Hit Them Where It Hurts: Enforcing Drought Restrictions With Surcharges and Violation Charges

Introduction The San Antonio Water System (SAWS) is one of the nation's largest municipally owned utilities, providing service to over 500,000 water customers and over 450,000 wastewater customers throughout portions of Bexar, Medina, and Atascosa counties. SAWS' operations and capital requirements are funded primarily from user charge revenues and impact fees; SAWS does not receive tax revenue. Impact fees are designed to cover the capital investment associated with new development so existing customers do not subsidize construction costs of expanding capacity for future customers. User charges must cover the remaining costs, including the higher costs associated with drought conditions. The Problem SAWS has experienced a prolonged and severe drought making it necessary to implement watering rules to reduce outdoor, discretionary water usage. In an effort to avoid more severe watering restrictions, SAWS sought to improve the effectiveness, fairness, and efficiency of the current watering rules. The issues that needed to be addressed included:
The process for enforcing the watering rules depended on citations issued through the municipal court system, which is slow to resolve cases, making the citation consequence less effective.
SAWS received none of the citation revenue despite significant costs associated with patrolling to identify violators, the increased volume of water used by violators, and administration.
The charges for citation-based violations did not escalate within the court system despite it being possible for this to occur. Charges were also the same regardless of total water usage, which made the relatively modest charge meaningless for very large corporate sites and diminished any motivation for repeat violators to stop.
Analysis showed that while up to 90% of customers were following the rules and using modest amounts of water, 5-10% of customers were still using so much discretionary water that more severe measures would likely be necessary without a change. There was a desire within SAWS' leadership and Board of Trustees to have faster, more targeted, and more effective violation consequences for very high landscape water users, to have violation charges processed quickly, and to have SAWS recover the costs of the enforcement process. Solutions SAWS Conservation and Legal staff worked with Carollo Engineers, Inc., to develop a multi-component approach to address the problems listed above. The proposed charges are based on the estimated costs incurred by SAWS to produce higher volumes of water during drought periods when pumping from the lowest-cost source of supply, the Edwards Aquifer, is restricted and SAWS is forced to utilize the higher-cost supplies, including its desalination facility. The proposed solution included:
Implementing a new Drought Stage Three that maintains Drought Stage Two watering days and times but adds a high-use surcharge aimed at high landscape water usage for single-family residential accounts and irrigation accounts associated with commercial sites.
Implementing a watering violation charge to be included on the water bill that is based on the additional costs associated with excessive demand during drought periods. This would also include higher charges for repeat violations and for extremely high landscape usage at commercial sites.
Implementing a SAWS-managed dispute resolution process since courts would no longer be available for this. Include a citizen committee to review highly escalated cases.
Implementing a one-hour 'Defensive Watering' class to waive the first violation charge for single family residential accounts. Results The implemented changes have been tremendously successful.
Usage dropped from 121 gallons per capita per day (gpcd) prior to implementation to 114 gpcd in 2024 despite changes being in place for only six months of that year. SAWS anticipates that 2025 usage will be even lower even while holding at Stage Three rule implementation.
Total violations dropped nearly 50% despite having more active patrol staff.
Repeat violations dropped by 85%.
Over 60% of eligible customers took the Defensive Watering Class and of those, only 2% had a repeat violation. This greatly reduced angst from customers who believed they had made an honest mistake and wanted leniency. However, they understood that a second violation would have a much higher cost.
Customers were able to interact quickly with SAWS staff to clear up any misunderstandings about violations and same-day dismissed cases (e.g., a zero-lot property line where it is clear there was an administrative error).
Less than 5% of cases escalate to the new Dispute Resolution Committee which can uphold or dismiss them after hearing information. While most are upheld, a few are dismissed. The process has been smooth and is completed within 6 weeks as opposed to the 6 to 12-month timeline that a dispute required with the municipal courts. •High use single family residential and commercial irrigation accounts substantially dropped their usage after surcharges were implemented. The percentage of single-family residential accounts that reached the threshold for applying a surcharge dropped from 5% to 2.5%. Commercial irrigation water sales also dropped substantially.
SAWS also saw an acceleration in adoption of WaterSaver landscape at sites that had previously been irrigating large areas of grass. While the surcharge and violation charges were not designed to recover revenue reductions from expected reduced water sales, the revenue from these sources has helped offset the reduced sales. SAWS is currently analyzing the true impact of the drought enforcement charges on total revenue and will be able to provide that information in the presentation.