Local and Financial Aspects of Urban Water Management for
Six Cities at the U.S.-Mexico Border
2009
Local and Financial Aspects of
Urban Water Management for Six
Cities at the U.S.-Mexico Border
Project Coordinator:
Dr. Ismael Aguilar Benitez
Participating Researchers:
Dr. Socorro Arzaluz Solano
Dr. María Eugenia González Ávila
With the assistance of:
Isabel Sánchez Rodríguez*
English translation by:
Katrina Kargl, Alan Hynds, and Patricia S. Cejas
*We appreciate the support of Eduardo Loredo Guzmán, Carlos D. García Nieto,
Mayra Coronado Ramírez and Rosalía Chávez Alvarado for transcribing
interviews, inputting data and designing figures and tables.
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Table of Contents
Preface
v
Executive Summary
vi
Introduction
1
Study Objectives
4
I. General Characteristics of the Cities Studied and their Water Utilities (WU)
5
II. Evaluation of the Components for Determining Best Practices in Water Services
2.1. Local Management
2.1.1. Legal Framework Governing Water
2.1.2. Professionalization of the Service
2.1.3. Transparency in Information
2.1.4. Public Participation Mechanism
12
12
14
34
45
50
2.2. Financial Management of Water Services
2.2.1. Strategic Business Planning for Water Services
2.2.2. Financial Indicators
2.2.3. Commercial Efficiency
2.2.4. Financial Sustainability
63
64
75
84
100
2.3. Management of Water Quality
2.3.1. Infrastructure Maintenance and Improvement
2.3.2. Compliance with Standards and Regulations
2.3.3. Professionalization and Training
108
111
116
129
III. Best Management Practices Identified in the Cities Studied
134
3.1. Best Practices in Local Management
134
3.2. Best Practices in Financial Management
137
3.3. Best Practices in Managing Water and Wastewater Quality
140
IV. Final Note and Recommendations
141
4.1. Local Management
142
4.2. Financial Management
144
4.3. Water Quality Management
145
Bibliography
147
Annexes
Annex 1. Description of Water Rates
150
Annex 2. Water Quality Standard for Wastewater and Wastewater Treatment Plants
155
Photographic Annex
157
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Local and Financial Water Management for Urban Use in
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Index of Tables
Table 1.1. Breakdown of COMAPA-Nuevo Laredo Personnel
36
Table 2.1. Some Financial Indicators: Mexican Water Utilities, 2007
77
Table 2.2. Some Financial Indicators: U.S. Water Utilities
81
Table 2.3. Design of Water Rates for Mexican Cities
89
Table 2.4. Design of Water Rates for U.S. Cities
97
Table 3.1. Qualitative Evaluation of the Water Treatment Plants Visited
112
Table 3.2. Qualitative Evaluation of the Wastewater Treatment Plants Visited
115
Table 3.3. Water Quality Standards for Water Treatment Plants
118
Table 3.4. Characteristics of the WTPs in the Mexican Cities
119
Table 3.5. Regulations that Apply to Drinking Water Quality in U.S. Cities
121
Table 3.6. Characteristics of the WTPs Visited in the United States
122
Table 3.7. Regulations Governing WWTPs in Mexico
124
Table 3.8. Characteristics of the WWTPs in the Mexican Cities
125
Table 3.9. Institutions and Regulations Governing WWTPs in the United States
128
Table 3.10. Characteristics of the WWTPs Visited in the United States
128
Table 3.11. WTP and WWTP Personnel by Education Level in the Three Mexican Cities
130
Table 3.12. Level of Training Required for Del Rio, McAllen and Laredo (WTP and WWTP)
132
Table 3.13. Sludge Production and Disposal at the WWTPs in the Cities Studied
139
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Local and Financial Water Management for Urban Use in
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Index of Figures and Graphs
Figure 1. Location of the Six Cities Studied
12
Figure 3.1. Location of Water Treatment Plants by U.S. – Mexico Border City
109
Figure 3.2. Location of Wastewater Treatment Plants by U.S. – Mexico Border City
110
Graph 1.1. General Structure of the Legal Framework for Water in Mexico
15
Graph 1.2. Scope of Local Water Management in Ciudad Acuña, Nuevo Laredo and Reynosa
22
Graph 1.3. Scope of Local Water Management in Texas
25
Graph 1.4. Scope of Local Water Management in City of Del Rio, Laredo and McAllen
29
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Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Preface
Established in 1994, the North American Development Bank (NADB) is an international
financial institution capitalized and governed equally by the United States and Mexico.
Its main goal is to finance environmental infrastructure projects in the border region of
the two countries, which extends 2,100 miles from the Gulf of Mexico to the Pacific
Ocean, and encompasses an area about 62 miles north and about 186 miles south of the
international boundary. The issue of water management for urban use is a high priority
for NADB.
Local, financial and water quality management in this region is handled in
different ways, depending upon the institutional framework of each utility. For this
reason and in keeping with its mandate, NADB commissioned the Mexican research
facility, Colegio de la Frontera Norte (COLEF), to research and analyze local and
financial water management for urban use in three sister cities in the U.S.-Mexico border
region (Ciudad Acuña/Del Rio; Nuevo Laredo/Laredo and Reynosa/McAllen).
The purpose of this study is to compare the way water services are managed
locally, analyze the different ways in which investment in urban water infrastructure is
handled and identify a series of best practices in water management currently used by the
six cities studied.
It is important to clarify that the opinions contained herein are the responsibility
of the individual who expressed them and do not necessarily represent the point of view
of the institutions involved.
Jorge Silva
Technical Assistance and Training Specialist
North American Development Bank
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Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Executive Summary
This work examines the different ways in which water services are managed in cities
located on the border between northeast Mexico and southern Texas, in three areas: local
management, financial management and water quality management. Three pairs of sister
cities were included: Ciudad Acuña in Coahuila and Nuevo Laredo and Reynosa in
Tamaulipas, along with their corresponding counterparts: Del Rio, Laredo and McAllen
in Texas.
The purpose of this study is to compare the way in which water services are
managed locally, analyze different approaches to investment in urban water infrastructure
and identify a number of best management practices currently used in the six cities
studied.
In reviewing local management, the following aspects were considered: 1)
management autonomy, 2) service professionalization, 3) transparency and access to
information, and 4) public participation mechanisms. The findings among the cities were
dissimilar, basically because of the different legal frameworks and the political ends for
which the service is used in Mexico. These differences are reflected in relatively better
performances by the U.S. cities as compared with the Mexican cities.
It can be asserted that water services are more financially viable in Texas than in
Mexico. These services are characterized by: a business focus to the services that entails
annual financial planning, low reliance on external sources of funding, and appropriate
user fee adjustments and collection rates. This financial approach does not eliminate
performance-related problems arising from the provision of services; however, it does
vi
Local and Financial Water Management for Urban Use in
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allow for the development of strategies to deal with problems in service operations. A
key characteristic that U.S. cities have for financing water services is that they may sell
bonds and use them as financial instruments. In contrast, Mexican cities rely heavily on
federal or state appropriations.
In terms of water quality management, water and wastewater treatment plants in
the six cities were inspected and analyzed, including the condition of the infrastructure,
regulatory compliance, and staff professionalization and training levels. Here again,
different practices were identified between the two groups of cities.
This study highlights clear and specific differences in the management of water
services between Mexico and the United States. Even though U.S.-Mexico border cities
have to share the water in the region, because of institutional differences, each group of
cities (Mexican and U.S.) manages, administers and handles their water services and
water quality differently, which makes it difficult to compare and exchange management
experiences. Nevertheless, this document identifies a number of best practices in each
group of cities and provides some recommendations for improving the management of
water services in the region.
vii
Local and Financial Water Management for Urban Use in
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Introduction
Urban development is unfeasible without adequate water services. A distinction must be
made between water as a resource and water services for urban use (OECD, 2003; World
Water Council, 2003). This distinction is important in identifying possible obstacles to
the financial sustainability of water services. Water as a natural resource involves its
extraction and distribution among various uses. It also entails the protection of surface
water bodies and underground water reserves. Water services for urban use, on the other
hand, involve the investment, operation and management of infrastructure systems, the
provision of drinking water and the collection of wastewater. This study deals exclusively
with the management of water services for urban use. Assuring the provision of safe,
reliable and affordable water services is one of the major challenges facing fast-growing
urban centers, such as those along the U.S.-Mexico border.
The U.S.-Mexico border region is one of the areas with the lowest quantity of
water available per inhabitant in Mexico. Water availability ranges from extremely low
(Water Region VI) to average (Water Region IX), in addition to tremendous pressure put
on the aquifers (Mexican federal water agency, CNA, 2000). Storage volumes in the
major reservoirs in the region dropped from 60% of their capacity in 1990 to 20% in
2000 (CNA, 2003). This shortage is important, as surface water is the main source of
water for urban consumption in the region.
Because of economies of scale and scope utilities usually have a monopoly on the
services provided in urban areas. The cost of multiple systems makes competition
unfeasible. In general, the complex nature of water services makes sustainable financial
1
Local and Financial Water Management for Urban Use in
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management difficult. These characteristics create potential risks for public and private
utilities, which become real problems when the services are not managed efficiently.
Differences in legal and institutional structures between Mexico and the U.S.
further complicate water management and urban water services on the border. In Mexico,
there is little data on how local governments handle utility service management.
However, it is important to study the different ways in which local governments have
managed water services, especially since water is a resource that has to be shared with the
neighboring local government, which in this case operates under a different institutional
framework.
For this research project, three pairs of sister cities located on the Mexico-Texas
border were studied as units: Ciudad Acuña, Coahuila and Del Rio, Texas; Nuevo
Laredo, Tamaulipas and Laredo, Texas; and Reynosa, Tamaulipas and McAllen, Texas.
The research study encompasses two Mexican border states (Coahuila and Tamaulipas)
and three municipalities: Acuña, Reynosa and Nuevo Laredo; which provide three
different case studies in terms of economic development. On the U.S. side, one state
(Texas) and three local governments were covered.
Studying local management on the border allows for a comparison of cities
sharing the same water sources, with strong economic and social ties, but completely
different institutional frameworks. This analysis helped identify water management
practices from different perspectives (administrative, financial and environmental) that
may lead to improved water management for urban use on the border. This approach also
permits the analysis of different management practices generated under very different
2
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
institutional frameworks (i.e. laws, regulations and standards) and their impact on the
financial and environmental sustainability of water services. Various sources of
information were used in this study: water utility databases and files, websites of local
governments and utilities, newspaper archives and interviews of local officials
responsible for different areas related to the provision of water services.1
1
The authors appreciate the assistance and cooperation provided by utility officers and all the people who
granted us interviews and helped us carry out the field work for this project.
3
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Study Objectives
Overall Objective:
To analyze local and financial water management for urban use in three pairs of sister
cities (Ciudad Acuña/Del Rio; Nuevo Laredo/Laredo, and Reynosa/McAllen) on the
U.S.-Mexico border.
Specific Objectives:
1) To analyze and compare local management of public water services in six cities
on both sides of the U.S.-Mexico border.
2) To examine the different ways investment in water infrastructure for urban use is
managed in the six cities studied.
3) To identify a number of best practices in water management (administrative,
institutional and environmental) based on the different current practices used in
these cities.
4
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
I. General Characteristics of the Cities Studied and their Water Utilities (WU)2
Mexican Border Cities
Acuña, Coahuila
The municipality of Acuña is located in northeastern Mexico and covers an area of
11,487 km2 (approx. 4.25 square miles), making it the second largest municipality in the
state of Coahuila.
Acuña borders the Rio Grande to the north, which marks the
international boundary between the U.S. and Mexico; the municipalities of Jiménez,
Zaragoza and Múzquiz to the south; the municipality of Jiménez and the Rio Grande to
the east; and the municipality of Ocampo to the west. Its municipal seat, Ciudad Acuña,
is located in the eastern region of the municipality.
In 2005, the municipality of Acuña had a population of 126,238 inhabitants, 98%
of which was concentrated in Ciudad Acuña.3
According to projections from the
Mexican national population council, Consejo Nacional de Población (CONAPO), this
figure is expected to reach 295,000 inhabitants by 2018.
Acuña obtains its water supply for urban use from both ground and surface water
sources. Surface water is obtained from the Rio Grande River through two intakes: one
located just downstream of the Amistad Dam and the other is located at a smaller dam
12.7 miles downstream from the Amistad Dam.
Groundwater comes from an
underground aquifer and is pumped through two deep wells.
2
In this study we will use the term Water Utility for both Mexican and U.S. cities, with the observation that
in the latter case water service operations are provided in different ways: as a department of the local
government, as an area of the local public service department, etc.
3
II Conteo de Población y Vivienda (II Population and Housing Count), Mexican national statistics
institute, INEGI, 2005.
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Local and Financial Water Management for Urban Use in
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The local water utility, Sistema Municipal de Agua Potable y Saneamiento de
Ciudad Acuña (SIMAS), is responsible for providing water and sewer services. In
December 2007, the water registry listed 37,529 users, with 95% classified as residential
users, 3.97% as commercial users, and 0.03% as industrial users.
Ciudad Acuña has two water treatment plants (Cd. Acuña and La Amistad), which
as of December 2007 produced a total of 3.07 million gallons. It also has a wastewater
treatment plant (Cd. Acuña) with the capacity to treat 4.68 million gallons a day (mgd).
Nuevo Laredo, Tamaulipas
The city of Nuevo Laredo is located in the northern region of the state of Tamaulipas and
borders the United States and the state of Nuevo Leon to the north; the state of Nuevo
Leon and the municipality of Guerrero to the south and west; and the United States to the
west. Nuevo Laredo is virtually flat, with no major elevations or depressions. According
to the II Population and Housing Census taken in 2005, the municipality had a population
of 355,827 inhabitants.
The only source of water for urban use in Nuevo Laredo is the Rio Grande River,
which also serves as the boundary between Mexico and the United States. This river has
two natural spillways, the Coyote stream to the south of Alazanas, and smaller streams to
the west, such as Laguito, Estero Reventado, Abandonado, Sandra, Ortillo, Carrizo,
Aguas Negras, El Gobierno, Ramireño and Cedena, from which water is also pumped.4
4
http://nuevolaredo.gob.mx/ciudad/datosgenerales.shtml
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Local and Financial Water Management for Urban Use in
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The city’s first water system was built in 1926. Currently, the decentralized entity
responsible for providing water and sewer services in Nuevo Laredo is the local water
utility, Comisión Municipal de Agua Potable y Alcantarillado (COMAPA-Nuevo
Laredo). Established as such in 2002, it is worth noting that since that time, the utility has
been headed by the same manager, Jesús Valdez Zermeño.
As of September 2007, COMAPA-Nuevo Laredo provides service to a total of
107,609 users, the majority residential users (95%). Commercial users represent only
4.8%; while industrial users rank third at 0.2%. Total water consumption in 2007 was
661,877,304 gallons.
COMAPA-Nuevo Laredo has two water treatment plants: the Central and
Southeastern plants; as well as three wastewater treatment plants: the International
Wastewater Treatment Plant (IWWTP), the ORADEL WWTP and the Land Reserve
WWTP.
Reynosa, Tamaulipas
The municipality of Reynosa is located in the northern region of the state of Tamaulipas
and borders the United States to the north, across the Rio Grande; the municipality of
Méndez to the south; the municipality of Rio Bravo to the east and the municipality of
Díaz Ordaz and the state of Nuevo Leon to the west.
According to the II Population and Housing Census taken by INEGI in 2005,
Reynosa had a population of 526,888 inhabitants.
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Local and Financial Water Management for Urban Use in
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Water in Reynosa comes from two irrigation systems: the San Juan River and the
Rio Grande. The main source of water for urban use is the San Juan River, which
provides water for irrigation and urban use, as well as irrigates the southern portion of the
municipality. There are an infinite number of canals, the largest of which are the Rhode
and Anzaldúas Canals.5 Water is collected at the Anzaldúas Diversion Dam and then
pumped to the Loma Linda and PEMEX water treatment plants. The entity responsible
for providing water and sewer services in Reynosa is the local water utility, Comisión
Municipal de Agua Potable y Alcantarillado (COMAPA-Reynosa).
Reynosa has a plant consisting of oxidation ponds for wastewater treatment,
located in the northeastern area of the municipality, between the Anzaldúas Canal and the
Rio Grande, next to the highway to Matamoros along the Rio Grande.
U.S. Border Cities
Del Rio
The city of Del Rio is located in Val Verde County in South Texas and covers an area of
15.4 square miles. Del Rio is located to the north of the Rio Grande River, which
physically separates it from the city of Acuña in the state of Coahuila. Together these two
cities form one of the six metropolitan areas along the U.S.-Mexico border. Del Rio had a
population of 33,867 in 2000, which is estimated to have grown to 35,957 in 2005.6
5
Instituto Nacional para el Federalismo y el Desarrollo Municipal (Mexican national institute for
federalism and municipal development), 2005. Enciclopedia de los Municipios de México (Encyclopedia of
Mexican Municipalities).
6
Texas State Data Center.
8
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The city’s main water supply is the San Felipe Springs, which provides
approximately 150 million gallons of water per day,7 with most of the water coming from
the East and West Springs. Since 1919-1920, the city government, through its Public
Works Department, has been responsible for providing water and sewer services.8
Del Rio currently has a water treatment plant, the San Felipe Springs Water
Treatment Plant, with a production capacity of 18.2 million gallons a day. The city also
has two wastewater treatment plants (Silver Lake and San Felipe).
Laredo, Texas
The city of Laredo is located in Webb County in the state of Texas, on the banks of the
Rio Grande River, and borders the Mexican states of Tamaulipas and Nuevo Leon to the
south. Laredo is the largest city in the county, covering an area of 88.44 square miles. Its
population in 2005 was 207,787.9
The main source of water for Laredo is the Rio Grande River, from which
approximately 45 million gallons/day is pumped.
Water and sewer services are currently provided by the city government through
its Utilities Department. This city is the only one in the study that has previous
experience with a private operator. In 2002, it entered into a five-year agreement with
the company United Water; however, this arrangement only worked until mid-2005,
when the services were returned to the control of the local government.
7
Del Rio Chamber of Commerce, www.drchamber.com.
City of Del Rio, 2002.
9
U.S. Census Bureau, www.census.gov.
8
9
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The Utilities Department of the City of Laredo has a customer base of 51,043
accounts, with 91% residential users and 9% commercial users.
Laredo has two water treatment plants (Jefferson and Colombia) with a capacity
of 66 million gallons/day, as well as three wastewater treatment plants (North, South Side
and Zacate).
McAllen, Texas
The city of McAllen is located in Hidalgo County in South Texas, in an area known as
the Rio Grande Valley. It is only five miles away from the Mexican border, where its
closest Mexican counterpart is the city of Reynosa, Tamaulipas.
According to the U.S. Census Bureau, McAllen covers an area of 46.3 miles2 and
had a population of 116,376 in 2005, with a growth rate of 1.8% between 2000 and
2005.10
As in Laredo, the main source of water for McAllen is the Rio Grande River. The
McAllen Public Utility (MPU) is responsible for providing water and sewer services.
MPU has three treatment plants: Plant 1 was constructed in 1918; however, the
growing demand for water necessitated the construction of two more plants, the
Southwest Water Treatment Plant, with a capacity of 35.64 million gallons/day and the
Northwest Water Treatment Plant, with a capacity of 8.25 million gallons/day.
McAllen also has two wastewater treatment plants: the South Wastewater
Treatment Plant, with a capacity of 10 million gallons/day; and the North Wastewater
10
Ibid.
10
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Treatment Plant, which was recently expanded from 6 million gallons/day to 8 million
gallons/day. Water consumption recorded by MPU in fiscal year 2006-2007 was
7,608,685 gallons.
The location of the six cities included in the study is shown in Figure 1.
Source: Author’s own design
Figure 1. – Location of the Six Cities Studied
11
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
II. Evaluation of the Components for Determining Best Practices in Water Services
2.1. Local Management
This section addresses the different facets of the municipal management of public
services. One aspect of this management can be defined by the manner in which
governments handle the tasks for which they are legally responsible. The concept of local
government used in this document refers ―to the municipal or provincial level of the
social and political organization of a country and to the sphere of control of an institution,
administration, agency or social group. The notion of local government defines political
units of government of varying sizes—states, municipalities, cities—that are
geographically and administratively delimited and socially and culturally heterogeneous.‖
(Ramírez Kuri, 1999: 1)
There are basic differences between the forms of government in the two countries
of this study. Whereas in Mexico local authorities play both a political and managerial
role, in the United States these two roles are kept separate. This necessarily affects the
form of governing and especially the provision of utilities.
In Mexico, the local government is responsible for managing all types of
services—from public lighting to trash collection and water disposal—as set forth in
Article 115 of the Constitution. The problem is that this legislation treats all services the
same, even though water, by its very nature, requires special treatment.
In the United States the management of services is different, as set forth in federal
legislation and in specific state, municipal or local provisions. Public services are
supervised differently, especially in the case of water, which is controlled by
12
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
administrative agencies with clearly defined boundaries, unlike in Mexico, where water
management is eminently political.
In the three American cities examined in this study—Laredo, McAllen and Del
Rio, sister cities of Nuevo Laredo, Reynosa and Acuña, respectively—the highest
authority is the mayor. Texas cities also have a city manager, whose most important duty
is to oversee the operation of all the administrative agencies. In Mexico, this position
does not exist.
In the specific case of public services, a number of elements are considered for
determining that a certain management is appropriate for the type of services and for the
territory where they are provided.
Of these elements, three are highlighted in the case studies: (1) professionalization
of the service, (2) transparency in the information provided to users, and (3) forms of
public participation in the processes.
Before presenting the results of these indicators in the cities studied, we will
examine the main legal provisions that currently govern water in both countries and in the
respective cities, in order to have a clearer understanding of these processes—which are
extremely different in the two countries—and how they work.
13
Local and Financial Water Management for Urban Use in
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2.1.1. Legal Framework Governing Water
The Case of Mexico
Until the 1990’s, water in Mexico was managed through a centralized institutional
arrangement that did not take into account its scarcity but rather was based on the idea of
its abundance. (Amaya, 2007: 19)
In 1983, a decentralization process began and the responsibility for managing
urban services, including water, was transferred to the municipalities. At the institutional
level, the definition of a new water management policy had two broad implications:
1. Establishment of a new regulatory framework that would allow the traditional
stakeholders to participate in new ways, while at the same time encouraging new
players to take the political stage.
2. Creation of new institutions at the federal, state and municipal level (ibid, 19).
Graph 1.1 provides a general description of the legal framework governing water service
in Mexico.
14
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
NATIONAL WATER LAW
EXECUTIVE
Mexican Constitution Art. 27 y 115 fracc. III.
Mexican Ministry of Environmental and
Natural Resources
(SEMARNAT)
MEXICAN MINISTRY OF
HEALTH
Health General Law
Art. 118 fracc. VI, Art. 119
fracc. II, Art. 121, 122 y 457
NOM SSA
SEMARNAT Internal Ordinances
FEDERAL
CONGRESS
National Water Law
National Water Law Ordinances
NOM SEMARNAT
State Development Plan
National Water Commission
(CNA)
STATE GOVERNMENT
Water Sector Oficial Rules
CNA Internal Ordinances
State Water and Wastesater
Treatmetn Law
LOCAL
CONGRESS
State Water Commission
Internal Odinances
CNA State Division
Water and
Wastesater
Treatment Section
BASIN
ORGANIZATIONS
State Water and
Wastewater Treatment
Comission
Municipal
Development
Plan
MUNICIPALITIES
City Council: Utility
Ordinances
UTILITY ADVISORY
COUNCIL
UTILITY
(COMAPA. SIMAS)
Federal Attorney's Office
of Consumer (PROFECO)
Source: Author’s own design
Graph 1.1 – General Structure of Legal Framework for Water in Mexico
15
Local and Financial Water Management for Urban Use in
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Consistent with this new framework, in April 2004 the National Water Law was
amended. These reforms were aimed at the following areas:11

