City staff presented a detailed review of Leon Valley’s water and sewer systems at a town-hall presentation, describing the system’s current assets, reserves and a multi‑year capital program while offering multiple rate options for residents to consider.

“We should continue to build and keep adequate reserves for emergencies and future replacement of our capital,” said Dave D’Alone, identified in the meeting as the assistant public works director, as he opened the utilities portion of the presentation. D’Alone and staff said Leon Valley currently owns roughly 1,900 acre‑feet of water and operates about 39 miles of water mains and 43 miles of sewer mains. He said the city also owns about 304 hydrants and roughly 903 sewer manholes and that the system is maintained by a four‑person field crew supplemented by other staff.

Why this matters: Staff framed the presentation as a decision about how to fund an aging system and a long list of replacements and upgrades. Operating expenses for the utility were presented as “a little over $3,000,000” for fiscal 2023 and staff said the fund reserve was a little over $2,000,000; staff recommended maintaining a 3–6 month operating reserve and increasing restricted reserves for large emergency repairs.

Capital needs and priorities: Staff showed a neighborhood‑level inventory and said Leon Valley has roughly 20 miles of older asbestos‑cement (AC) water pipe and similar mileage of sewer mains that will require replacement over time. Work already completed or contracted includes sewer main replacement funded by Community Development Block Grant (CDBG) awards and a construction contract the council approved to replace additional sewer on Stirrup Lane and nearby streets. Staff said rehabs had been completed on most tanks but identified the Marshall storage tank (built in 1937) as nearing the end of its useful life and singled out valve and hydrant replacements (five to seven hydrants per year) as ongoing capital needs.

Staff presented consolidated cost estimates that combined water mains, water rights and a major tank replacement into a multi‑year total in the tens of millions of dollars. D’Alone said, using current pricing, replacement and purchase needs “in today’s pricing, that total is about 114,900,000,” and later summarized a planning total near $118.8 million when additional items were added. He and the city engineer broke the larger list into priority tiers; staff characterized immediate priorities as several million dollars for targeted water main and sewer main replacements and for continuing purchases of water rights.

Rate options and council direction: Melinda (staff presenter, rates) described three broad approaches the city studied: 1) a single, larger availability/flat base increase that would shift fixed costs to a higher meter availability charge; 2) smaller annual percentage increases (the council asked staff to model a 2% annual increase over five years); and 3) keeping existing tiers and adding a dedicated capital‑improvement fee either as a flat per‑meter charge or as a volumetric (per 1,000 gallons) surcharge. Under an initial model presented by staff, the lowest residential bill would have risen about 250% and an average 5,000‑gallon bill about 60% — a scenario council rejected as too steep.

After council direction, staff modeled a more gradual approach. The preferred option presented for transparency was a usage‑based capital improvement fee shown as a separate line on customer bills (for example, about $1.63 per 1,000 gallons on the water side in the city’s example and $.88 per 1,000 gallons for sewer in that scenario). Staff said a $500,000 per year charge to water and $500,000 per year to sewer (a $1 million total CIP stream) would allow the city to address the priority list outlined earlier.

Staff emphasized implementation details remain pending: the council asked engineers to refine assumptions and staff to return with an ordinance or rate schedule. Melinda said the city would continue annual review of rates and recommended matching any new charge with a clearly earmarked account and annual reporting so the public can see which projects are paid from the CIP fee.

Other technical notes and grants: Staff noted Leon Valley operates a SCADA system for tank/level control, maintains two city wells with emergency generators, and that SAWS (San Antonio Water System) treats the city’s sewage under contract; parts of Leon Valley’s water service are on SAWS and parts are on the city system. The city reported purchasing 105 acre‑feet of water rights in the current year and flagged a planned purchase of about 15 acre‑feet for fiscal 2025–26. Staff also noted CDBG grant awards that funded recent sewer replacements and said more grant applications will be pursued.

Public engagement and next steps: The town hall included live polling and a scheduled follow‑up online survey. Staff said council will review public input, refine the rate proposal and later consider an ordinance or formal rate change during public council meetings.

Ending: City staff urged residents that any adopted rate or fee would be phased and accompanied by continued annual reviews; no final rate ordinance was adopted at the town hall presentation.