San Antonio Water System officials presented the utility's 2025 operating and capital budget to the Municipal Utilities Committee, outlining planned investments in water delivery and supply, higher operating costs for chemicals and staffing, and the potential for rate changes in coming years to support major capital needs.

Doug (SAWS budget presenter) told the committee that the 2025 budget forecasts sources of funding to increase by about $36 million compared with the 2024 forecast, while operating and maintenance (O&M) costs and debt-service expenses rise as well. The utility's 2025 capital improvement program (CIP) is budgeted at about $626 million.

Why it matters: SAWS said sustained investment will be required to replace aging infrastructure, respond to drought-driven main breaks, meet federal and state compliance needs (including lead and copper and PFAS monitoring) and improve resiliency at key pump stations.

Budget and program highlights
- Total 2025 CIP: approximately $626,000,000; about 70% of the plan supports water delivery and supply, roughly 29% supports wastewater, remainder for chilled water.
- Funding mix: about 62% of the CIP is expected to be funded with debt and 38% with cash.
- Key CIP items: $151.3 million for water-main replacements; $41 million for water-tank replacements (three tanks); $38.5 million for backup generators at primary pump stations; $69 million prioritized for sewer-main replacements; $77 million for work at the Klaus wastewater treatment plant; $33 million to design an ASR expansion from 30 to 60 million gallons per day.
- Major initiatives: Connect H2O automated metering (over 550,000 meters) and brackish-water production targeted at 10 million gallons per day.
- O&M and staffing: O&M budget before capitalization is projected around $588 million in 2025; SAWS added 87 positions in the budget (48 to support water-stewardship and leak response, 18 for CIP execution). SAWS also budgeted a living wage increase to $19 per hour and average pay increases of about 4%.
- Chemical cost pressures: SAWS reported recent price increases, including chlorine up about 41%, lime up 79% and ferrous sulfate up 19%; overall chemical-cost budget rose by roughly $3.6 million (about 26%).
- Nonrevenue water and losses: SAWS reported apparent system losses of about 19 billion gallons in 2023; the utility said meter accuracy and leak response improvements are part of addressing that loss.
- Affordability and assistance: The utility highlighted its Uplift program, which reduces bills by about 58% for qualifying customers at the defined usage level, and other assistance tools (late-fee waivers, Project Agua assistance up to $115 twice a year, plumbers-to-the-people and lateral-repair programs).

Council questions and staff responses: Committee members asked about the difference between O&M and renewal-and-replacement (R&R) spending; SAWS said R&R cash funds are intended to support capital projects and that the utility is aiming to fund roughly 50% of capital with cash but is budgeting 38% cash funding for 2025. Council members asked for geographical information about planned generator installations and for estimates of typical water-main replacement costs; SAWS said locations and maps could be provided and cited a wide range of repair costs depending on the scope.

Debt and rates: SAWS officials said they included conservative assumptions in the 2025 debt-service budget (budgeted at about $276 million) and expect actual year-end debt-service will be lower than budget. When asked about future rate adjustments, SAWS leadership said they anticipate potential rate requests in 2026 and 2027 to fund capital projects and respond to sustained infrastructure needs.

PFAS and regulatory monitoring: SAWS staff said their drinking-water PFAS testing results to date do not require additional treatment and that federal and wastewater PFAS rules remain in flux; the utility said it is monitoring EPA developments closely.

Ending: Committee members generally commended SAWS for addressing affordability while pursuing major capital investments and asked staff to provide additional maps, customer-facing materials and cost estimates to support council offices and constituent inquiries.