Management of national waters by basin;

Participation of states, municipalities and the federal government in decisions
regarding the management of national waters and their inherent common good;

Institutional strengthening with a new organization
Since then, the stakeholders involved in managing this resource are:

the national water agency, Comisión Nacional del Agua (CNA), at the federal
level;

the basin organizations, at the regional level;

the respective governments and water agencies, at the state level; and

lastly, the municipalities and utilities.
At the federal level, CNA was established as a decentralized, autonomous agency of the
Mexican Ministry of Environment and Natural Resources (SERMARNAT). Through
CNA, the executive branch of the federal government exercises powers of authority over
water-related matters. It is the highest technical, regulatory and advisory agency in the
country for the comprehensive management of water and its inherent common good.
11
Some of this information is based on the talk, "Marco legal del agua en México (Legal Framework of
Water in Mexico)," Binational Rio Grande Summit in Reynosa, Tamaulipas, November 2005, available at
www.cila.org.mx
16
Local and Financial Water Management for Urban Use in
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CNA is generally responsible for the following duties:

Proposing water policy;

Establishing water regulations;

Planning strategic projects and infrastructure for national security;

Managing federal resources;

Acting in inter-basin and cross-border issues.
The next level in water management is the basin organizations, which are specialized
legal and administrative technical units answering directly to the head of CNA, with
regional jurisdiction over basins, as set forth in the law and regulations, and with a
specific budget and resources as set by CNA.
These basin organizations have administrative, technical and executive autonomy
to exercise their functions and manage the assets and resources entrusted to them, and
answer directly to the director of CNA.
They are responsible for:

Carrying out regional programs;

Ensuring the sustainability of the basins;

Managing and overseeing regional resources;

Acting in inter-state issues.
17
Local and Financial Water Management for Urban Use in
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The third level in the administration of water resources is responsible for duties such as
developing and monitoring state programs, executing agreements, and establishing
cooperative agreements when needed.
For the cities included in this study, local legislation specifies certain
circumstances that require comment. In Coahuila, the Law for Water and Wastewater
Services in Municipalities establishes that:
The provision of drinking water and the collection, treatment
and disposal of wastewater will be the responsibility of the
municipalities, which may provide them individually or in
coordination or partnership with each other, in accordance
with the law and other applicable provisions. These
municipal public services may also be provided through
decentralized agencies or government-run entities established
in accordance with the provisions set forth in the Municipal
Code for the state of Coahuila.
Concessions for the provision of these services may be
granted by city governments to individuals or legal entities,
in accordance with the provisions set forth in the Municipal
Code for the state of Coahuila. (Art. 2)
Therefore, the powers and functions for providing drinking water and wastewater
collection, treatment and disposal services will be exercised by:
I. Decentralized agencies of the municipal public administration, to be called,
Sistema de Agua y Saneamiento (Water and Wastewater System);
II. Government-run entities established in accordance with the Municipal Code for
the state of Coahuila; or
III. Private entities that obtain a concession to provide the service in accordance with
applicable provisions. (Art. 4)
18
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
In the case of Tamaulipas, the state Law of Public Service for Drinking Water and
Wastewater Collection, Treatment and Disposal establishes the legal guidelines for water
management in the state.
Article 4 establishes that this public service is the responsibility of the
municipality. Subject to a prior agreement between or among the local governments,
municipalities may coordinate with each other and enter into partnerships to provide
these services more effectively; to this end, they must have the approval of the state
Congress pursuant to the state Municipal Code.
Municipal governments may also enter into agreements with the state
government, so that the latter may, directly or through the appropriate agency,
temporarily assume responsibility for providing the public service set forth in this law, or
provide the service in coordination with the municipality.
Moreover, the law provides for the establishment of decentralized public agencies
of the municipal public administration with legal capacity and their own assets, and with
the administrative authority to conduct various duties related to providing these services.
The last level in the management of water resources in Mexico is the
municipalities, with federal regulations, state legislation and local statutes.
Article 115 of the Constitution establishes the provision of municipal public
services, which sets forth, inter alia, that: ―Municipalities will be responsible for the
following public services and functions: I. Drinking water and wastewater collection,
treatment and disposal.‖
19
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
In Coahuila, the town council, exercising its powers, published the ordinances of
the local utility, Sistema Municipal de Aguas y Saneamiento del Municipio de Acuña
(SIMAS-Acuña).
These ordinances establish SIMAS-Acuña as a decentralized government entity of
the municipal public administration of Acuña, with legal capacity and its own assets. Its
purpose is to construct, rehabilitate, expand, manage, operate, conserve, and maintain the
systems for drinking water, desalinization, and wastewater collection and treatment for
the municipality of Acuña, as well as to set and collect user fees for the provision of these
services. (Art. 3)
A board of directors acts as the governing board of SIMAS-Acuña, and the
ordinances establish its powers and authority, as well as those of each of its members.
One of the main duties of the board is to select the utility manager from a short list of
candidates.
The ordinances also establish the rules governing board meetings, as well as
guidelines for managing the utility’s finances. In addition, they regulate issues related to
labor relations with the utility’s employees.
In Nuevo Laredo the internal regulations of the local utility, Comisión Municipal
de Agua Potable y Alcantarillado (COMAPA-Nuevo Laredo) establish that: ―the
provision of drinking water and wastewater collection and treatment services is a public
service that is the responsibility of the government-run utility called Comisión Municipal
de Agua Potable y Alcantarillado del Municipio de Nuevo Laredo (COMAPA-Nuevo
Laredo)‖.
20
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The ordinances also call for the establishment of a board of directors, composed
of the mayor and representatives of the town council and advisory council, a district
delegate, state and municipal officials, and a representative of the state water agency.
The municipality of Reynosa has its own regulations, which
establish that:
The Commission, as a public entity, will collect and manage, in
its capacity as a municipal fiscal authority, the fees for the
services that it provides, in accordance with the State Fiscal
Code, Municipal Code, Municipal Revenue Law, and other
relevant municipal fiscal laws. The public service will comply
with the principles of generality, continuity, regularity,
uniformity, quality, efficiency, and coverage to meet the demand
of different users, promoting the actions necessary to achieve
financial and technical self-sufficiency. (Art. 4)
This body of rules also sets forth the purpose, powers and authority, assets, and
administrative structure of COMAPA-Reynosa.
One section governs the professionalization of civil servants:
The utility will establish an ongoing system of professionalization
for its employees through efficiency and management quality plans
aimed at improving their level of training, in accordance with the
programs approved by the board of directors and proposed by the
general manager. (Art. 68)
It also includes a series of technical provisions for providing the service.
Finally, with respect to public participation, two mechanisms are included: an
advisory council (Art. 74) and the appointment of honorary inspectors to encourage the
rational and efficient use of water in the municipality (Art. 197-199).
21
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Graph 1.2 provides a broad description of local management in the three Mexican
cities studied.
Federal Government
City Council
City Mayor
State Government
Advisory Council
City Mayor
COMAPA/
SIMAS
Utilities
Department
Source: Author’s own design
Graph 1.2 - Scope of Local Water Management in Acuña, Nuevo Laredo and Reynosa
Water Management in Texas
Water in the United States is regulated by the following main laws and agencies:
At the federal level:

The U.S. Constitution

The U.S. Environmental Protection Agency (EPA)
At this level of government there are few references to water management at other levels
of government. Nonetheless, water quality and the levels suitable for human consumption
22
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
are regulated by EPA provisions. The U.S. federal government basically overseas service
standards, while state and local governments are responsible for establishing other types
of relevant provisions.
At the state level:

Texas state government

Texas Constitution

Texas Water Code

Texas Administrative Code

Texas Commission of Environmental Quality (TCEQ)

