By Edmond Ortiz
Fair Oaks Ranch officials will begin a phased expansion of the city’s wastewater treatment plant, where construction will be partially funded by adjustments in customers’ wastewater service fees.
What is happening
City Council voted March 5 to pass a resolution authorizing the execution of an agreement with San Antonio-based Pesado Construction Co. to launch Phase I expansion of the town’s existing wastewater treatment facility.
Phase 1 improvements will include upgrades to the effluent pump station and lift station, pipeline conveyance improvements to the Fair Oaks Ranch Golf and Country Club property, and headworks odor mitigation.
Expansion of the local wastewater treatment plant has long been in the works. Council back in 2023 authorized engineering for the expansion project. City officials determined that expanding the existing plant was the most cost-effective option to meet both the city’s build-out capacity requirements, and the growing community’s needs.
In late 2024, consulting engineers prepared an opinion of probable construction cost, which was used to establish the city’s construction budget at $4.24 million.
Following the completion of final project designs, the city solicited construction contract bids in late 2025, and received three bids, with two bids each totalling more than $5.8 million, and a third bid coming in at more than $6.3 million.
City staff opted to go with Pesado, which submitted the lowest bid, and worked with the construction firm to lower its original bid by $170,000. The city then had Pesado add an alternate bid of $155,000 to cover odor control improvements for the expanded plant.
City staff recommended council approve Pesado’s bid of $5,801,968 and the $155,000 alternate bid.
Kelsey Delgado, project manager, told the council that a calculation error made by the engineers is the reason for the disparity between the original construction cost estimate and the construction bid amounts. She added that inflation has also taken its toll on the costs of construction labor and materials.
What is the cost impact
The expansion project has been included in the city’s five-year Capital Improvement Program, and as such will be funded through certificate of obligation debt.
City staff worked with the town’s financial advisory firm, SAMCO Capital, to find a way to fund the higher costs and minimize effects to local wastewater customers.
City staff recommended a debt structure designed to temper sharp fluctuations in the monthly fee in the early years of repayment rather than implement a sharper level debt service schedule. As a result, there will be what local officials called moderately higher total interest costs over the life of the project’s debt, but wastewater customers will not be adversely affected by yearly rate spikes.
The city now plans to raise its monthly wastewater debt service fee from a current $16.91 to $17.36 in the next fiscal year with small increases and decreases in subsequent years.
What they are saying
Council members agreed that while they would prefer not to proceed with a higher construction cost, they understood why it increased, and that the expansion project should focus on elements that will enhance the treatment plant’s longevity and resiliency.
“(This project) does have some bells and whistles that will save some trips, save some gas and save some hours,” Councilmember Jonathan Swarek said, referring to the amount of time and resources that public works personnel could expend at the facility.
City officials said construction could start as early as mid-April and wrap up about one year later.
