Rowe said about Vista Ridge.
When it came time for the citizens to be heard part of the meeting, a few audience members took issue with Vista Ridge and the proposed restructured rates.
Karen Wheeler said she and fellow customers are looking at the potential for a combined 44% rate increase over the next five years.
“That’s a lot to put on ratepayers. Do we really have to do this?” she asked rhetorically. Wheeler also cited a new report by groundwater hydrologist George Rice, who estimates that Vista Ridge would decrease water levels and hydraulic water pressure hundreds of feet in the Simsboro and Carrizo aquifers. Instead of building a new massive water supply, Wheeler said, there should be more emphasis on low-impact development in San Antonio.
Alan Montemayor, who sits with two Alamo Sierra Club committees, said the new rates do little to encourage water conservation among commercial users. He also called Vista Ridge “a scheme to deprive neighbors of water in the name of economic growth.”
And two other meeting attendees, Roger Fisher and Matthew Pribble, took SAWS to task for the water billing troubles. While Pribble asked the utility to be more forthcoming about the water bills and how to prevent such issues from recurring, Fisher claimed ratepayers and City leaders now have lost confidence in top management at SAWS.
*Top image: San Antonio Water System’s projects a monthly rate by 2020, when the Vista Ridge pipeline project is scheduled to start delivery of water to the San Antonio area. Image courtesy of SAWS.