Texas Water Development Board (TWDB)
At the state level, the state constitution is the main legal instrument governing water
in Texas; it also establishes some water service regulations. However, this issue is
addressed in greater detail in the Texas Water Code and the Texas Administrative Code.
Issues that fall under state jurisdiction are the quantity and quality of water, as well as the
user fees charged for this service.
Lastly, the local government level is basically governed by the municipal code of
each city:

Code of Ordinances, City of Del Rio, Texas, 2006

Code of Ordinances, City of McAllen, Texas, 2007

Code of Ordinances, City of Laredo, Texas, 2006
23
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
These codes regulate practically all aspects of local life in Texas cities, including water
services. The regulations cover everything from technical issues to types of penalties and
user fees, as well as emergency plans. They are much more specific instruments than
similar ordinances in Mexico.
In the United States, local water service depends on an administrative department,
not an autonomous agency; however, because the legal framework regulating it is so
concrete, there is very little room for bad practices.
Graph 1.3 provides a description of the legal framework governing water in the
United States.
24
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Clean Water Act
US Environmental
Protection Agency
(EPA)
State
Government
Surface Water
Groundwater
Texas Commission
of Environmental
Quiality
(TCEQ)
Texas Groundwater
Protection
Committee (TGPC)
Texas Water
Code
Texas State Solid
and Water
Conservation
Board
(TSSWCB)
Texas Water
Development
Board
(TWDB)
Special Districts
City Council
City Code
City Mayor
City Manager
Citizen
Boards
Utilities
Department
Source: Author’s own design
Graph 1.3 – Scope of Local Water Management in Texas
25
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The local government in U.S. cities is defined as a ―council-manager‖ form of
government. The city's powers are exercised by an elected city council.12
City councils are responsible for setting policy, approving the annual budget,
setting tax rates, buying and selling property, establishing the city's administrative
departments, holding public meetings, adopting city ordinances, and establishing city
services.
Authority is exercised by the mayor in conjunction with the Council. Mayors are
elected by popular vote for four-year terms and may serve a maximum of two terms.
In U.S. cities, mayors have the following powers and authority:
1) Preside over city council meetings;
2) Act as the head of the city government and officially represent the city, although
they do not have any administrative duties;
3) Cast the deciding vote in the event of a tie in a Council vote;
4) Exercise their right to veto, which may be overruled by a majority vote of the city
council.
The city council appoints the following officials:
12

City manager

City attorney

City clerk

Municipal court judge(s)

Fire chief
Hereinafter, "the Council."
26
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border

Police chief

Members of citizen boards
One of the administrative departments is Utilities. This department generally has an area
in charge of water management.
Divisions that make up the Utilities Department (water):

Administration

Engineering

Customer service

Operations - water treatment

Distribution

Wastewater collection and treatment
In these cities, by law, ordinances must be passed for the following actions:
1) Adopting or amending an administrative code or establishing, modifying or
eliminating any city department, office or agency;
2) Establishing a fine or other penalty or establishing a standard or regulation the
violation of which results in a fine or other penalty;
3) Collecting taxes;
4) Renewing or extending a franchise;
5) Regulating the price of public utility services;
6) Authorizing loans;
7) Leasing or authorizing the transfer or lease of land anywhere in the city;
27
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
8) Creating councils and commissions as set forth by state law;
9) Amending or repealing existing ordinances;
10) Prescribing standards for the issuance of business or other licenses; and
11) Determining the salary of all city officials and employees.
Acts other than those indicated above can be carried out either by ordinance or by
resolution, as prescribed by law. In response to emergency situations affecting lives,
health, property or public peace, the city council may adopt one or more emergency
ordinances.
A general description of local management in the U.S. cities studied is provided in
Graph 1.4.
28
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Federal Government
State Government
City Council
City Mayor
City Manager
Citizen boards(1)
Utilities Department
(1) In Del Rio this function is performed by the Utilities Commission and in
McAllen by the Board of Trustees. This board does not exist in Laredo.
Source: Prepared by authors
Graph 1.4 – Scope of Local Water Management in Del Rio, Laredo and McAllen
Bond Issues
One of the main differences between the management of cities in the United States and in
Mexico is that the former have the authority to issue bonds.
29
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The law establishes that city governments have the power to borrow money by
issuing general obligation bonds for the acquisition, conservation and improvement of
public property or any other non-public purpose.
The legislation provides that, except for the repayment of previously issued
bonds, any proposed borrowing through the issuing of bonds must previously be
approved by a majority vote of residents in an election in order for such debts to be
authorized.
The city council is responsible for collecting an annual tax sufficient to pay the
interest required by law on all outstanding general obligation bonds of the city
government.
The Council will have the power to establish the terms and conditions of the
purchase agreement, contract, mortgage, bond or other desired or required documents for
the issue of revenue bonds and the acquisition and operation of this type of asset or
interest.
The Council is authorized to issue certificates of obligation in accordance with the
laws of the State of Texas.
The city government will designate a major bank to lend and deposit them,
specifying the banking services. These banks are designated through a deposit or
contract.
With respect to the provision of public services, the law establishes that the city
can offer residents water, gas, electricity and other essential services as determined by the
city council, which has the power to construct or purchase the facilities needed to provide
30
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
these services, as well as to regulate and set user fees and other conditions for these types
of services.
City governments may contract public utilities or private companies to offer
water, gas, electricity and other essential services to the city and its residents. In this case,
the city council is authorized to regulate and prescribe the user fees and conditions of
these services.
As we can see, the main difference in the forms of management in the two
countries has to do with the political handling of the utilities in Mexico and the
independence of this area in the United States. The key issue is that in Mexico there is a
close relationship between the mayor and the water utility administration, while in Texas
the existence of a city manager13 prevents the politicization of the services. In Mexico,
the mayor is involved in the decision-making, while in Texas it is the Manager and the
utility directors who set the agenda.
Binational Agencies14
As part of the water management process in border cities, we must comment on the role
played by the International Boundary and Water Commission (IBWC), which is
responsible for overseeing the proper use of this resource, the source of which is shared
by both sides of the border (the Rio Grande).
13
Henceforth, "the Manager."
The sources of information for this section are an interview with the representative of the Mexican
Section of the International Boundary and Water Commission (IBWC) in Nuevo Laredo, as well as the
webpages of the IBWC, the Border Environment Cooperation Commission (BECC), and the North
American Development Bank (NADB).
14
31
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
When this agency was originally established in 1898, its purpose was to delineate
the boundaries between the United States and Mexico, since at the time the border
between the two countries was not clear. Its powers were later expanded to include water
resources, so in its current form IBWC was established in 1944.
IBWC currently has regional offices in the major cities on the border; its main
offices are located in El Paso, Texas. The directors of these offices meet twice a year: at
the beginning of the year to formulate the annual plan and at the end of the year to
evaluate what has occurred during the year.
The Mexican Section of this agency answers to the Mexican Ministry of Foreign
Affairs, advising it on technical issues related to water management, since each office
monitors the water quality of the Rio Grande on a weekly basis. The results are published
in the newsletter, Boletín Hidrométrico, which is available to the public.
On the northeastern border of Mexico, this agency played an important role by
arranging the construction of one of the water treatment plants in Nuevo Laredo a few
years ago.
Indeed, Nuevo Laredo was considered one of the most polluted areas in the border
region in the 1980’s. Therefore, a binational project was generated that included several
works: construction of the riparian along the Rio Grande river, fixing the sewer system in
the city's downtown area, and construction of the treatment plant in 1996.
The construction of this plant called for the coordination of several federal, state
and municipal agencies, as well as the utility COMAPA-Nuevo Laredo, which at that
time answered to the state government.
32
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
It should be noted that, to date, the IBWC representative in Nuevo Laredo
continually supervises the treatment plant to oversee its operation and the maintenance of
the equipment.
Another task that was carried out is a study of the water utility. The purpose of the
study was to detect the main obstacles to the proper operation of COMAPA-Nuevo
Laredo, which led to the following conclusions:

Sixty percent of the water system had leaks and the pipes were obsolete;

There were no meters, so a single, flat rate was being applied;

The rates were extremely low and had not been raised for political reasons;

Payments were delinquent, and there was no way to pressure people to pay.
A consulting firm was commissioned to perform the study, and the findings have served
as a guide for the supervision of COMAPA-Nuevo Laredo.
The other players involved in this binational management mechanism are BECC
and NADB, as funding agencies of projects related to the improvement of water
infrastructure in border cities. Basically, projects must meet the following criteria:

Provide a public health benefit

Be technically and financially viable

Be endorsed by local residents
33
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Project studies aimed at improving water infrastructure have been conducted in several
border cities. The complete list of projects can be found on the respective webpages of
the organizations.
It is worth noting that, at least in the case of Nuevo Laredo, the different levels of
government (federal, state and municipal) and the binational agencies responsible for
water management are working together.
2.1.2. Professionalization of the Service
In Mexico, the concept of professionalization in municipal government is just beginning
to be discussed. Some states have enacted laws to establish civil service careers, and this
obligation has been extended to the municipalities in those states (Merino, 2007: 38).
Even so, it is a fact that administrative bodies in the municipalities still function based on
politics.
For this reason, in the case of Mexico it is difficult to establish a professional
profile of the officials responsible for managing water utilities, despite the fact that most
state laws establish minimum experience requirements for the position.
Results in Mexican border municipalities vary, but there is no doubt that the
political profile of these officials stands out more than their experience or education.
Another aspect considered in this section is the structure of municipal
organizational charts and the role played by water utilities within Mexican municipal
governments.
34
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
In Nuevo Laredo, the person in charge of the utility is a civil engineer who has
held his post for two terms. This situation is unusual in Mexican political practice and
may offer advantages for the continuity of projects. There has not been any change in the
governing political party in this city in recent municipal elections.
As set forth by law, the highest level in the organizational chart is held by the
board of directors, followed by the general manager of the utility. Several offices answer
to the general manager: the comptrollership, legal department, commercial and
administrative advisor, public communication department, training department (also in
charge of the Water Culture Program), and a systems department.
Three areas answer directly to the general manager: Commercial, Technical and
Administrative-Financial Divisions. Based on its staff size and responsibilities, the most
important area is the technical division.
The Commercial Division is basically responsible for billing, service cut-off,
contracts, metering, and customer service. It is made up of six departments that deal with
these issues. In terms of number of employees, the largest is the billing department,
which includes data entry operators, meter readers, and inspectors.
The Technical Division comprises the departments of Water Quality, Wastewater
Treatment, Pipelines and Operations, and includes two plants: Center and South-East.
The Administrative and Financial Division includes the Finance, Procurement and
Administration and Human Resources Departments; it is the division with the smallest
number of employees.
35
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
The breakdown of employees in several categories is worth noting (see table
below).
Table 1.1 - Breakdown of COMAPA-Nuevo Laredo Personnel
Type of Contract
Number of Employees
Non-union temporary
28.96%
Non-union permanent
11.56%
Union temporary
21.73%
Union permanent
37.75%
Source: Prepared by authors using information provided by COMAPA-Nuevo Laredo.
As Table 1.1 shows, the largest number of employees is unionized, while at the other end
there is a high percentage of non-union temporary employees, who are the most
vulnerable to changes in government and who, in addition, do the most specialized work.
In Reynosa, the utility has followed a different path: The person in charge of
COMAPA-Reynosa is an engineer by profession and was recently appointed. It should be
noted that a different political party recently assumed office in this municipal
government, which has meant a complete reshuffling of staff in the main departments. In
addition, action has been taken against the previous administration, which is accused of
corruption and using the utility for political ends.
At the highest level is the board of directors, followed by the general manager,
who oversees the Statutory Auditor, the Water Culture Coordination Department, the
Legal Department, the Public Relations Department, the ISO Coordinator, the Public
36
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Communication Department, and the recently created Comprehensive Citizen Service
Coordination unit.
The Administrative Division is composed of several coordination areas: quality
management, human resources and payroll, material resources, general services, systems,
and security and surveillance. Because of its functions, the area of general services has
the largest staff.
The Commercial Division is responsible for providing service and is composed of
the following coordination areas: billing, metering and inspection, contracting, high
consumption, low consumption, recovery of past-due accounts, and off-site billing and
collection offices, in which the service has been divided based on city characteristics.
In this division, the coordination areas with the largest staff are billing, metering
and inspection, and off-site billing and collection offices, which consist of several units:
Two units of Mobile COMAPA and the Juárez, Periférico and Airport offices. The
creation of the Recovery of Past-Due Accounts area is worth noting as a mechanism to
address the problem of delinquent accounts.
The Financial Division is divided into only two coordination areas: income and
expenses, and accounting, which basically deals with the financial issues of the utility.
The Technical Operations Division can be considered the most important based
on its responsibilities and staff size. It is made up of eight coordination areas: (1) water
distribution, (2) infrastructure development, (3) wastewater, (4) engineering and projects,
37
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
(5) electromechanical maintenance, (6) International Clean Water Project (PIAP),15 (7)
water quality and (8) works supervision and bidding.
The utility in this city has union and non-union employees. The unions are divided
into three types: COMAPA, plumbers and day laborers. The first covers 206 employees
from all three divisions; the second covers 198 employees and the third, 213, most of
who are assigned to the Technical Division. It’s a fact that this situation makes
organization and decision-making difficult, as was noted by the managers who were
interviewed.
Lastly, in Ciudad Acuña, the SIMAS director is a systems engineer who graduated
from the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM). He has
held this post for six years and also served as interim mayor for six months in 2007. With
his professional background he has been able to implement a process to modernize and
automate water distribution.
Given the size and characteristics of the city, SIMAS-Acuña is proportionally
smaller than the utilities in Nuevo Laredo and Reynosa.
As in the preceding cases, the board of directors occupies the top level in the
organizational chart, followed by the general manager, who oversees the departments of
finance, purchasing, systems, and systems advisor. The Personnel Department also
reports to management.
In this case there are only three sub-divisions: (1) the technical area, (2) the
commercial area, and (3) wastewater treatment. The commercial area is responsible for
15
Spanish acronym
38
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
collections, contracts, clarifications, security, cutoffs and reconnections, meter reading,
and billing; all issues related to customer service, even though there is no department by
that name. The technical area is responsible for the water treatment plants.
Two observations can be made based on the experience of SIMAS-Acuña. First is
the importance of the automation process implemented by the current manager to
supervise plant operations electronically. The system was developed by the manager
himself and has helped to improve efficiencies in the use of time and human resources,
which are now allocated to other activities.
The second item worth noting is the concession of the treatment plant to a private
company, which is responsible for carrying out an often costly process for utility
management. This concession was granted several years ago and has worked without any
problem. Moreover, it has not changed, even with the political comings and goings in the
municipal government. This experience demonstrates one of the many options available
for local water management.16
In Acuña there is also a union in the water utility with which the manager and the
members of the board of directors have negotiated different agreements.
Finally, it is worth noting the manner in which the different utilities implement
their Water Culture Program, which is coordinated at the state level. In Nuevo Laredo,
this area answers directly to the Manager and is supervised by the head of the Training
Department. In Reynosa, a coordination area was recently created to address this issue.
The coordination area for the Water Culture Program reports directly to the manager of
16
During the visit to this plant we were able to verify the efficiency of plant operations with a small staff
and the right facilities.
39
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
COMAPA. In Acuña, the program is carried out by one of the engineers that handles one
of the water treatment plants.
As you can see, each utility has a very different perception of this issue, with
differential treatment in funding and in the degree of importance it is given. This could be
the topic of a future research project, since it is activities related to water culture that
would bring about changes in the users' perception of this resource.
The cases in the United States
The main difference between the water utilities in the border cities studied in Mexico and
in the United States lies in the level of professionalization in the latter. In the U.S. water
utilities, personnel hiring mechanisms are public and open, since existing openings are
published. Thus, anyone who feels qualified may apply for the position. Promotion
mechanisms are the same way and are based on employee experience, courses taken, and
available openings to which they may be promoted. In these cities, there are no utilitylevel unions; there is only one union at the city level.
When there is a change of administration in these cities, the only staff changes
occur at the general manger level; the remaining staff remains the same.
The local government has a personnel department, which is in charge of finding a
candidate who meets the job description of the opening. The selection process is carried
out through interviews, a medical exam of the candidate (which in some cases includes
testing for illegal drugs) and a criminal background check.
40
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
In the specific case of water department employees, special certification and
certain licenses to operate equipment is required.17 Most importantly, the educational
level is high, ranging from high school diplomas to postgraduate degrees. Experience is
also taken into account, in terms of years and the minimum number of hours needed to
qualify for a position.
In Laredo, the director of the water utility is an engineer with private-sector
experience in the materials and accessories necessary for water service. He heads the
utility after the local government’s experience with the concession of service to a private
company (United Water), at the invitation of the city manager and with the support of
some Council members.
The director of the utility oversees the engineering manager, the business
manager,18 the utilities operation manager, and the water conservation planner.
The Operations Department has several treatment plant superintendents who are
responsible for distribution and construction, treatment, pollution control and wastewater
collection and treatment. Beginning with this administration, superintendents have an
important place in the process. In addition, there is a department that focuses exclusively
on pollution control.
The Laredo water utility has 244 employees, the majority with technical
backgrounds. The staff of the Wastewater Treatment Division is highly qualified, since
most employees have a high school diploma or some college coursework; similarly,
17
The section on water quality management outlines the requirements and type of training that water and
wastewater treatment plant employees receive.
18
This position was vacant when the fieldwork was conducted between March and April 2008.
41
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
nearly all are certified with several types of operator's licenses, from A through D. In
addition, nearly the entire staff has a class ―C‖ driver's license.
At the McAllen utility, the general manager of the area in charge of water
management is an engineer with a technical background.
The first level of the organizational chart are the residents—general inhabitants of
the city. Next is the ―Utility Board of Trustees,‖ which is the citizen committee
responsible for supervising the provision of the service.19 This committee is made up of
five people.
The departments that make up this division are as follows:

