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Chairman’s Message
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James M. Mayor
Chairman
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The year 2004 presented San Antonio Water System with an array of formidable
issues and challenges…infrastructure concerns, a growing population, changes in
leadership, and developing new water resources, to name a few. But through all that –
through all of the day-to-day challenges at one of the country’s largest water utilities –
one thing never changed.
And it never will.
And that’s our commitment to our customers. And it’s also our commitment to the
community; our employees; our environment; the infrastructure and water resources; and
to economic development.
This Annual Report will highlight these commitments as well as an array of SAWS’
significant achievements in 2004.
2004 Financial Performance
SAWS experienced a year of continued growth in 2004. With San Antonio’s steady growth
in population our customer base increased by 2.9%. This increase – coupled with rate
increases implemented during 2004 – boosted the System’s operating revenues by 9.0%
to nearly $263 million in 2004, despite higher than normal levels of rainfall experienced
during the year.
As a result of the increased revenue levels, operating income in 2004 was $48.2 million,
up 53.7% from $31.3 million in 2003. After consideration of non-operating revenues and
expenses, capital contributions and special items, the change in net assets was $64.6 million
for the year, an increase of 11.3% over the prior year.
While the 2004 rate increases were necessary in order for the System to carry out its
public service responsibilities, management and the Board remain committed to providing
the best possible water and wastewater service at the lowest reasonable cost. Even after the
rate increases, the combined residential water and wastewater service charge for an average
SAWS residential customer is among the lowest of the ten largest Texas cities.
The Board also remains committed to maintaining a financially sound utility that can
access capital at reasonable rates. The System’s revenue bonds maintain an “AA-” rating
from Standard & Poor’s and Fitch, and an “Aa3” rating from Moody’s – which is clearly
a testament to this commitment. These ratings are among the best in the utility sector,
and allow SAWS to borrow at very low rates. The overall weighted average cost of our
$1,162.4 million of long-term debt was 4.8% at December 31, 2004.
Industry Leaders in Conservation
Over the years, SAWS has earned the reputation as a national leader in water conservation
efforts. In connection with the long-term water supply plan in the late 1990’s, our
conservation department established a goal to reduce the gallons per capita per day (GPCD)
to a level of 132 by 2025.
 Through the combined efforts of the SAWS staff and the citizens of the San Antonio
community, this goal was reached and surpassed in 2004. The attainment of this goal
results in a positive economic benefit for our customers. By reducing our water
consumption levels we have delayed, and in some cases even deferred indefinitely, the
need for costly new water supply projects. This enables us to minimize the amount of
potential future rate increases. We are committed to building on this success and reducing
the average daily consumption even further without impacting our quality of life or
interfering with the region’s growth ambitions.
Economic Development Assistance
The availability of long-term water supplies is typically at the top of the list of concerns of
business leaders researching a potential expansion into a city or region. This is especially
true in southwestern cities like San Antonio.
With funds generated by the Water Supply Fee in 2000, SAWS constructed the state-of-the-art
Twin Oaks Aquifer Storage and Recovery Plant, which opened in 2004. Projects like this
will help diminish concerns about the long-term availability of water supplies.
This was never more evident than with Toyota’s decision to locate a large manufacturing
facility in San Antonio. Toyota’s business impact to the city, the region, and our state
(detailed later in this report) is quite substantial and it sends a strong message to other
businesses looking for new homes or for expansion.
Serving Our Customers
San Antonio is the eighth largest city in America, home to more than 1.2 million
people and thousands of thriving businesses. Twenty-four hours a day, seven days a week,
365 days a year, we provide an essential service to the vast majority of the people who
comprise this culturally rich, diversified community.
A reliable water supply and a well-maintained infrastructure are critical to San Antonio’s
economic well-being and future growth. We understand this huge responsibility and
environmental commitment better than anyone.
SAWS is a dynamic, resilient organization with a staff of 1,596 dedicated professionals.
But our commitment goes beyond providing excellent water service at affordable rates.
We’re on a mission to remain a water utility benchmark that other water organizations
want to emulate.
The Board is optimistic about SAWS’ 2005 projected performance and looks forward to
serving each and every one of our valued customers.
James M. Mayor
Chairman
San Antonio Water System
Next: Customers
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