San Antonio water staff propose four-year rate plan to fund aging pipes; council presses on fairness after major leaks

San Antonio water department staff presented an informational review of a multi-year water-rate and capital plan that would phase rate increases over four years to support operations, stabilize staffing and fund a multi-year capital improvement program. Staff said they plan to bring ordinance language to the council the week of June 18, subject to the conversation and any follow-up requests.

The presentation outlined the models financial assumptions (revenues, debt coverage ratios and Moodys-related credit considerations) and projected class-level increases in the near term: the team cited irrigation-class increases around 7.9% for 2026 with smaller annual adjustments in later years, and offered illustrative per-customer dollar impacts used to estimate the average bill change. Staff said their modeling assumes a baseline debt-service coverage of about 1.5 times with an objective nearer 1.75 times to protect long-term financial stability.

"We are recommending a plan of action for rate increases over four years," the agency official said, summarizing the staff recommendation and the timeline for bringing proposed ordinance language to council. Presenters said the package also includes a five-year capital plan focused on potable water and wastewater replacements and called out large, phased projects to address aging infrastructure.

The utility team detailed operational drivers behind the request: rising costs for contracts, chemicals and labor; inflation-driven pressures; and workforce gaps. Staff recommended eliminating 48 long-standing vacant positions and funding 37 positions they said are needed to stabilize operations. They also identified a supplier contract that historically was budgeted at about $8 million and recommended budgeting about $6 million for that contract under current conditions, noting a contract-renegotiation date in July 2027.

Staff described changes to its low-income assistance program (called Uplift in the presentation), proposing to expand eligibility from roughly 125% of the federal poverty line toward 150% and estimating that change could add roughly 1,700 additional customers into the program depending on uptake. The utility said it conducted roughly 600 outreach events last year and planned continued door-to-door and community engagement to increase enrollment.

Councilmembers acknowledged the need to invest in water infrastructure but repeatedly pressed staff about fairness and program details. "It is unfair to tell a resident they must pay more when we see water running in the streets," one councilmember said, describing multiple recent large leaks near Jefferson High School and asking whether the departments failures were operational, contractual or communication problems. Councilmembers requested more detail about which neighborhoods would get prioritized work and asked staff to provide historical program-enrollment data, senior-assistance impacts and a timeline for audits.

Staff responded that the rate-minimum approach is designed to protect the CIP and debt coverage; they said that if revenues exceed assumptions in a future year, rates could be reduced accordingly. The team also emphasized that many pipes are old (some more than 100 years), pointed to supply-chain and labor pressures that increase project costs, and said that certain treatment-plant projects and major line replacements are needed to avoid regulatory fines and public-health risks.

Councilmembers asked for follow-up materials before any final action: enrollment histories for Uplift, financial-detail breakdowns for the CIP by district, clarification on which positions would be added or removed and a plan for the renegotiation of the supplier contract that expires July 2027. Staff said they would return with additional detail and that an ordinance is planned for the week of June 18 but timing could shift based on council requests.

The session ended with thanks to the water department team and a commitment from staff to provide additional documentation and to continue community outreach.

The council did not take a formal vote during this informational session; staff presented recommendations and councilmembers directed follow-up reporting and additional detail to inform any future ordinance.