Water utility engineer

Wastewater utility engineer

Finance

Water systems

Wastewater systems
It should be noted that, while nearly all of the managers of these departments have a
professional background. In some cases promotions have been made based on experience
and the certifications obtained (in water systems, for example).
The process of providing and charging for water services in McAllen is divided
into two types of users: residential and commercial. Each has a different rate and
different cost of services.
19
The functions of this body are discussed below.
42
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
In McAllen, as in other Texas cities, services may be paid for in several ways: at
the collection office, electronically, by telephone and at grocery stores. Although the
collection rate is very high, a percentage of customers fail to pay for various reasons.
Lastly, Del Rio has five city departments: the police, fire, finance, engineering,
and human resources. At the top of the organizational chart are city residents, followed
by the mayor and the city council, which oversee the city attorney, the city clerk, and the
municipal court of justice.
The city manager is responsible for the departments in the city, including the
financial and public services areas. As in other U.S. cities, the city manager is responsible
for preparing the budget and submitting it to the city council, as well as for proposing
different rules for the management of the city, which are subsequently translated into
ordinances.
The City Engineering Department is responsible for several areas: the airport,
streets, and water and wastewater services. The area responsible for water consists of the
water production and distribution departments, as well as the wastewater collection and
treatment departments. There is also a department responsible for repairing and replacing
equipment.
It should be noted that the company Innovated Operation and Maintenance
Solutions (OMI) is in charge of the wastewater treatment plant, under a concession
arrangement.
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The process for selecting and training the employees of this department is similar
to the mechanisms followed in other Texas cities, which is by public notice, with
education and seniority taken into account for promotions.
Regarding the handling of complaints, each area has staff to handle customer
requests. There are offices and secretaries to receive calls. For every call received, a
report is generated and forwarded to staff in the field for follow-up.
At times, the reports originate in the office of the manager. A form is sent to the
corresponding department, which is charged with correcting the problem. The form
requests a detailed description of everything done to correct the problem, and finally the
manner in which the problem was resolved is evaluated.
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2.1.3. Transparency in Information
Mexican Cities
The issue of transparency and access to information is just beginning to be addressed in
Mexico. In 2002, a Public Information Access Act was issued and a series of related
provisions have been established that local governments must follow.
Nonetheless, in practice, local governments have made little progress in this area.
Evaluations conducted by community organizations, such as the International
City/County Management Association (ICMA) or by agencies themselves such as the
Mexican
Ministry
of
the
Comptrollership
and
Administrative
Development
(SECODAM), demonstrate that local governments in Mexico are just beginning to
address this issue.
By law, water utilities are required to post information about their services on
their webpages. A review of the utilities studied—SIMAS-Acuña, COMAPA-Nuevo
Laredo, and COMAPA-Reynosa—shows serious discrepancies in the type of information
presented, as well as in the way it is presented. The information is scattered, messages are
incomplete, and it is difficult for ordinary citizens to access the information. Of these
three utilities, Acuña presents the least amount of information, with only a few basic
sections.
We grouped the contents of the webpages into several categories: messages to
users, general information about the utility, contact information, water culture, and
technical information.
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For example, the manner in which these utilities communicate with users is worth
noting. In Acuña, office hours, customer service, places where payment may be made,
discounts, and fees are provided. The name, position, e-mail address, and telephone and
fax number of each official are also indicated.
On the webpage of COMAPA-Nuevo Laredo the telephone number of the
switchboard and the extensions of each officer are available. In addition, there is an email address for electronic communication.
The webpage of COMAPA-Reynosa provides the names, positions, e-mail
addresses and extensions of both directors and mid-level managers.
The manner in which water culture is addressed also merits attention. The
SIMAS-Acuña webpage barely mentions it. On the COMAPA-Reynosa webpage, the
information is scattered and is included as one of the utility’s immediate action strategies.
COMAPA-Nuevo Laredo has a Comapín site,20 which includes information for children
and interactive games.
The type of technical information provided also varies.
Information on salaries is only addressed by SIMAS-Acuña; however, it provides
the laws and regulations that apply to water.
COMAPA-Nuevo Laredo provides technical information, including data on water
quality and works constructed, as well as offers virtual tours of the plants. Moreover, it is
the only page that provides information on the different classes of rates: residential,
commercial, and industrial.
20
Comapin is the name of the COMAPA emblem for its water conservation program, ―Cultura del agua.‖
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It is also worth highlighting that the COMAPA-Nuevo Laredo webpage contains a
specific section on access to information (Public Information Access Unit) with a
complaint box and contact link.
For COMAPA-Reynosa, the technical section includes data on infrastructure,
such as sewer lines and the wastewater collection and treatment system. There is no
information on user fees, but there is an explanation on how the water meter works and
the contents of the water bill.
It is worth pointing out that none of the web sites of the Mexican water utilities
provide information on the board of directors, which is their governing board.
Other forms of communication with users are mainly located under the water
culture program of each utility, which operates differently in each case.
It should be noted that Reynosa holds public hearings, to which the general
manager of COMAPA is invited. Moreover, a coordination area for mediation between
customers and the utility, known by its acronym CIAC, has recently been set up. To date,
this coordination area has reported a large number of complaints that have been
addressed and solved. This is an interesting initiative not used by the other utilities;
however, since it has been in operation only a short time, its impact cannot yet be
evaluated.
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U.S. Water Utilities
The webpages of these utilities stand out for the large amount of information they make
available via Internet. Using the same categories as for Mexican cities, we find the
following data.
With respect to general information about the utility, the webpage of the Laredo
utility has information on customer service and office hours. The webpage of the
McAllen utility has some technical data, an organizational chart of the board, and
complete contact information for employees, including name, position, telephone, fax,
and extension numbers. The Del Rio utility provides contact information with mailing
addresses, e-mail addresses, telephone and fax numbers, and office hours.
It is worth noting that the webpages of all three utilities offer the same type of
contact information: Telephone, fax and e-mail.
A section that we called "user information" contains the financial reports provided
by the cities.
On the webpage of the Laredo utility we found annual reports (although they were
not updated to 2007), as well as budgets, consumption ranges, costs, and the code of
ordinances. On the webpage of the McAllen utility, water quality reports for 2001
through 2006 are posted, as well as the code of ordinances. The Del Rio utility provides
data on the water treatment plant and contact information.
In the category of "customer service," Laredo offers different ways of paying for
service: by mail, at the Tax Department, at pay stations, by night deposit box, by phone
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with a credit or debit card, or by electronic funds transfer. The locations of the authorized
pay stations are posted, as well as emergency services and account and billing methods.
The webpage of the McAllen utility indicates payment methods and hours of
operation, as well as service rates and fees. Some forms may be printed and past and
current bills may be viewed, along with the customer's payment and consumption history.
Lastly, on the webpage of the Del Rio utility, payment may be made by credit
card and complaints about service failures may be sent on-line.
With respect to what we called "technical information," contents varied.
The Laredo water utility posts information about a water conservation program
and the way it treats wastewater. The McAllen utility provides more information,
including advice for conserving water and several technical projects. The Del Rio
webpage explains the membrane filtration process and other forms of water treatment.
This section also provides some water saving tips.
It should be noted that the Laredo and McAllen webpages contain information on
city council meetings and access to meeting agendas and minutes. In the case of
McAllen, it is also possible to access the minutes of the Special Water Committee
meetings.
In the U.S. cities studied, city council meetings are broadcast on television,
although there are no statistics on the number of viewers.21
21
A detailed description of the contents of the webpage of each U.S. city studied is provided in Annex
2.1.5.
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2.1.4. Public Participation Mechanism
Public participation has become a key issue in municipal public policy. In Mexico there
is currently a series of programs that operate based on the opinion of the beneficiaries
obtained through public consultation mechanisms and the use of various tools.
One of most widely accepted meanings of this participation refers to ways in
which citizens and citizen organizations are included in the decision-making processes
representing special (not individual) interests. Some of these participation tools are:

