Councilman Ron Nirenberg (D8) reiterated his concerns about the Vista Ridge water pipeline project, year-round watering restrictions, and the San Antonio Water System (SAWS)’s executive compensation structure on Wednesday. It was the latest demonstration of increased tension among the councilman, the publicly-owned utility, and the mayor.
After a presentation from SAWS President and CEO Robert Puente meant to update City Council on several ongoing initiatives, including Vista Ridge and a reduced rate increase for 2017, Nirenberg told the Rivard Report that such an update regarding several changes to the contract with Garney Construction was long overdue. The changes, approved by the board on Nov. 1, allowed the firm to reach financial close on the project on Nov. 2. Learn more about the contract amendments here.
“The problem is these changes are fundamental to the nature of our business deal and they’re doing so without the benefit of Council input,” Nirenberg said.
His confidence in the project is “waning very quickly” and he criticized Mayor Ivy Taylor’s handling of the Vista Ridge contract changes.
“If Council is not going to have formal consent then we require our mayor to inform us of these changes and she has not done that,” Nirenberg said.
Taylor has an ex-officio, or automatic, seat on the SAWS board of trustees as mayor.
“That was the reason given to me not to have to worry enough to require an ordinance that required them to come to Council for major changes like this,” he said.
SAWS is not required to ask for City Council’s permission to make adjustments to the contract unless they change the price or quantity of water expected to be delivered by the 142-mile pipeline – up to 16.3 million gallons per year starting in 2020.
“I have regularly scheduled meetings with all City Council members,” Taylor stated in an email to the Rivard Report. “Vista Ridge has been a frequent topic of discussion but Councilman Nirenberg has not asked me for a Vista Ridge update. At his request, we did start live streaming all SAWS Board meetings. Additionally, our (Transportation, Technology and Utilities) Committee handles issues with our utilities and, on City staff, Ben Gorzell works closely with Council to answer any questions they may have.”
City Hall watchers increasingly speculate whether Nirenberg will run for mayor on the May 2017 ballot.
“Councilman Nirenberg, it may be a big change but it was not one of the changes that this Council and my board said that I had to (get approval for),” Puente said during the afternoon meeting.
“I think we’re failing on our duty to be transparent,” Nirenberg said.
“When you say lack of transparency, I take that personally,” said Puente, noting in his defense that the SAWS board has been updated on Vista Ridge project during every public meeting for 24 months and he and his staff are available for informational presentations.
Councilman Joe Krier (D9) and SAWS board Chair Berto Guerra also defended Puente and SAWS’ transparency.
“The only way you could be more transparent is if you transformed yourself into a clear glass window,” Krier quipped.
Later, Guerra noted that the contract was, unprecedentedly, negotiated through open meetings.
“The problem here is not the original negotiation,” Nirenberg said. He finds error in how it’s being handled now.
The changes made to the contract, Puente said, did not change the risk profile of the project. SAWS will only pay for the water that is delivered.
But if no water is delivered, San Antonio’s water security is at risk, Nirenberg argued.
During a review of SAWS and CPS Energy executive pay and bonus structure, Nirenberg also took issue with the metrics used to measure Puente’s.
“In comparison with the CPS (Energy) metrics, which are based on customer satisfaction, employee safety, (etc.),” Nirenberg told the Rivard Report Wednesday evening, “the (SAWS) metrics seem to be triggered by a success of politics at Council as opposed to real benefit to the SAWS rate payer.”
Data compiled from City staff comparing other publicly owned water utilities indicates that Puente is paid on average about $188,500 more than directors and and CEOs of seven other utilities that serve similar population sizes. Puente’s base salary is $412,297. The structure, revenue, and services of these utilities, however, vary. For perspective, staff included data on investor-owned American Water’s President and CEO Susan Story, who was paid $776,931 in 2015 to serve about 15 million customers across the U.S.
Guerra read off a long list of projects and initiatives, from the successful integration of Bexar Met customers to the new desalination plant, that he credited to Puente.
“He makes his own pay,” Guerra said, by saving SAWS money.
“It’s not a reflection of the job that (Puente is) doing,” Nirenberg said. “But we have a job through the mayor to set parameters for how our municipal utility operates.”
SAWS customers face a 6.8% rate increase starting on Jan. 1 2017, less than the Council approved 7.9%. A reduced rate increase was expected, Gorzell said during a separate presentation.
They’ll start to really feel the impact of Vista Ridge in 2020, when the rate increase is expected to jump to 16.7%.
It’s possible that SAWS could “smooth out” the rate increases over the next few years, Gorzell said, and that would require Council action.
It also would require political will, said Councilman Mike Gallagher (D10), noting that it would be a challenge for future politicians to sell increased rates to SAWS customers in the future.
During the Transportation, Technology and Utilities Committee meeting that took place earlier in the day Wednesday, SAWS took direction from the committee to further study the idea of moving to permanent, State One watering restrictions.
SAWS staff will continue to study the effects of once-a-week watering though leadership and the board already came to an initial conclusion last week that implementation would raise rates and have a superficial water conservation effect. This is another sticking point for Nirenberg, who said such a restriction would “test our theory of having built a conservation ethic.”
The 2017 Water Management Plan is underway and a section will be dedicated to exploring the data on once-per-week watering further, Puente said.
The plan is slated for completion in April 2017.