Interim Laredo utilities chief details $43 million lead-service request, new grants and stepped-up enforcement

Walt, the interim utilities director, told a Laredo advisory meeting that the department has applied for a series of grants and loans to finance water-system improvements, including a $20 million Army Corps of Engineers cost-share (paired with $6 million local funding) and what he described as a $43,000,000 request for lead- and copper-related work that could fund replacement of customer-side service lines.

The request is part of a broader push that also includes a meter replacement program, an application for testing and planning to address PFOS contamination, and a planned annual main-replacement program. Walt said the city submitted a required inventory under the lead-and-copper reporting rule and has 37,000 service-line entries listed as “unknown,” which the city hopes to refine before deciding replacement priorities.

Why it matters: Lead-service lines and emerging contaminants carry direct public-health implications; replacing only the utility-owned portion of a service line may leave contamination risks in place, so funding that helps homeowners replace the customer-owned portion could materially change the scope and cost of remediation and affect rate and budget decisions for the utility.

“The exciting part of this is this money can also be used to replace the service line on the customer's property,” Walt said. “When you start replacing lead and copper ... if you replace half of it, that's really not solving the issue.” He added that the city chose a compliant methodology for the inventory that treated any construction after 1989 as presumed non-lead and pre-1989 connections as unknown, producing the large unknown cohort the utility plans to investigate.

Grants and approvals: Walt said Congressman Henry Cuellar helped obtain $20,000,000 through the U.S. Army Corps of Engineers; the total project cost will be roughly $26,000,000 including the city’s contribution. He described other requests as a mix of grants, low-interest loans and loan-forgiveness programs that will be reviewed by the Texas Water Development Board. The PFOS application, he said, would fund testing and early planning to “get ahead of the curve.”

Funding uncertainty and deadlines: Walt cautioned that not all requests are awarded yet. “There's no guarantee we're gonna get all this money, but I think there's a high probability,” he said, and noted the city must meet application windows and an April deadline to remain competitive for some state programs.

Collections and operations: Walt also described a renewed emphasis on collections after pandemic-era moratoria: “We've got over 1,800 customers that owe over $300,” he said, and the department is resuming shutoff activity to recover payments while trying to convert collections into payment-recovery plans rather than immediate disconnections. He said there was a backlog of shutoff-related work after several months with no activity.

System upgrades and capital programs: The utility is preparing multiple capital efforts: a meter changeout intended to improve billing accuracy and leak detection, a booster station and elevated storage tank planned for South Laredo, and an annual main-replacement program expected to install 20,000–30,000 feet of replacement pipe per year. Walt said a hydraulic model will guide future projects and that robotic inspection equipment and a valve-operating program are being used to reduce main breaks and lost water.

On main replacement sequencing, Walt said the department ranked lines by break frequency and will begin with the highest-frequency segments regardless of council district. He estimated main-breaks could be cut roughly in half within 5–10 years if the program continues at scale.

Cross-connection control and enforcement: Sheila, identified in the meeting as the staff lead on the cross-connection program, is overseeing notices and compliance for backflow prevention devices. Walt said there are two regulatory categories for backflow devices — high-health-risk (for commercial, hospitals, mortuaries, hotels and other sensitive sites) and non-health-impact (for example, irrigation systems) — and the department will address high-risk installations first.

Walt emphasized the city’s enforcement role is to ensure tests are filed; third-party contractors do the testing and repairs. He told attendees the city had received a citation letter on March 31 from the state regulator (transcribed as “TCQ”), and staff have already begun addressing the items listed in the notice. He warned that properties failing to show required testing could face disconnection: “We can't knowingly allow a situation that could be detrimental,” he said.

Rates and budget context: The utility is conducting a rate study and will present recommended rate changes to City Council; Walt said the study will show what revenues are needed to sustain operations and capital investment, and the council will decide on any rate increases. He described prior work to find operating efficiencies and to use those savings to reduce upward pressure on rates.

System capacity and regional work: Walt said the treatment plant capacity is about 93 million gallons per day (MGD), with an average day demand of about 34 MGD in 2024 and a maximum day of about 44 MGD. He said the utility is pursuing additional water sources and has memoranda of understanding with two entities and one contract through a “legacy” regional effort for water provision.

Public and business impacts: The meeting included questions from advisory members about the financial burden on small businesses and residents required to install and test backflow devices. Walt acknowledged individual costs can be substantial and said staff will try to work with customers when possible, but the regulatory and public-health obligations drive enforcement priorities.

Decisions and next steps: No formal council vote on grant awards or rate changes occurred at this meeting; most items discussed are contingent on external approvals and future council actions. Walt said he expects a new utilities director to arrive in June and that he will assist with a transition and special projects as needed.

Votes at this meeting: advisory members approved the minutes (motion and second recorded; outcome: approved) and later approved a motion to adjourn (motion seconded; outcome: approved). Those procedural actions were the only formal votes recorded in the transcript.

What to watch next: final award decisions from the Army Corps and the Texas Water Development Board, results of the PFOS testing grant (if awarded), refinement of the 37,000 “unknown” service-line inventory, the rate-study recommendations to City Council, and the start of the main-replacement bid and contract awards.