Public consultation

Policy-making tools

Tools for designing, implementing and monitoring public policy (ibid, p. 48).
By law water utilities on both sides of the border have boards of directors or
representative forms of governance that express the opinion of the residents on public
policy decisions.
In the U.S. cities studied, these boards operate in two ways. In the case of Laredo,
these forms of participation extend to the political arena, since representatives elected by
popular vote make decisions regarding public services, including water.
In McAllen and Del Rio, there are boards composed of district and city
representatives elected by the residents, as well as committees formed with citizen
representation that play an advisory role in decisions concerning water issues.
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Public Participation in Mexico
The Tamaulipas state water law establishes the obligation to create a board of directors to
oversee the work of the municipal water utilities (COMAPA’s). These boards are
composed of state and municipal officials and, until recently, members of the town
council. Similarly, representatives from the private sector and the general public of these
cities participate.
By law, the members of this board are:
1. The mayor
2. Two representatives of the municipal advisory council
3. A district deputy, appointed by the state congress
4. A representative of the Tamaulipas Ministry of Urban Development and
Environment
5. A representative of the Ministry of Health
6. A representative of the Committee for Municipal Planning and Development
7. A representative of the Tamaulipas Ministry of Social Development
8. A representative of the National Water Commission (CNA)
This board of directors has a chairman (the mayor), a secretary and a treasurer; the
remaining members are regular members. The board has the following powers:
1. To approve work programs, budgets, balance sheets, rate studies, and other
activities for which the utility is responsible.
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2. To approve and sanction acts of ownership carried out in the name and on behalf
of the utility.
3.
To grant power-of-attorney to the general manager for acts of ownership.
4. To approve the waiving of actions or rights under its jurisdiction for the purpose
of carrying out its mission.
5. To conduct audits and reviews of the utility when deemed advisable.
6. To issue internal regulations encouraging the establishment of a system to
professionalize its civil servants, that must be published in the official state
gazette by the Office of the Governor.
7. To establish standards, policies and guidelines pursuant to which the water and
wastewater systems under its supervision are to be operated, managed,
constructed and maintained.
8. To authorize, as appropriate, extraordinary expenditures of the utility under its
supervision.
9. Other powers necessary for the optimum fulfillment of the purposes of the utility.
The law establishes that the decisions of the board are to be made by majority vote, and
the chair has the deciding vote in the event of a tie. The law also states that for a legal
quorum, half of its members plus one must be present.
In addition, the board of directors shall meet at least once a month. The secretary
records the minutes of the meetings in the books designated for that purpose. The
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members of the board may also request special meetings, and the chair shall convene
such meetings within no more than three business days.
If this law is observed, the board of directors has the broadest powers in the water
utilities, since they are responsible, among other actions, for complying with and
executing the resolutions of the board of directors. Likewise, by law, the utilities must
submit a quarterly activity report to the board.
The water utilities in Reynosa and Nuevo Laredo currently have boards of
directors formed with the representatives required by law. In addition, the general public
is covered in Nuevo Laredo by a representative from the Council of Institutions in that
city and the chairs of the Association of Architects and the Association of Civil
Engineers. In Reynosa, the general public is represented by the chairpersons for the
Chamber of the Construction Industry and for the Association of Engineers.
In Acuña, Coahuila state law states that this board be composed of the mayor and
the board members indicated in the decree creating SIMAS, which shall be no less than
five and no more than fifteen. The board members shall represent the organizations of the
public, private and social sectors, as set forth in the decree creating the utility. This is an
honorary position. The appointment of any board member by a sector may be revoked by
that same sector at any time, and a new appointment may be made. The members of the
board shall have an alternate, appointed by the organization that they represent.
This board is authorized to appoint the general manager (from a short list
proposed by the chair); likewise, the board is authorized to dismiss the general manager.
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Local and Financial Water Management for Urban Use in
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The board shall appoint a secretary and hold at least one regular meeting a month
and as many special meetings as necessary. For a quorum, half of its members plus one
must be present. In the event the chair is absent, a member will be designated from
among those present at the meeting. The minutes of the meeting shall be recorded in a
minute book designated for that purpose.
The powers and duties of the board are:
1. To establish the general directives for the proper operation of the system
2. To approve the annual system operations program
3. To review and approve the annual expense budget and the revenue estimate for
the coming year
4. To review and approve the user fee proposals for the services provided by the
utility
5. To grant the general manager of the utility, or other persons, general powers-ofattorney and special powers-of-attorney for litigation and collections and acts of
administration
6. To impose sanctions for violations in accordance with established provisions
7. To approve and issue the Internal Regulations of the utility
8. To appoint the general manager of the municipal utility from a short list proposed
by the chair
9. To submit an annual report to the town council on the activities of the municipal
utility
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In Ciudad Acuña, the current members of the board of directors of SIMAS are the
mayor, two council women, the state and municipal officials designated by law, as well
as members of the general public, such as the president of the Chamber of Tourism for
the city. This position is honorary and members do not receive any salary or
compensation for their participation.
In all three cities, representatives of the general public were included through an
invitation to the respective organizations, which proposed their candidates.
All of these boards function in the same way. A notice with the agenda and the
minutes of the previous session is sent to the board members. If a technical or financial
issue is to be discussed, the necessary information is also sent to the board members.
Meetings are held monthly and in all cases are private. Non-board members are
not allowed to attend. Minutes are issued for each meeting, which are filed by the
secretary of the board and are not available for public consultation.
In Reynosa, the member representing the National Chamber of the Construction
Industry22 indicated that this organization has traditionally formed part of the board in
other cities in the state, such as Tampico and Nuevo Laredo.
This organization represents a key stakeholder in the city and, according to its
director, enjoys a great deal of credibility in the city and even its relationship with the
current manager of COMAPA is very close.23
22
This chamber is composed of the sectors related to the construction industry: consultants, firms, legal
counsels, associations, labor, unions—in other words, the entire production line involved in the
construction industry. The CNIC has more than 120 members in the city.
23
A training agreement is being sought between the chamber and the chair to train people involved in
construction and teach courses.
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Local and Financial Water Management for Urban Use in
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The issues addressed to date include the investment for a well study and the loan
made to the utility. Another issue discussed is the presentation of the recently formed
CIAC and the number of complaints handled by this new coordination area. Moreover,
water conservation and the actions needed to be taken in this regard have been
addressed.24
The main problems detected in the city by this utility include the scarcity of water
and unfinished construction works left by the previous administration.
In Nuevo Laredo, the members of the board of directors of COMAPA
representing the general public are the presidents for the Association of Architects and
the Association of Engineers. The Secretary25 is currently the president of the Civic
Council of Institutions.26
The items addressed to date at the board meetings are the possibility of obtaining
loans for the city and the need to be more efficient in collecting water fees.
The problems detected in the city are sanitary sewers and storm sewers that have
collapsed due to age. It is worth noting that the Council of Institutions formed a
committee to discuss the issue of water in the city.
24
It should be noted that this board was formed in January 2008, and therefore only a few meetings have
been held to date. There is information to the effect that in the previous administration this board, which is
prescribed by law, did not work.
25
The current chair of the Council of Institutions was the president of District Agricultural Board No. 154
for three years.
26
This organization is formed by the city's productive agencies. It has a meeting hall where it meets once a
month in public and in private. The organization is supported by contributions from its members. To date,
34 organizations of various types are affiliated with this board. Their purpose is to promote progress in the
city. The Council of Institutions was formed in Nuevo Laredo more than 40 years ago.
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People often approach board members to request their support, mainly with
respect to water charges that they consider to be excessive. However, to date the board’s
stance has been to refer these people to the discount programs offered by COMAPA.
Another issue is the situation of the agricultural users who have a certain volume
of water to use and who need to be made aware of the most appropriate hours for
irrigation.
In Nuevo Laredo, an incipient network of organizations and individuals who work
on water issues was detected. There is a close relationship between the Council of
Institutions, COMAPA and IBWC, whose representatives meet formally and informally.
Another issue that must be discussed is the Water Culture Program. Its work in
the city has been notable and, according to the secretary of the board of directors of
COMAPA, it needs to be disseminated.
One final point requiring comment is that the NGO, Centro Internacional de
Estudios del Río Bravo A.C., plays an important role in Nuevo Laredo. Founded in 1992,
its main purpose is to keep the Rio Grande clean. To that end, it regularly invites schools,
companies, the municipal government and others to participate in cleanup brigades along
the Rio Grande.27
In Ciudad Acuña, the members of the board of directors representing the general
public include the vice-president of the city’s Chamber of Commerce. The members of
this organization generally believe that the purpose of the board is to verify that SIMASAcuña performs its job according to the established standards.
27
The head of this organization is David Negrete, the IBWC representative in Nuevo Laredo.
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The topics addressed at the board meetings include the hiring of employees,
salaries, plant and equipment maintenance, and the investments required for the system.
One issue that should be highlighted is that this board has been involved in the general
work conditions of the labor union that provides service to the utility.
Unlike Reynosa and Nuevo Laredo, in Ciudad Acuña the board was formed
several years ago, and some of its members have held their positions for several terms.
No new members have been appointed to this board.
Among the most controversial issues addressed are budget reviews and frequent
complaints from those who feel that the water fees are excessive.
In Acuña, being a member of the board of directors is a mark of prestige in the
community. SIMAS-Acuña is considered an important entity in the city, and its members
are so well-known that local residents approach them to present their problems, rather
than going to the general manager.
Some former officials and politicians in the municipality have sat on the board,
giving them a certain degree of experience for the job. For example, a commission has
been formed with representatives from the Acuña chapters of the National Chamber of
Commerce (CANACO) and the National Chamber of the Manufacturing Industry
(CANACINTRA), as well as from the maquiladora industry, who are conducting an
analysis of the commercial area of SIMAS-Acuña in order to make it more efficient,
which would translate into greater benefits and more timely collections.
While these boards are made up of citizens and members of the general public in
the cities, several questions need to be asked regarding the boards in Mexico.
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First, there is a need to review the notice mechanisms, which are not clear in these
cases. Even though there are regulations in place, there is no provision for inviting
members of the general public to join this organization.
Related to the foregoing matter is the level of professional background that board
members should have, given that, as we have seen, important decisions requiring
technical and financial know-how rest in their hands.
A broader review of the relationship between these boards and the members of the
town councils should be conducted, since the latter is authorized to establish regulations
and has more direct contact with residents of the municipality.
In all three cases, there is a need to review the way in which information about the
utilities and the decisions they make is transmitted to the rest of the citizens, whether or
not they are affiliated with an institution.
Lastly, there is a need to reflect on the transparency of the actions taken by these
boards, since the minutes and documents generated by them are not made available to the
general public.
City Councils and Citizen Committees in the U.S. Cities
In the U.S. cities studied, the local government is run by the city councils, together with
the mayor. Council members are elected to office, some as district representatives and
others as citywide representatives. The law allows independent candidates with no party
affiliation to run for this office. Council members are elected for four-year terms and may
be reelected.
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As part of the government, these politicians are responsible for approving the
budget, as well as appointing the city manager. Likewise, as representatives of the
people, they are called upon to deal with the various demands of the citizens. Complaints
about the provision of public services, urban infrastructure, new construction, and
specific demands from environmentalists are some of the issues addressed by city council
members.
Generally meetings are held twice a month in the afternoon, with the agenda
distributed beforehand. These meetings are nearly always broadcast on local television
and, in the case of McAllen, videos of the meetings can be found on the Internet.
The meetings are always public and anyone who wishes may attend. In some
cases attendees are allowed to express their opinion during the meeting, always being
respectful of the other attendees.
As in the case of Mexican town councils, U.S. town councils attract different
community leaders who, after following a career outside of government, run for office.
There have also been cases where a council member later runs for mayor.
In Laredo, the members of the town council have handled controversial issues
such as opposition from an environmental group over the establishment of a company at a
storm drainage pond. Another controversial topic addressed is the new organization of
the water services after a private company had assumed responsibility for this
concession.28
28
The council member interviewed expressed dissatisfaction with the results of this concession, which has
lowered service quality as well as provoked disputes with employees who had decided to remain with the
company.
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These city councils are authorized to form citizens committees to serve as
advisory panels on utility services. In Laredo the formation of this committee has not
been deemed necessary, but in McAllen and Del Rio, in addition to the city council, there
are groups devoted to analysis, especially of utilities or other government activities.
In McAllen, the members of the water and school committees are elected;
however, others are formed by invitation. These committees follow several rules: their
meetings are closed sessions and may only be held in the place designated for that
purpose; no more than two members may meet outside the office; and they are given 72hour notice of the issues to be addressed.
These are honorary positions for which no salary is paid other than a small stipend
to cover the expenses involved in attending meetings.29 However, the committee
members are residents who want to be involved: community leaders, teachers and smallbusiness owners.
In Del Rio, this committee is composed of the mayor, one council member, and
three invited citizens, two of whose terms end in 2008 and the other in 2012.
In the case of the Utilities Committee in Del Rio, the representative of the city
council worked more than 30 years for IBWC. The other members are local teachers.
When there is a proposal, it is first submitted to the committee members for
discussion and analysis before it is discussed by the council. In the view of its members,
this committee is highly useful, since it helps the council make decisions.
29
The videos and minutes of the meetings may be viewed on McAllen's webpage.
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However, there have also been cases where the committee's proposals are
rejected, such as when a study was requested to determine the source of the spring water
that supplies the city. The study was rejected because of the high cost.
These committee members are also approached by neighbors who wish to make
requests or lodge complaints, such as questions about water rates or complaints about the
poor service provided by the garbage company that operates under a concession.
Committee meetings are normally attended by the city manager, who always
keeps abreast of the discussions held and conveys committee opinions to the respective
city departments.
The fieldwork information shows that in the U.S. cities studied there are two
levels of participation: one which is really political provided through the city council, and
one that more specifically incorporates the opinions of citizens expressed through these
committees. This is clearly different from the experience in Mexico and requires more
detailed study to verify their scope and the effective incorporation of citizens into water
utilities decision-making processes.
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2.2. Financial Management of Water Services
This section analyzes the administrative practices of Water Utilities (WU) for funding the
operation, maintenance and administrative costs of water and wastewater services in the
cities studied. Adequate financial management of water services must include
mechanisms for funding renovations, infrastructure and equipment replacement, and
future investments to cover projected needs for service expansion (capital increase).
Sustainable financial management also entails fortifying medium- and long-term
financial planning by developing five- or even 20-year plans (Lafferty and Bauer, 2005).
In practice, adequate financial management includes: strategic business planning
for medium- and long-term financial needs; some degree of autonomy, such as in
determining the rate structure and level of indebtedness; and developing and reporting
financial indicators to assess the utility’s financial sustainability. This study focuses on
three fundamental elements of financial sustainability for water utilities: strategic
business planning; analysis of some basic financial indicators and collection efficiency of
the utilities (percentage of users really paying for services). The latter is important in
assessing whether the plan to cover costs with the selected rate structure is really viable.
The last section summarizes the distinct characteristics of the cities studied in terms of
financial feasibility.
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2.2.1. Strategic Business Planning for Water Services
Developing a financial plan is the key to improving the financial situation of water
utilities, and thus their operation. In general, developing a financial plan refers to
determining the appropriate balance of cash flows in order to achieve the objectives of
the utility while complying with its established financial policies.
Mexican Cities
Mexican water utilities generally have a short-term income and expense plan (annual and
monthly). The annual budget is submitted for approval during the last two months of the
year and discussed by the Board of Directors. Long-range planning is limited by the term
of municipal administrations (typically three years). This fact shows how heavily
Mexican utilities still rely on municipal administrations, which restricts strategic business
planning.
Another distinct characteristic of the Mexican utilities studied is that financial
decisions are still mostly made by the general manager. This centralized form of
decision-making makes it difficult to define the responsibilities of the financial officers in
planning sound finances. They are reduced to managing revenue from services, monthly
expense planning and administering funds from federal programs. In the words of one of
the officers interviewed, the financial areas function only as ―payment processers.‖ In
addition, both Coahuila and Tamaulipas (the states where the Mexican cities studied are
