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SAWS plans no rate increase in 2007

San Antonio Business Journal - March 21, 2006

Because of the San Antonio Water System's strong year-end financial performance, the local water and wastewater utility does not plan on asking City Council for a rate increase next year.

SAWS President and CEO David E. Chardavoyne, formerly of private water company United Water,  said Tuesday that the utility posted net income before capital contributions of $35.6 million in 2005, compared to losses of $4.9 million in 2004 and $10.5 million in 2003.

For SAWS, this means that the utility is operating more efficiently than before. And for residential and business customers, it means that no rate increase will be required for 2007, Chardavoyne says, barring any unforeseen circumstances.

Before Chardavoyne initiated a review of SAWS' 2005 Water Resource Plan Update, the utility had originally projected a 2007 rate increase of 9 percent. City Council has regulatory oversight of SAWS' water and wastewater rates.

SAWS' operating revenues for 2005 totaled $328 million, which is 9.4 percent higher than budget.

The biggest contributors to the larger-than-anticipated increase in revenue were higher water use during the months of abnormally dry weather and the addition of 11,000 water and 15,000 wastewater customers, SAWS Chief Financial Officer Doug Evanson says.

Despite the increase in customers, the utility was able to do a better job at controlling its operating expenses. SAWS' operating expenses were $241.4 million at year-end, which were 3.3 percent, or $8.1 million, lower than originally budgeted.

It also cut consultant expenses by $7.3 million and salaries by $4 million through a restructuring that trimmed 55 positions off SAWS' payroll.