Robert Puente, president and CEO of San Antonio Water System, speaks to the San Antonio City Council during a special meeting in May to discuss the utility’s rate hike request.
Katina Zentz/San Antonio Express-News
City Council Member Jalen McKee-Rodriguez asks a question to SAWS President and CEO Robert Puente during a May meeting to discuss the utility’s rate increase request.
Katina Zentz/San Antonio Express-News
The San Antonio City Council on Thursday decided to wait until the fall to make a decision on a proposed increase to city water and sewer rates — a move San Antonio Water System officials said will result in them seeking a higher increase.
SAWS leaders have been discussing a plans to seek a rate hike since last summer, and the utility’s board of trustees voted unanimously in May to approve a plan that would raise rates up to 32.8% over four years.
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But because SAWS is owned by the city, the council has the final say on the rates the utility charges its customers. Last week, city staffers recommended a lower range of rate hikes, ultimately raising bills between 26% and 30% by 2029.
Six council members voted Thursday to push back the vote until October: Sukh Kaur, Jalen McKee-Rodriguez, Edward Mungia, Marina Alderete Gavito, Misty Spears and Marc Whyte.
SAWS CEO and President Robert Puente said the delay means SAWS will have to re-assess the proposed hikes and the rates will probably be “adjusted upward.”
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“I doubt if contractors will hold their prices,” he said, as projects will be delayed. “Prices never go down, they always go up, so some of these projects will be more expensive.”
If there is no rate increase approved in 2026, SAWS would need to ask for a 16.1% increase in 2027 to achieve the same revenue it would have under the four-year plan, said Cecilia Velasquez, SAWS chief financial officer.
‘Real targets and real timelines’
The council’s decision to delay a vote on the rate hikes came after Kaur sent a letter to Puente on Wednesday night, listing problems with the utility’s operations and policies and included specific requests for briefings, plans and responses.
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“Before the council can consider approving a rate increase, SAWS must provide substantive responses to the following concerns,” the letter said, according to a copy obtained by the Express-News in response to an open records request. “We are prepared to work constructively with SAWS leadership. These are not unreasonable asks; they are the minimum required to move forward responsibly on a rate increase that will affect every San Antonio ratepayer.”
It’s unclear exactly who that “we” refers to. While the letter said it was from “several San Antonio City Council members,” none were identified by name. During the meeting, Alderete Gavito and Mungia said they contributed to the list, while McKee-Rodriguez said he had seen the document and agreed with much of it.
The letter mentioned issues related to construction projects, pavement damage and coordination with the city. It also asked for changes to the Uplift affordability program, to impact fees paid by developers and to a specific contract for removing biosolids, which is the material removed from sewage in the wastewater treatment process.
“I 100% agree that you all need these funds for these infrastructure improvements,” Kaur said during the meeting. “At the same time, it is our responsibility and what we were elected to do is our due diligence.”
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She said she wants SAWS to return in October with “real targets” and “real timelines” to address council members’ concerns.
The request comes as the City Council is also considering a property tax increase to close budget gaps, and CPS Energy included a potential rate increase in its own budget, though it has not asked the council to approve that yet.
‘These are necessary projects’
The current rate hike proposal, which was the result of a compromise between SAWS and city staff earlier this month, would have raised the average customer bill from $56.68 currently to $60.59 later this year, and ultimately up to $73.60 in 2029. There would be no changes to rates for customers in Uplift, and eligibility for that program would increase from 125% of federal poverty level to 150%.
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The proposed rates were slightly lower than those originally requested by SAWS, after city financial staff conducted a review of the utility’s budget and request.
That review suggested changes in three main categories: eliminating current vacancies in the water metering department, lowering the amount budgeted for a particular water contract, and removing funding budgeted in anticipation of future CPS Energy rate hikes.
There were no proposed changes from the city to the utility’s capital improvement plan, which makes up the bulk of SAWS’ planned spending from the rate increase.
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“These are not discretionary projects, these are necessary projects,” Puente told the council Thursday.
The utility says the higher rates are needed to support $3.2 billion in infrastructure projects over the next five years, including about $502 million of work at the Steven M. Clouse Water Recycling Center, the utility’s largest sewage treatment facility. That plant was built in 1987 and original equipment there needs to be replaced, SAWS has said.
SAWS has also said the rate increase is needed to replace aging water mains, which are costing the utility billions of gallons of water each year from breaks and leaks. In 2025, that amounted to about 16.5 billion gallons, SAWS said — down from a high of more than 21 billion gallons in 2023, but still more water lost than it brings in from the Vista Ridge pipeline, one of the utility’s key water sources.
Under the current capital plan, almost $462 million would go to reducing water loss, SAWS said, and another $290 million would go to expanding water supply, including aquifer storage and desalination expansions, if the increase is improved.
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In recent months, council members have pressed SAWS on why the money and work is needed now, and some have accused the utility of failing to address the problems previously, before they become so urgent.
SAWS has responded by pointing to other major projects that it says it has needed to prioritize in those years, including the U.S. Environmental Protection Agency’s consent decree, which required SAWS to spend $1 billion on repairing and upgrading the sewer system.
Now, the utility says it needs to focus on the aging wastewater treatment and water main infrastructure; without repairs and upgrades, treatment plants are at risk of “critical failures,” officials said in recent SAWS board meetings.
“Anything less than a four-year rate plan places our infrastructure planning and our ability to meet our goals at risk,” Puente said.
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The last time SAWS raised rates was 2020, part of a five-year increase plan approved in 2015 to pay for Vista Ridge, which carries water from Burleson County to San Antonio.
Debate gets contentious
Puente said last week that the city’s involvement in and review of this year’s proposal was “much more involved, much more detailed, much longer than others that I’ve been through.”
He has led the utility since 2008; the council has approved rate hikes seven times since then. The closest votes came in February 2013 and December 2017, both of which ultimately passed 8-3.
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In 2022, the council voted unanimously to approve changes to SAWS’ rate structures, which resulted in lower bills for most residential customers.
That change cut charges for those who use less water, but it also became a flashpoint in the council’s discussions Thursday.
When that change was made, “it was not stated that we were going to need money for capital investments that were do-or-die within a matter of a few years,” McKee-Rodriguez said. He said that indicates that SAWS’ long-term planning was insufficient.
He said SAWS, and Puente in particular, have a problem with accountability, and accused him of often blaming someone else for issues.
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Another sticking point has been a January request from three council members — Whyte, Alderete Gavito and Spears — to have an independent audit conducted before voting on a rate increase.
SAWS has responded that it already does internal reviews and benchmarks, and that a consultant is completing an external review of SAWS’ capital program. However, that review is “not an audit,” Puente said.
But council members have repeatedly referred to it as an audit and said they want to wait to vote on a rate increase until that is complete and presented to the council.
Alderete Gavito, who represents District 7, referenced it again Thursday, saying that it “boggles my mind that we wouldn’t wait to have this rate increase discussion before we have the results of our audit that my colleagues and I have asked for.”
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She said SAWS has “major operational inefficiencies” to resolve. “I’m open to continuing the discussion down the line once these issues have been addressed,” she said.
Whyte also repeated his call for an independent audit, and said there isn’t evidence today that SAWS has spent money wisely so far and will in the future with the revenue from the rate hike.
Puente said after the meeting that while the review is underway, he doesn’t know if he can change Whyte or Alderete Gavito’s minds, regardless of the contents of that study, but that he’ll spend the coming months working to address the council’s concerns and requests.
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