located) audit the water utilities every quarter, and each utility is supervised by a
comptroller, as shown in their organizational charts.
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The three main sources of funding for Mexican utilities are the local, state and
federal governments through their different programs. The most important federal
programs are Programa de Devolución de Derechos (PRODDER) and the Programa de
Agua Potable, Alcantarillado y Saneamiento en Zonas Urbanas (APAZU). In general,
PRODDER consists of quarterly refunds of the water rights collected from the water
utilities provided that they are applied towards projects aimed at increasing efficiency or
improving infrastructure, as set forth in a plan of action. APAZU provides federal
financial support to increase coverage and improve physical and commercial efficiency,
and requires matching funds from the state and/or municipality.
One important aspect of APAZU is that since 2008 a scoring system is applied to
the water utilities in order to determine the level of priority for funding for each one. The
scoring system is based on the type of actions proposed for improving physical and
commercial efficiency indicators (the amount of water produced that is actually billed
and collected), and points are assigned by the state officials responsible for planning.
This measure forces utilities to allocate more resources to improving efficiency.
The Mexican federal development bank, Banco Nacional de Obras y Servicios
Públicos (BANOBRAS), provides loans to finance water infrastructure for Mexican
municipalities and utilities through their sector program for water and wastewater.
BANOBRAS sets a Total Borrowing Limit of 15% of total municipal revenue if the
municipality has detailed and current financial information, or 10% if available
information is not detailed or current.
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In general, no strategic financial planning is performed by the utilities in the
Mexican cities studied. They have only recently developed operating plans or needs
assessments of their wastewater and/or water systems as a requirement for seeking
binational funding from NADB. In Ciudad Acuña, SIMAS-Acuña’s operational planning
is based on a needs assessment of the city’s water situation carried out in 2001. The
document, which is used as a master plan, is in the process of being updated. As part of
the study, population growth was projected through 2021.
SIMAS-Acuña can adequately finance its operations and corrective maintenance
needs. However, the financial area does not plan for the rehabilitation or replacement of
infrastructure. Long-term planning lies with the manager and is approved by the Board of
Directors. However, in 2007 more than two million pesos were invested in rehabilitating
and installing water and sewer lines. According to SIMAS’ 2008 Annual Infrastructure
Renovation and Maintenance Plan, more than 16 million pesos will be invested this year.
SIMAS-Acuña’s expenditures depend on the cash flow from the daily revenue
obtained directly from service payments. Infrastructure works are financed with funding
from NADB and the federal government (PRODDER). One strategy for achieving more
autonomy with respect to the municipality has consisted in reducing funding from this
source to a minimum. Federal funding is obtained quarterly through the PRODDER
refund program. The improvement programs proposed to obtain this funding are focused
on equipment and metering. SIMAS-Acuña does not receive financial support from the
state government.
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The debt service on the BANOBRAS loan that financed Acuña’s second
Treatment Plant is paid promptly from its own resources. SIMAS’ experience with
BANOBRAS as a source of financing is not considered good, because upon evaluation its
sole advantage lies in its acceptance of water infrastructure projects; however, it does not
offer favorable interest rates. A key event for SIMAS-Acuña occurred in 1997 when it
obtained funding for the construction of one of its treatment plants from a private
company. The treated water is sold to the Mexican federal electricity commission,
Comisión Federal de Electricidad (CFE). However, because of an agreement between the
municipality and the state government, the revenue from the sale of the water does not go
to SIMAS, but to the state government. This decision prevents SIMAS from using the
revenue generated by the sale of the water.
In Nuevo Laredo, COMAPA-Nuevo Laredo has an estimate of the cost to
improve the system generated by needs assessments of the water and wastewater systems
funded by NADB in 2001 and 2002 (―Wastewater System: Diagnosis, Modeling and
Expansion Report for Nuevo Laredo, Tamaulipas, Mexico,‖ 2001 and ―Water System in
Nuevo Laredo, Tamaulipas: Needs Assessment, Modeling and Expansion Report,‖ 2002).
These needs assessments are used as the basis for planning and are updated every six
months; however, planning is affected by urgent infrastructure problems which cause
delays in the implementation of scheduled projects. The needs assessments indicate
infrastructure growth from 2002 to 2020 based on city growth, although actual growth
has been slightly different; for example, the city was projected to grow to the south, but
instead grew more toward the northwest than expected. Nevertheless, the plan contains
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specific actions such as sewer mains that need to be replaced after being in service for
more than 50 years. However, there is no spending plan for rehabilitating infrastructure
or expanding the system. Planning in Nuevo Laredo is triennial, in sync with the term of
the municipal administration; the current term is 2008-2010.
COMAPA-Nuevo Laredo finances its infrastructure expenses (e.g. new treatment
plants) with binational funding from NADB, complemented by municipal and state
funds. COMAPA-Nuevo Laredo has obtained a $20 million-dollar investment and a $5.7
million-dollar loan from NADB. Another significant source of funding is the APAZU
program. Its 2008 proposal was for more than $500 million pesos. Some of the largest
projects are the rehabilitation of sewer mains and the installation of sewer lines.
COMAPA-Nuevo Laredo pays approximately three million pesos a quarter in water
rights, which is refunded by the federal government through the PRODDER program on
the condition that such funds are used to fund infrastructure works. In 2005, the Nuevo
Laredo water treatment plant was modernized through the PRODDER program. Both
APAZU and PRODDER require that proposed investment programs be endorsed and
signed by the federal and state governments. One strategy used to provide the matching
funds required by programs such as APAZU is to use the investments in infrastructure
made by developers—which are required as part of the feasibility process—to expand the
system into areas without service. Unfortunately, this strategy can produce a certain
amount of dependency on developers. Since 2000, COMAPA-Nuevo Laredo has also had
a loan from BANOBRAS for nearly 24 million pesos with a term of 12 years.
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In April 2008 COMAPA-Reynosa, according to its Board members, was
undergoing a phase of financial reorganization in an attempt to control (slow) spending.
Operationally the situation was not good either; as of January 2008 water supply losses
were estimated at 11.4 million gallons/day which is equivalent to 25% of total installed
capacity. Records also showed a considerable number of leaks and no equipment
maintenance. Regarding financial planning, COMAPA-Reynosa produces an annual
income and expense budget. Revenue is basically projected based on revenue data from
the previous year (trying to improve the collection efficiency ratio).
Reynosa has a plan developed in 1994 that defines stages in the city’s growth;
however, these growth projections are no longer in line with the actual growth defined by
developers. While the plan projected growth on the east side of the city, it has grown
more towards the west, where the construction of a water treatment plant is now being
considered. There is no up-to-date master plan. COMAPA-Reynosa is planning works
such as the construction of two water treatment plants and eight elevated storage tanks in
different parts of the city (mostly on the west side of the city which has registered the
greatest growth), as well as the drilling of wells. Specifically, there are plans to expand
the capacity of the Pastor Lozano Water Treatment Plant with a new disinfection system
(MIOX), which will increase capacity by 9.14 million gallons/day; complete the Rancho
Grande II Water Treatment Plant to the northwest of the city with capacity for 5.7 million
gallons/day; and construct a 5.7 million gallons/day module in the Benito Juarez Water
Treatment Plant, which would complete the whole project.
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With respect to wastewater, the two treatment plants currently under construction
were reviewed. Altogether investment requirements are estimated at approximately 724
million pesos. The main sources of funding for these infrastructure projects will be the
Tamaulipas state government, the federal government, NADB and, to a very small
degree, the utility itself.
As for maintenance, infrastructure is generally repaired or replaced only when
there is an emergency, usually leaks in the lines. The management of COMAPA-Reynosa
estimates that revenue from water, wastewater and special contracts comes to about $25
million pesos a month, while overhead expenses are approximately $20 million a month.
One of the objectives of the current manager is to increase revenue to $30 million pesos a
month. The utility’s main strategy for attempting to increase revenue is to improve billing
and collections of large-volume customers (usually commercial and industrial users). In
addition, it is implementing a metering program for delinquent residential customers and
service cut-offs to improve collections from past-due accounts. Another strategy under
consideration as a source of infrastructure funding is to require infrastructure works from
developers of new subdivisions. In fact, significant revenue was reported in 2007 from
water availability rights and special contracts for payments pertaining to new
developments. Part of the policy to increase revenue consists of offering these special
contracts to developers.
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U.S. Cities
In Texas, the water utilities studied partially incorporate the principals of strategic
planning, but only recently. Based on the comments of those interviewed, one factor that
makes planning difficult is the high growth rate of the population and the significant
increase in urban development that this implies, particularly in Laredo and McAllen.
Another important aspect of the financial planning process of the utilities is that they are
generally part of the city’s Public Works Department. Paradoxically, although this
arrangement would seemingly lessen the independence of the utility, in practice it
facilitates financial planning since the utility has the direct financial backing of the city
and, in particular, forms part of the local finance plan.
In general, the annual financial plans of Texas utilities include two main
categories: water and wastewater. Different accounts or funds are handled under each
concept (for example, operating fund, construction fund and water availability fund).
Each fund is divided into different items. The three main sources of revenue are: water
services, wastewater services and water availability rights for developers.
Expense projections for planned infrastructure works are made easier by the
definition of financial plans which specify five-year projects and normally cover 5 to 10year planning periods. Legislation in Texas requires that utilities have five-year capital
improvement plans. However, of the three cities studied, only McAllen has a defined
Improvement Plan, even though it forms part of the global plan for the city. Both Laredo
and Del Rio are working on defining a five-year plan.
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U.S. cities, unlike Mexican cities, have the option of obtaining financing through
the bonds market as a means of raising external funds for preventive maintenance,
infrastructure improvement and system expansion. Borrowing capacity is defined by
rating agencies, such as Standard & Poors, which assess the borrowing capacity of the
city, not just the water utility. This is an advantage for the finances of utilities.
Although ideally utilities should have, at a minimum, a 10-year plan, McAllen
Public Utilities (MPU) was the only utility studied to have a financial plan in 2008, even
though in this case it was part of the city’s 2005-2025 financial plan (The Foresight
McAllen Plan). This plan projects the future population to 2025 under different scenarios
and shows the expansion needs of the water and wastewater systems. However, it is only
a general plan for the urban development of the city. Nevertheless, despite having no
Master Plan, MPU develops an annual preventive maintenance plan detailing monthly
maintenance works.
The sale of bonds is important for financing infrastructure works in McAllen.
MPU receives no funding from the TWDB. Some of the main projects of MPU are:
expansion of the North Wastewater Treatment Plant, from 8 to 14 million gallons per
day; and redesign and expansion of the North Water Treatment Plant from 8 to 12 million
gallons per day.
In Laredo, Texas, the Water Utilities Department (LWUD) is developing a fiveyear plan, the Comprehensive Water and Sewer Plan. The last plan the utility had was the
Wastewater Master Plan developed in 1996. LWUD plans to invest around $300 million
dollars over five years, in both water and wastewater projects. Its main infrastructure
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projects include: construction of a new water plant; expansion and rehabilitation of the
Jefferson Water Treatment Plant; construction of two new wastewater plants and
expansion of the current wastewater treatment plants.
Water distribution will be automated at the Jefferson Water Treatment Plant,
which is expected to reduce the number of broken pipes by 75% (up to 15 to 25 leaks are
reported daily). One possible explanation for the high number of leaks in Laredo is the
lack of adequate pressure control as a result of manual pump operation. Water losses in
the distribution system are estimated at 28%. Additionally, efforts are being made to
establish a conservation policy with an ordinance regulating outdoor watering on certain
days and at certain times (night) with the County Court applying fines from $20 dollars to
as high as $1,500 dollars.
Laredo is planning to increase its wastewater treatment capacity by 16.5 million
gallons over three years. To finance this investment the city calculates the amount of
revenue that must be generated from the current rates in order to pay for the bond issue
and then estimates the number of years that would be needed to pay for it from annual
earnings (less operation, administrative and maintenance costs). The sale of bonds is
limited to up to 10% of payment capacity or revenue (this limit usually applies to the
payment capacity of the city, not the utility). Projects to be funded with bonds include
various city projects, among them water infrastructure projects. Laredo received
substantial financial support in the form of a $6.2 million dollar grant for infrastructure in
22 colonias. Another source of funding is EPA through TWDB. In fact, LWUD is
developing a project for which it will seek $12 million in funding from EPA.
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One factor that facilitates system expansion planning is the small number of urban
developers demanding services and determining urban area growth. Moreover, if new
areas require development, the developer must cover part of the infrastructure costs,
install pipelines, etc. However, the municipal fees for new developments have not been
adjusted since 1994. In contrast, the cost of municipal water rights that LWUD pays per
acre-foot of water tripled from $720 to $2,250 dollars.
Del Rio has a very recent plan developed in 2007 (Comprehensive Master Plan).
Chapter 6 of this plan refers to infrastructure growth in the city, including infrastructure
for water services. According to the plan, pipelines should be replaced in 2008 at a cost
of about $100 million dollars.
One serious problem in Del Rio is the level of water losses in the system,
estimated at approximately 31%. Leaks in the distribution system bring it up to 37%.
Fifteen to 25 leaks are reported daily. This problem is partially due to aging pipelines (60
to 70 years old), as well as to the materials used to build them (metal or galvanized
pipes). These pipelines are being replaced with PVC pipes. Approximately 75% of the
installed pipelines are less than 6 inches wide, and in some cases just a half an inch wide.
The utility staff believes that more than 80% of the water distribution and wastewater
collection infrastructure is in poor condition and must be replaced. Pipeline replacement
is the most important short-term project for the city. It is estimated that approximately
150 miles of waterlines in the distribution system (70% of total) and 85% of the sewer
lines need to be replaced.
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According to the utility officers interviewed, some of the current problems are a
result of negligence in system maintenance. A financial crisis in 1993 led to a decision
not to invest in maintenance. Investment requirements for pipeline replacement entail a
rate adjustment.
The water and wastewater rate structure in Del Rio has not been
adjusted for the past four fiscal years (the last adjustment was made in fiscal year 20042005). To support long-term planning, the utility is considering modeling the water
distribution system to detect low pressure problems and leaks.
2.2.2. Financial Indicators
A growing trend in water utility assessment is to include performance indicators as a
means of promoting efficiency. As water utilities do not compete with other water
companies in the same city (which would not be feasible), this mechanism is intended to
mimic free competition among private companies. One argument in support of comparing
water utilities from different cities, and even countries, is that it would help them to
improve operations by comparing the performance of specific areas and tasks.
One of the difficulties of using this type of comparison (also known as
benchmarking), which is becoming increasingly accepted, is that every WU operates in a
different context; for example, each WU has access to different sources of water supply
(surface, underground), which define water quality and treatment costs; each city has a
different topography, which may allow water to be distributed by gravity or may require
the use of pumps; differences in the wage scale make it difficult to compare the level of
labor employed (e.g., number of workers per 1000 connections); different institutional
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context, differences in population size and population density, water consumption habits,
etc. However, some WU managers believe that technical indicators can be of some
practical use. In this section we try to estimate a sample of the financial indicators of the
utilities studied (see Tables 2.1 and 2.2 below).
It is important to note that the
availability of information, as well as the way in which the data is recorded in different
concepts, limit its analysis.
For Mexican Water Utilities
In the case of Mexican water utilities, the financial balances are accumulated to such an
extent that analyzing them is difficult. Expenses reported in the annual balance sheets of
Mexican water utilities for 2007 are grouped into very large categories. One of the most
important, given its amount and because it suggests part of the problems for the utilities,
is ―Personnel Services.‖ This category includes employee costs and benefits without
breaking them down into administrative, operational, etc. However, it is the official
format for financial information requested by the top auditor of the State of Tamaulipas.
In the annual income statements several categories can be broken down further. This was
true for Ciudad Acuña (the only city that posts its financial statements and audits on the
Internet) and Nuevo Laredo, but not for Reynosa.
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Table 2.1. Some Financial Indicators: Mexican Water Utilities, 2007
Indicator
SIMAS
Ciudad Acuña
COMAPA
Nuevo Laredo
COMAPA
Reynosa
Total annual income (excluding external
contributions)
59,800,896.27
241,488,022.00
290,623,745.60
External financing
26,182,977.30(1)
113,364,600.00(2)
341,000,709.00 (3)
(External financing/total income)*100
44%
47%
117%
(Total income /Total assets)*100
41%
36%
20%
Total annual operating income/total
annual operating costs
1.39
1.05
0.71
(Total liabilities/total assets)*100
22%
17%
19%
(Current liabilities/total income)*100
10%
20%
34%
(Personnel services/total annual
operating costs)*100
57%
53%
56%
(Electricity costs/annual operating costs)
*100
14%
13%
N/A
(1) Loans (liabilities) from Banobras ($6,536,044.89) and from NADB ($19,646,932.40).
(2) Contributions from NADB ($ 57,432,126.51), APAZU (44,400,549.09) and PRODDER
(3) Estimated amount taking into account funding from NADB for the Comprehensive Sanitation Project
for 2007 and the income line item ―for various services‖ that was not broken down in the income
statement.
Source: Developed by authors based on information provided by Mexican utilities.
Of the three Mexican utilities, SIMAS-Acuña presents the most stable financial situation
based on its indicators for 2007.
Even though SIMAS-Acuña, like most Mexican
utilities, resorts to external financing for infrastructure (equivalent to 44% of its annual
revenue), it is the only one of the three utilities studied that reported those funds as
liabilities, not income. This implies that SIMAS-Acuña takes into account the costs of the
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debt financing that it must pay, which reduces the reliance of a utility on subsidies from
external sources. In contrast, COMAPA-Reynosa is shown to rely heavily on external
funding sources, since the amount received from such sources is 17% higher than its
operating income.
Moreover, SIMAS-Acuña presents a better ratio of total assets to total net income,
compared to the other two Mexican utilities (41% vs. 36% and 20% for Nuevo Laredo
and Reynosa, respectively). An even clearer indicator of SIMAS-Acuña’s financial
situation is the ratio of total operating income to operating costs (1.39), with operating
