Meeting Intelligence Preview
Meeting Summary
The San Antonio Water System (SAWS) presented a comprehensive rate study and capital improvement plan to City Council, requesting rate increases of approximately 30% for water and 35% for wastewater over five years (2026-2030) to address $3.2 billion in capital needs. The presentation detailed aging infrastructure concerns including 1,765 miles of water mains over 50 years old, wastewater treatment plant upgrades at facilities built between 1965-1987, and state-mandated generator installations totaling $340 million following Winter Storm Uri. No votes were taken; Council provided feedback expressing concerns about water loss (20 billion gallons in 2024), impacts on vulnerable residents, and requested more detailed project maps and prioritization information.
Key Decisions (1)
SAWS Rate Study and Capital Plan Presentation
SAWS presented draft findings from Corolla Engineers cost of service study recommending approximately 30% cumulative water rate increases and 35% wastewater rate increases over 2026-2030 to fund $3.2 billion in capital improvements. The 2026 proposed residential water increase is 7.9%. No vote taken - informational session seeking Council feedback before formal budget amendment.
Market Signals (6)
Infrastructure
SAWS maintains the third-largest water and sewer system in the US (over 14,000 miles of combined pipe) behind only New York and Los Angeles, with 22% of water mains (1,765 miles) over 50 years old requiring replacement.
Infrastructure
Wastewater treatment plants require significant investment - the newest plant was built in 1987, with technology, environmental regulations, and population growth necessitating major upgrades at Leon Creek (1965), Stephen M. Claus (1987), and Medina Creek (1972) facilities.
Housing Demand
SAWS projects customer growth slowing from historical 1.9% annually to approximately 1.6% per year, with continued decline in water use per bill of 0.6% resulting in net water sales growth of about 1% annually.
Commercial Demand
Data center water demand is a growing concern with 35,000 acre-feet available and 20,000 currently committed; large data centers primarily use recycled water, and SAWS is reviewing whether separate rate structures should apply to data centers.
Infrastructure
Construction costs have risen 43% since 2020 per Mortensen's National Construction Cost Index, while overall inflation increased 25% per CPI, significantly impacting SAWS capital project costs.
Sentiment
Council members expressed significant concern about water loss (approximately 20 billion gallons in 2024) and aging infrastructure, with multiple requests for geographic mapping of oldest pipes and project prioritization before supporting rate increases.