SAWS approves 2027 rate plan to fund $567m capital programme

SAWS approves 2027 rate plan to fund $567m capital programmeSan Antonio Water System’s board approved 2027 water, wastewater, recycled water and chilled water rate adjustments alongside a $1.12 billion annual budget. The plan is intended to support Water Forward infrastructure investment while protecting customers enrolled in the utility’s Uplift Assistance Program from rate increases.

The 2027 budget totals $1.1216 billion, including $573.4 million of operations and maintenance expenditure, $293.7 million of debt service and related expenses, and $215.7 million available for renewal and replacement.

SAWS’ 2027 capital improvement programme is budgeted at $566.9 million, of which $450.1 million is for wastewater projects and $349.9 million is for Steven M. Clouse Water Recycling Center improvements.

For an average residential customer using 6,275 gallons of water and 5,052 gallons of wastewater a month, the monthly bill is projected to rise from $56.68 to $60.59 in 2027, excluding pass-through fees.

The utility will seek City Council approval later in the week; the four-year rate plan has a cumulative residential bill impact range of 23.7% to 29.9%, depending on adjustments required in 2029 and 2030.

San Antonio Water System’s board has approved a $1.1216 billion budget for 2027, including water and wastewater rate adjustments that will begin a four-year Water Forward funding plan and support a $566.9 million capital improvement programme. The board’s October 6 decision covers water delivery, water supply, wastewater, recycled water and chilled water rate adjustments, as well as changes to certain special-service fees. Staff said the budget and rate plan would be recommended to City Council later in the week. Operating revenue is budgeted at $970.7 million in 2027, while non-operating revenue is expected to contribute $40.9 million and capital recovery fees another $110 million. The total is $24.8 million, or 2.3%, above budgeted 2026 sources of funds. The capital programme is heavily weighted towards wastewater. Of the $566.9 million planned for 2027, $450.1 million is for wastewater, including $349.9 million for improvements at the Steven M. Clouse Water Recycling Center. Water delivery projects receive $93.2 million, water supply projects $17 million, and chilled-water projects $6.6 million. The programme includes $14.5 million for owner-controlled construction changes. Approximately 27.3% of the 2027 capital programme is to be funded by renewal and replacement funds, capital recovery fees and investment income, with the remaining 72.7% funded through new debt issuance. For a residential customer using SAWS’ average monthly volumes of 6,275 gallons of water and 5,052 gallons of wastewater, the proposed 2027 adjustment takes the monthly bill, excluding pass-through fees, from $56.68 to $60.59. Staff put the four-year cumulative customer bill impact at between 23.7% and 29.9%, depending on rate adjustments ultimately needed in 2029 and 2030. The board heard that the proposed 2027 rate adjustment for general customers, including commercial, apartment and industrial users, averages 5.1%, while irrigation customers face an average increase of 7.6%. The budget also contains the fifth and final adjustments under previously approved recycled-water and chilled-water plans: 10% for recycled water and 8% for chilled-water customers. Staff estimated these adjustments would generate $640,000 and $745,000 respectively in additional annual operating revenue. Chief financial officer Cecilia Velasquez said the utility expected to bill 72.5 billion gallons of water in 2027, 2.1% above the 2026 budget assumption. The revenue forecast also assumes 1.5% growth in water and sewer customer numbers. Affordability measures were a central feature of the presentation. Customers enrolled in SAWS’ Uplift Assistance Program will not receive rate increases during the four-year period. The utility also plans to add $550,000 annually to direct customer assistance, split between Project Agua, Plumbers to People and Laterals to People. Eligibility for Uplift is to expand from households earning up to 125% of the federal poverty level to 150%. Mayor Gina Ortiz Jones said the proposed rate ceilings in the final two years reflected the utility’s capital requirements and the rising cost of borrowing. Velasquez said lowering those ceilings would require SAWS to rework the capital plan and defer further projects. The board also authorised up to $14.45485 million for 2027 owner-controlled construction changes.