income exceeding operating costs by 39%. These results allow it to finance its investment
in infrastructure. On the other hand, COMAPA-Reynosa does not even cover all of its
operating costs; in 2007 it recorded a 30% deficit.
Paradoxically, when we calculate the ratio of total liabilities to total assets,
SIMAS-Acuña has the highest results. This can be explained by the fact that it is the only
utility paying debt service (to NADB and BANOBRAS); the other two utilities receive
most of their infrastructure funding in the form of subsidies or grants. Despite this fact,
the difference between the three utilities is insignificant; COMAPA-Nuevo Laredo has
committed 17% of its assets to debt payment, while SIMAS-Acuña has committed 22%.
As shown by the following indicator, which compares current liabilities or short-term
debt to net income, SIMAS-Acuña has to use 10% of its annual income to cover its
annual debt payments, whereas COMAPA-Reynosa must use 34% of its annual net
income to pay its short-term debt.
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A traditional indicator of operational efficiency is the ratio of labor costs to total
operating costs. Given the extent that available data is aggregated, this study shows the
ratio of the expense line item for ―Personnel Services‖ (including labor costs and benefits
for all employees) to total operating costs. In general, personnel expenses were shown to
account for more than 50% of total expenses for all three water utilities studied. A factor
related to these costs—which were generally considered to be high—is the presence of
unions inside the utilities. One sign of the cost of unions is that benefits for Mexican
utility workers may be 100% higher than their wages.
An operational efficiency indicator reported in several water utility studies is the
cost of electricity needed for various water distribution and wastewater treatment
processes. The importance of this input is reflected in the available data reported by
SIMAS-Acuña and COMAPA-Nuevo Laredo, which shows that electricity alone
accounts for about 14% of operating costs. An increase in electricity costs would then
have a significant impact on the financial situation and operation of the water utilities. It
should be noted that this calculation includes personnel expenses as an operating cost, so
the actual percentage of expense for this item could be considerably higher. In interviews,
the finance managers for the three Mexican utilities mentioned that electricity can amount
to 30% of operating costs, when the calculation only takes into account personnel costs
for operation and maintenance areas exclusively.
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U.S. Cities
Table 2.2 shows some indicators we were able to obtain from the 2007 annual financial
reports of the U.S. water utilities. Unlike Mexican water utilities, water and wastewater
services are usually included in the public works or utilities department of the city. As a
result, the financial reports for these services are included within the financial statements
of the city. One drawback of this reporting format is that some important operating costs,
such as electricity, are aggregated to such a degree that they do not appear in the report.
One financial advantage for the U.S. utilities is that financial support for
necessary investments in the city’s water infrastructure comes directly from city
revenues. In fact, investments in water infrastructure are included in the city’s financial
plans. However, in the finance report on city ―businesses‖ we were able to identify the
financial performance of the water utilities. One of the most important categories that we
included in the indicators, which does not appear on the Mexican side, is bonds.
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Table 2.2. Some Financial Indicators: U.S. Water Utilities (1)
Indicator
Del Rio
LWUD
MPU
Total net income in 2007 (2)
8,945,808
41,129,930
28,495,988
Sale of long-term bonds (2)
38,209,000
47,399,697
70,372,240
Long-term bonds / total assets
38%
17%
36%
Net income / total assets
9%
15%
15%
Total annual operating income /total
annual operating costs
1.18
1.14
1.73
Total liabilities / total assets
43%
22%
40%
Current liabilities /total net income
5%
29%
5%
(Personnel services / total annual
operating costs)*100
22%
26%
N/A
(Electricity costs / annual operating
costs)*100
5%
N/A
N/A
(1)
For fiscal year October 2006-September 2007.
In U.S. dollars.
N/A: Not available
Source: Developed by the authors based on information provided by the U.S. utilities.
(2)
The first indicator showing the financial situation of the water utilities in the three
cities studied is the percentage of income over operating costs. Unlike Mexican water
utilities, the three U.S. cities cover all of their operating costs. In the case of McAllen,
income exceeds operating costs by 73%. These financial results give the cities the
opportunity to finance the replacement of infrastructure or the expansion of services
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using some of their own funds. Although to a lesser degree, income also exceeds
operating expenses in Del Rio (18%) and Laredo (14%).
Another indicator for each utility is the ratio of debt from the sale of long-term
bonds to total assets. In general, we see that long-term debt from bond issues for Del Rio
and McAllen represents 38% and 36% of their total assets; while in Laredo it comes to
17%. This shows how Del Rio and McAllen rely more on the sale of bonds as a funding
strategy for their infrastructure investments. These indicators are probably higher than
Laredo’s because of the low level of investments made in recent years (during the
concession to United Water) as explained by the officers interviewed. Another possible
factor affecting this ratio is the fact that Laredo is the only utility that has implemented
significant rate increases and, therefore, could have used direct income to partially
finance some maintenance investments.
The three cities have essentially the same results for the ratio of total liabilities to
total assets. These results stem from the importance of bond sales in relation to total
liabilities for the water utilities in these cities. Del Rio once again has a higher percentage
of total liabilities compared to total assets (43%), while Laredo reports a smaller
percentage (22%).
The ratio of total net income to total assets shows the relationship between the
revenue generated by water services and the assets used for this activity. Laredo and
McAllen have similar percentages, with water service generating the equivalent of 15%
of its fixed assets as annual income. A simple interpretation of this indicator would
suggest that these cities could recover the cost of their total assets in approximately seven
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years. Del Rio, on the other hand, reports a lower percentage (9%) probably because of
the heavy investments it made in the construction of a water treatment plant that uses
microfiltration.
Surprisingly, the ratio of current liabilities (or short-term debt) to total net income
indicates that while Del Rio and Laredo use a relatively small percentage of their income
to cover liabilities (5% for both cities), Laredo uses 29% of its total net income. This
indicator suggests that in the case of Laredo, even though the debt from long-term bonds
is an insignificant percentage of its total assets, its short-term liabilities represent a
considerable proportion of its total revenue.
With respect to operations, available information indicates that labor costs in Del
Rio and Laredo represent 22% and 26% of their total operating costs, respectively.
Despite the difficulty of comparing these indicators with other utilities, these figures
suggest that a greater percentage of operating costs is used for materials or maintenance
of the water and wastewater systems. The percentage of electricity costs to annual
operating costs was only available for Del Rio and was reported at 5%. This indicator is
low compared to the information provided in interviews with the financial managers who
generally mentioned high electricity costs. However, it is important to consider that Del
Rio utilizes only surface water. Unfortunately this indicator could not be calculated for
the three cities for lack of information.
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2.2.3. Commercial Efficiency
Rates play a strategic role in financial planning. A well-designed rate structure is
expected to generate sufficient revenue flows for the adequate operation of the services.
A financially sustainable rate structure is not, however, the only aspect of water utility
finances that requires attention. Another basic element is achieving adequate commercial
efficiency or collection rates (the amount of money actually collected compared to the
amount billed). A well-designed rate structure can end up being fruitless if collection is
not effective. For example, the Association of Water and Sanitation Regulatory Entities
of the Americas (ADERASA) reported in 2006 that during the 2003-2005 period the
water utilities in the cities sampled had an average of three months of billing pending
collection at the end of the fiscal year. Payment in arrears for services represents a
financial cost for water utilities. So improving collection rates becomes a necessary
mechanism for ensuring the financial sustainability of the water utilities.
Mexican Water Utilities
In most Mexican water utilities there is no direct connection between actual operating
and maintenance costs and rates (CONAGUA, 2007). In practice, the financial area of the
utility is usually not involved in setting rates; proposals for rate adjustments are
determined by the manager and the commercial area. Rates are still an issue of political
debate for local and state administrations, rather than a matter of financial sustainability
for water utilities, which suggests that the use of rate structures that include costs
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generated by the increase per cubic meter of water demanded (technically known as the
marginal cost) is highly unlikely in the medium term.
In the Mexican cities studied proposals for rate adjustments were usually initiated
by an internal analysis performed by the financial area of the utility (requested,
supervised and authorized by the utilities’ managers). The resulting proposal is submitted
to the utility’s Board of Directors for approval or amendment and subsequent approval. If
the Board of Directors authorizes the new rate structure, the proposal is sent to the state
water agency for approval. If it is approved by the state government, it is sent to the
Official state gazette for publication. As a result, determining the rate structure and
amounts is still a political issue. In practice, the different political forces must be in
agreement, especially the city mayor and the state governor; otherwise rate adjustments
may be stalled.
A sign of the resistance to rate changes can be seen in the fact that only one of the
three Mexican cities, Ciudad Acuña, has adjusted its rates recently (2007). Even this
adjustment was only a restructuring of consumption levels, so for all practical purposes
the current rates were authorized in 2006. SIMAS-Acuña management implemented an
initiative for automating the distribution system which has generated some savings and
thus reduced the pressure for a rate increase. However, the estimated cost per cubic meter
of water ($4) is higher than the average rate of the current fee structure. The current rate
system includes 12 levels of consumption; only from the seventh level (31-50 cubic
meters) on is the charge $4/m3. This means that customers using less than 30 m3 pay less
than the current estimated cost. However, setting rates is not included among the finance
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area’s duties. Rates are proposed directly by the general manager and the commercial
area manager and are authorized by the Board of Directors. This implies that maintenance
and investment needs and long-term expenses are not included in the projections for
revenue needed to support the utility. SIMAS-Acuña management believes that a rate
study is needed to support a financially viable rate structure.
In both Reynosa and Nuevo Laredo rates have remained unchanged since 2004,30
which means that the revenue generated by the utilities in these cities has had to absorb
the cost of inflation for the last three years. One officer interviewed suggested a possible
solution to this problem would be to automatically adjust rates to inflation (indexation)
and that the procedure for indexing water rates could be specified in state water
legislation.
However, in addition to inflation, water utilities have to absorb increases in
operating costs when rates are not adjusted to cover actual costs. Electricity, for example,
which represents a significant percentage of real operating costs (up to 30%), went up
approximately 1% a month in 2007, resulting in a 12% annual increase. Labor is another
significant operating cost. The three Mexican utilities have strong labor unions
(COMAPA-Reynosa has three), which implies annual contract negotiations that usually
include cost-of-living wage increases. Additionally, worker benefits may be more than
100% of their wages.
COMAPA-Nuevo Laredo has had to deal with a serious financial situation the
past three years because rates have not been adjusted since mid-2004. Although a 21%
30
In the case of Reynosa, a rate increase was authorized in June 2004, but was not implemented until
September 2005.
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increase in water rates was requested in 2005, the Board of Directors approved an 11%
increase, which was not published in the official state gazette. A request for an 11%
increase was submitted again in 2008 but was rejected by the state water agency, which
asked the utility to obtain a new approval from its Board of Directors. During the same
period costs have increased: more than 100% for electricity; for materials such as PVC,
polyethylene, steel; and for annual wages. As a result the utility has been forced to reduce
operating expenses. This situation clearly affects preventive maintenance of the system.
The financial manager of COMAPA-Nuevo Laredo estimates that a rate increase of at
least 20% is needed to be effective.
In interviews the financial managers of COMAPA-Reynosa stated that the
increase in service demand deriving from significant population growth has allowed them
to continue operating despite not having rate adjustments since 2005. In other words, the
failure to generate revenue from adequate rates has been compensated by an increase in
demand. An inspection of the water treatment plants, however, highlights serious
problems due to inadequate maintenance during the past few years. Similarly, the large
amount of leaks reported by local newspapers suggests that preventive maintenance has
been severely affected by the financial situation.
One characteristic of the rate structures in the Mexican cities studied is their
complexity. The most widely-used rate structure is based on rates per cubic meter that
increase with increasing consumption, also known as increasing block rates. Only
SIMAS-Acuña has a relatively simple structure that consists of 12 water consumption
levels for two types of customers (residential and commercial/industrial). In contrast, the
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rate structure for Reynosa and Nuevo Laredo has 43 levels of consumption and four
different customer types: residential, government, commercial and industrial. In
COMAPA-Reynosa, the category for residential customers includes subsidized rates for
retirees, pensioners, senior citizens and the disabled. Similarly, COMAPA-Nuevo Laredo
has a complicated structure also consisting of 43 levels of consumption and four types of
customers: residential, commercial, industrial and government. A detailed description of
rates for both Mexican and U.S. water utilities can be found in Annex 1.
For the purposes of applying its rates in practice, COMAPA classifies its
customers in six categories: domestic, commercial, industrial, public, COMAPA
employees, residential and pensioners. The application of different rates for customer
sub-groups indicates that part of the population is subsidized (employees of both
COMAPA and usually public buildings do not pay for service, while pensioners are
subsidized).
This situation is even worse when one considers that the estimated cost per cubic
meter of water produced is normally higher than the average rate per cubic meter. For
example, in Nuevo Laredo utility management estimates the cost at seven pesos; this rate
level applies only to residential and commercial customers that consume more than 140
m3 a month. In contrast, industrial customers pay this rate for 20 m3 and more. However,
residential customers usually pay between $36 pesos (minimum unmetered usage) and
$220 pesos (high metered usage). These payments are low compared to other services
such as electricity, gas or telephone. Table 2.3 presents a general description of the
current rate structures in Mexican cities.
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Table 2.3 Design of Water Rates for Mexican Cities
Ciudad
Nuevo
Reynosa
Acuña
Laredo
Fixed rate
$30.00
0
0
Low consumption level (m3)
0 to 5
0 to 5
0 to 5
Rate for low usage (1)
$ 2.80
$ 25.73(2)
$ 2.25
201 a 9,999
> 2001
> 2001
Rate for high usage (1)
$ 6.772
$ 24.08
$17.35
Rate for 30 m3 (1)
$3.752
$4.06
$3.60
Charge for wastewater collection
20%
40%
40%
Charge for wastewater treatment
10%
0
0
Ratio of industrial rate /
residential rate at lowest level
1.42
1.26
2.44
High consumption level (m3)
(1) Price per cubic meter extra; average water usage for a household of four in the region studied is
estimated at 30 m3.
(2) Fixed price at this usage level
Source: Developed by the authors with information provided by SIMAS-Acuña and the official gazette of
Tamaulipas, February 18 and July 27, 2004.
In both Reynosa and Nuevo Laredo the rate structure includes a wastewater collection
charge equal to 40% of the amount billed for water consumed; in the case of Ciudad
Acuña the wastewater collection charge is 20% of the water used. Ciudad Acuña is the
only Mexican city studied that includes a charge for wastewater treatment (10%);
Reynosa and Nuevo Laredo do not charge customers for wastewater treatment.
The commercial efficiency of SIMAS-Acuña has recently improved. In 2001 it
recorded 62% commercial efficiency, meaning that 38% of the total amount billed was
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not collected. In 2007 commercial efficiency jumped to a monthly average of 87%. This
percentage is high in Mexico where utilities averaged 67.7% for 2006 in the report
“Situación del Subsector Agua Potable, Alcantarillado y Saneamiento (Status of the
Water and Wastewater Subsector),” 2007 issue.
The efficiency reported by Ciudad-Acuña is closer to that reported by the U.S.
cities studied and is the result of a micro-metering policy for water usage (using funding
from the PRODDER program, 84% of residential customers were metered by 2008), and
cutting off service to customers more than two months in arrears. Additionally, as of the
third month a reconnection fee is charged even if service was not physically
disconnected. Moreover, although no discount of the debt is authorized, payment
agreements are signed with customers in arrears. Nevertheless, SIMAS-Acuña grants
50% subsidies to seniors over 60 (as well as pensioners and retirees, as set forth by the
Income Law) living in rented housing.
No complaints about the disconnection policy in Acuña have been registered,
apparently because a recent rate structure approved in 2007 lowered the amount billed for
customers who had been paying a fixed rate for an estimated 25 cubic meters a month.
However, in 2007 the State Human Rights Commission filed a claim against SIMASAcuña for disconnecting a customer. The claim did not proceed because the utility
showed that the unpaid bills were not due to lack of income or payment capacity
(interview with the commercial area responsible).
It could be argued that one reason for the low collection rate is lack of available
payment points. SIMAS-Acuña includes bar codes on its bills to facilitate water service
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payment through banks and grocery stores, which charge five pesos for this service. To
prevent an accumulation of fictitious delinquent accounts, the utility created a new
account program for updating its database of customers living in public housing that had
been purchased with an unpaid water debt that the new inhabitants could not or would not
pay. These debts were recorded as uncollectable. As a result, the utility could at least
collect revenue from the new accounts and regularize payments from approximately 500
customers.
Similarly, in cases where a home is registered as abandoned the debt is declared
uncollectable. This measure prevents fictitious delinquent accounts from building up and
commercial efficiency statistics that really only reflect a failure to update the customer
database. A positive characteristic in Ciudad Acuña is that, unlike the other Mexican
cities studied, in this city public buildings pay for water services.
Another revenue-boosting measure implemented in Ciudad Acuña was the
improved maintenance of meters for high usage (industrial) customers, thus obtaining
actual consumption levels since many meters were no longer accurate. This information
suggests that something similar could occur with residential customers, although the
financial impact would be smaller.
Compared to SIMAS-Acuña, the utilities in Nuevo Laredo and Reynosa reported
low commercial efficiency rates. In Nuevo Laredo, approximately one out of two
customers does not pay their water bill on time (51%), while in Reynosa four out of ten
(36%) do not pay on time. These ratios indicate that, unlike the recent measures taken in
Ciudad Acuña, disconnection has not been systematically implemented in Nuevo Laredo
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and Reynosa as a policy to improve collection efficiency. In both cities records
commonly show many customers who have not paid their water bills for several months,
and even years. What makes matters worse is that unaccounted or unbilled water makes
up a significant proportion of total water produced in these utilities. For example,
COMAPA-Nuevo Laredo reports a low percentage of physical efficiency or percentage
of water entering the system that is billed (51%). This factor, added to the low collection
rate, means that payment is only received for about 25% of the water produced in Nuevo
Laredo.
For 2008, approximately 14,000 customers in Reynosa (8% of the total) had not
paid their water bills for a year or more or owed more than three thousand pesos. The
collection area considers these accounts delinquent and has separated them from
―regular‖ customers who are only one or two months past due. To deal with this problem
the new administration that took over in 2008 created a delinquent collections division,
which is proposing a policy of warning notices, installment payment plans and service
cut-off if no agreement is reached with delinquent customers. Based on the expectations
of the finance area, only a maximum of 40% of the delinquent accounts are expected to
be recovered this year. Within the utility itself some differences have arisen regarding
implementation of service disconnections as a means of improving collections and
financial sustainability. In COMAPA-Reynosa the disconnection policy is applied in
different ways. For large customers, defined as those who consume more than 80 cubic
meters of water a month (usually commercial and industrial customers), service is
disconnected when accounts are two months past due. Residential customers are given
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slightly more time to bring their accounts up to date. This situation may also be reflected
in different levels of service quality. The reconnection fee is 150 pesos; however, it is not
actually applied to all delinquent customers. Although officially there are surcharges for
unpaid accounts, in practice the current policy in Reynosa is not to charge them.
A measure implemented by the 2004-2007 administration that is affecting the
current financial situation of COMAPA-Reynosa is the fee charged for a period of three
months to both metered and fixed-rate customers, equivalent to minimum consumption of
10 or 15 cubic meters. This policy severely affected not only the amount collected by
COMAPA-Reynosa, but also the willingness to pay. There have been disputes over high
usage because meter reading was suspended for several customers even though they had
meters. When meter reading resumed there was a significant difference between the last
recorded reading (more than three months earlier) and the current reading, because a
fixed rate was paid instead of actual volume. It is estimated that this situation will affect
collections for several months because of customer disputes, the large amounts billed and
the adjustments the utility will have to make in billings.
The problem of low collection rates partly explains why COMAPA-Reynosa has
fallen behind in activities essential to its operation, such as micro-metering. A reported
30,000 meters have not been installed, representing 18% of all residential customers. The
sums owed by public buildings for water use is another key reason why Reynosa is
falling behind.
In Nuevo Laredo the high rate of past-due accounts is being tackled by
disconnecting service and charging a reconnection fee, which was not applied prior to
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September 2007. About 300 customers are disconnected every week. The reconnection
fee for residential customers is 250 pesos. As of September 2007 delinquent accounts
totaled more than 70 million pesos, which is equivalent to more than four months of
billing for water and wastewater services in COMAPA-Nuevo Laredo. Despite the fact
that the Tamaulipas State Water Act specifies that no one can be exempt from paying for
service, municipal and state agencies do not pay for water in Nuevo Laredo. Public
buildings, such as prisons and state and municipal offices, do not pay for water. Only
schools pay for part of the water they use (one annual payment). Schools make one
annual payment (agreement between COMAPA and SEP31), which only covers part of
the cost of service. One of the main reasons for being behind is because the customer
database has not been updated. The water distributed to unserved subdivisions is not paid
for either.
U.S. Cities
The water utilities in the three U.S. cities studied (Del Rio, Laredo and McAllen, Texas)
generally take a business approach to water and wastewater services, which implies that
the services must be provided with good quality and must be paid for.
With this
approach they are able to cover operating and preventive maintenance costs, as well as a
small portion of medium-term investment requirements to rehabilitate and expand the
system. Viewing water services as a business begins from the moment the service
contract is signed. In McAllen, for example, in addition to other requirements such as a
31
Ministry of Public Education
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permit from the city planning department, a deposit must be made when service is
contracted: $100 dollars for residential customers and between $250 and $1,000 dollars
for commercial customers. The deposit is refunded after two years of service if the
customer is in good standing (no past-due payments owed) or is used to cover any
outstanding payments due. If service is cancelled with no outstanding payments due, the
deposit is refunded to the customer. In Del Rio the deposit for residential customers is
$50 dollars, and a contract for new housing is $500 dollars.
However, none of the U.S. cities has an estimate of the actual cost to produce a
volume unit of water. In general the cost of water services is not compared to other
utilities either, which makes a comparison with other services such as electricity or
telephone service difficult since several companies offers these services in each city.
Unlike the way in which rate structures are designed in Mexican water utilities, in
Texan cities rates are based on studies performed by external consultants. These studies
usually include operation and maintenance costs. This financial analysis of the rates is
reviewed and then submitted to the City Council for approval. Rates are ultimately
defined taking into account the costs of operation, preventive maintenance and planned
projects. In all three cases, at least a significant portion of new infrastructure costs to be
funded with bonds is included. For example, in Laredo, the water utility (LWUD)
projects income from the minimum consumption block as a source of debt financing; any
volume above the minimum consumption block is used to cover operations and
maintenance. The rate study model for Laredo includes 14 types of customers and
projects their consumption and the financial needs of the utility. One complex aspect of
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the model is that the wastewater fee is a percentage of the amount charged for water. A
sustained rate increase was approved beginning in 2006.
LWUD is the only water utility studied that has a long-term sustained rate
increase scheduled (although only for water) over 15 years. The rate increases began with
a 25% increase in May 2006, followed by a 10% increase the second year and 7% annual
increases thereafter. The rate increase took into account price elasticity of between 3-5 %.
Despite this, the increases in the water rate are considered adequate. However, the
wastewater rate, in the opinion of one utility officer interviewed, is still lower than the
actual costs. A sustained rate increase is also being considered for wastewater, which is
intended to be used to finance part of the planned projects.
In Del Rio regular (annual) reviews of the rates began in 2000. Prior to that, there
are reports of financial problems that are currently reflected in leaks and the need to
rehabilitate the distribution system. Over a seven-year period (2000-2007) rates were
adjusted three times. Even though the rates are reviewed annually, a rate increase may not
be necessary. One billing problem is the charge for wastewater since it is calculated as
the amount of water consumed in excess of the minimum consumption level (0-3000
gallons) based on average water consumption in winter (three months). This means that if
there is a leak during that period, the charge for wastewater increases beyond the
customer’s normal payment.
Table 2.4 provides a general overview of the rate structures used by the water
utilities in the U.S. cities studied.
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Table 2.4 Design of Water Rates for U.S. Cities (1)
Del Rio Laredo
McAllen
Fixed rate
Maximum consumption in lowest block (gal.)
0
3,000
0
2,000
4.00
1,000
Minimum block rate
$8.90
$7.50
$1.30
Rate for every 1,000 gal. extra consumed
Wastewater service rate for minimum consumption
Wastewater rate for every 1,000 gal. of water consumed
in excess of minimum consumption
(2)
$2.77
$8.19
$2.49
(3)
$1.38
$8.50
$1.03
$1.30(4)
$10.30
$1.30
Notes:
Where 1,000 gallons equal 3.78 m3
(1) In U.S. dollars
(2) The rate is constant for all amounts consumed in excess of minimum consumption.
(3) Applies to consumption over 2,000 gal but less than 4,000 gal. For higher consumption, the rate increases every
10,000 gal. For a more detailed description see Annex 1.
(4) This rate is charged for the first 20,000 gal.; for consumption in excess of this amount the charge is $1.60.
Source: Developed by authors from data obtained from Del Rio Code of Ordinance 2003-032; Laredo Code 31; and
McAllen Code 1966.
With respect to collection efficiency, in general the U.S. cities report adequate collection
rates for water service. The highest collection rate was reported in McAllen, with 98% of
the population paying its water bills in less than two months. In Laredo the collection rate
is approximately 85%, while in Del Rio about 80% of customers pay on time. In all three
Texas cities a reconnection fee is charged ($35 dollars during the week and up to $75
dollars on weekends in Laredo; $15 dollars in McAllen and $10 in Del Rio). Laredo and
Del Rio also charge fees for late payment. All three cities systematically cut off service to
delinquent customers. Another factor that probably helps keep delinquent payments down
is that water service fees are included in the same bill as other utilities such as gas or
garbage collection. So if the bill goes unpaid more than one service is suspended.
Another factor that may influence the commercial efficiency of the Texas water
utilities is that their billing and collection process is generally more efficient than that of
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Mexican utilities. In McAllen the billing process, from meter reading to bill preparation,
takes seven days and bills are sent out 10 days after meter reading. The customer has 20
days to make payment, after which a notice is sent out. Ten days after the notice is issued,
utility personnel are sent to disconnect service. So, service disconnection occurs one
month after the meter reading date. In the case of the Mexican water utilities, it usually
takes at least three months for service to be cut off. Although no fee is charged for late
payment, customers are charged a $15-dollar reconnection fee. Uncollectable payments
at the end of the year for McAllen are 1.2%, which means that 98.8% of the amount
billed is collected. Customers pay for their services within a month of the payment date
or they are disconnected.
To prevent an accumulation of fictitious debts, accounts that have not been paid in
more than two months are automatically cancelled in McAllen and included on the
disconnected list. For customers who fail to pay on time and demonstrate an inability to
pay, the utility may grant an extension for a few days or a week or a payment plan may
be arranged. Payment plans are used but are short-term. By the end of the year most pastdue payments have been collected. In 2008 in McAllen water services can be paid by
mail (60% prefer this method), by automatic bank draft, on-line, at grocery stores, etc.
The bill contains information about the meter reading date, previous and current readings,
rates and a customer service number for complaints. The bill is currently being
redesigned to improve its presentation. Bills are processed internally by MPU personnel.
Despite recent sustained rate increases, LWUD in Laredo reports a collection rate
of between 80% and 90%. Past-due payments are usually collected within 60 days. This
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means that within 60 days collection is effectively complete. A strategy recently
implemented to curb rising delinquency rates is a late penalty fee equal to 5% of the
amount billed or $5 dollars, whichever is higher.
Rates in McAllen are comparable to those in Laredo. Both are among the lowest
in the state of Texas. Unlike LWUD, McAllen is not planning any systematic rate
increases in the medium-term, although rates are reviewed annually. Despite this, the
rates are sufficient to recover operating and maintenance costs. According to the head of
finance, the explanation for this is that the utility is run efficiently.
In Del Rio, billing and collections is organized in four sections, and is performed
one section per week. To prevent reading errors the data is reviewed and corrected. The
customer is warned when the reading is unusually high, which does not happen often.
This reduces complaints about billing errors, which are very common in other cities.
Water and gas readings are taken simultaneously within a five-day period per section.
Customers have 15 days following the date of issuance to pay their bill, with a grace
period of 7 to 10 days. As of that date a $10 dollar penalty fee per service (water and
gas) and a $10 dollar reconnection fee per service (a total of $40 dollars) is charged and a
disconnection warning notice is sent.
Service is disconnected approximately one month after the reading. To reinforce
service payment, between 80 and 120 households a day are disconnected. The only
support that Del Rio provides customers who cannot pay on time and report an inability
to do so—a problem preventing payment such as an illness—or those who are retired or
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pensioners, is not to charge them the penalty fee. Even with these measures, Del Rio
reports an average of 20% of its accounts as delinquent.
Certain characteristics of Del Rio may help explain some of the possible reasons
for this delinquency. Customers living in the northern area of the city may have difficulty
making payment because of the great distance to the city offices. Customers have
relatively few payment options: they can pay at the city offices, in cash or by check, but
not by credit card; at the city bank for a $1 dollar fee (since December 2007); or on line
by credit card (implemented in December 2007). These recently implemented options
(Bank and on-line) are expected to improve collection rates. Another option under
consideration to facilitate payment is to accept credit cards at the city offices.
Water bills in Del Rio do not include information about consumption or rates.
Basically only the amount owed is sent in the form of a postcard. The same bill includes
the charge for garbage collection. The commercial area has limited staff. The person in
charge of the billing area also handles customer complaints.
2.2.4. Financial Sustainability
The financial sustainability of water services can only be achieved with sufficient
revenue to allow the water utilities to continue operating under adequate conditions of
quality and reliability. At the same time service quality and reliability depend on
maintenance and a coverage rate that keeps pace with city growth.
In financial terms, a key element for the short-term sustainability of water utilities
is their ability to recover operating and maintenance costs. For long-term financial
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sustainability, external subsidies for operations and capital investments must be
eliminated. Direct revenue from service charges and rates must become the main source
of funding to cover operating and maintenance expenses and at least part of the
investments in infrastructure. One possible strategy is to gain financial independence
from the government and other external sources through the creditworthiness of the water
utility itself (Baietti and Curiel, 2005; quoted in Baietti et al 2006: 26). However, until
the water utilities take a business approach in their operation, they will continue to rely
heavily on other sources. This approach can be implemented gradually, taking into
account the affordability of rates, the payment capacity of customers and fairness.
As described in Section 2.2.1 of this chapter, Mexican water utilities rely heavily
on external sources for infrastructure financing. They generally resort to grants or
transfers and, to a lesser extent, to loans from some development banks, such as
BANOBRAS or NADB.
The first step to achieving financial sustainability consists of ensuring that the
water utility can cover its operating and maintenance costs. As shown in the indicators in
Table 2.1, SIMAS-Acuña is the only Mexican utility that covers its operating costs and
can even have a maintenance plan. Moreover, it is the only Mexican utility studied that
depends largely on loans and pays actual debt service costs. Despite this, its current
liabilities can be met by its annual income. This utility shows how a commercial and
business outlook has gradually been incorporated into its management. One possible
explanation for this result is that the general manager comes from the private sector.
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In comparison, COMAPA-Nuevo Laredo and COMAPA-Reynosa exhibit
financial indicators that will not help ensure their long-term financial sustainability. Both
utilities rely heavily on grants and subsidies to finance infrastructure and even, in the case
of Reynosa, to operate and maintain its systems. As shown in Table 2.1, COMAPAReynosa requires subsidies to cover 30% of its operating and maintenance costs. Due to a
large amount of uncollectable delinquent accounts and liabilities totaling 200 million
pesos generated by the previous administration whose term ended in December 2007,
COMAPA-Reynosa relies heavily on external sources for investments in maintenance,
infrastructure rehabilitation and system expansion. Additionally, COMAPA-Reynosa is
behind on its payment to CNA for water rights totaling 20 million pesos. Under these
conditions, the water utility cannot finance any infrastructure work, even though works
costing an estimated 40 million pesos are considered necessary.
This situation is even more critical when one considers the high number of leaks
reported in both Reynosa and Nuevo Laredo (with water losses of about 50%) and the
need to replace part of the distribution system given the large number of pipelines built
more than 50 years ago or with inadequate materials. This indicates inadequate
maintenance, which implies that even when operating costs are seemingly covered (as is
the case in Nuevo Laredo), maintenance costs are lower than the amount required.
The greatest risk factor to financial sustainability for all three Mexican water
utilities is their low collection rates. In the case of Reynosa and Nuevo Laredo, the high
percentage of customers who do not pay for water services and, even worse, the low
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likelihood of recovering delinquent accounts, calls their financial sustainability into
question.
A factor that could become an obstacle to the financial sustainability of Mexican
water utilities is inadequate rate adjustments. With the exception of SIMAS-Acuña,
which made a rate adjustment in 2007 (although the last real increase was in 2006), the
Mexican water utilities keep the same rate structure for several years, except for
adjustments for inflation. The centralized approval system is also an obstacle to timely
rate adjustments. Heavy reliance on the mayor’s decisions, as chairman of the Board of
Directors, limits the real possibility of rate adjustments. There would be a better chance
of making rate adjustments if the boards of directors were less dependent on mayors. The
decision would then be based primarily on financial criteria.
The general manager of the utility is the one who decides the appropriateness of a
rate adjustment, almost always taking into account political ramifications, as well as or
before financial considerations. The financial area of each utility, responsible for internal
finances, could play an important informative role with respect to the real need for
adjustments and their required timing.
Another important factor that could become an obstacle to the financial
sustainability of Mexican water utilities is a high percentage of personnel expenses
(included under Personnel Services). Although available information does not permit
analysis of the distribution of personnel in different areas (operation, maintenance,
administration), in general more than 50% of all operating expenses go to personnel
services. The existence of unions with strong bargaining power was detected in all three
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water utilities. For example, SIMAS-Acuña has 129 employees (in spite of a recent
reduction, there were 139 workers in 2007). Although labor costs are considered high,
and despite the implementation of automated processes, the number of personnel cannot
be reduced because of the collective bargaining agreement. The managers interviewed
also admitted that working conditions are very good and benefits can come to more than
100% of wages. It was suggested that unions do not favor changes that would improve
utility efficiency. This was also reflected in operation and maintenance conditions.
Although maintaining good wage conditions for workers is advisable for the adequate
operation of water services, a more efficient use of manpower would be a strategy for
supporting financial sustainability.
One operational factor that implies a high cost for water services is electricity.
The inadequate maintenance or operation of infrastructure is reflected in high energy
costs. With the exception of Ciudad-Acuña where an automated distribution process was
implemented that reduced electricity costs, the other two Mexican utilities have not made
any effort to conserve energy.
A factor that could compromise the financial sustainability of the Mexican
utilities and also affect urban development of the cities is a strong dependence on
commercial and industrial customers (up to 50% of revenue) in the Reynosa and Nuevo
Laredo utilities. While large water consumers (usually industrial and commercial
customers) are apparently a sure source of revenue that enables the utilities to continue
running, they could also severely affect the financial sustainability of the utilities, if for
instance the companies leave the city or there’s a decline in commercial activity and thus
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in business. Moreover, this strong dependence could become an obstacle to making rate
adjustments, for instance, if industry or business is represented on the Board of Directors.
In general U.S. utilities seem to have better prospects for financial sustainability
than Mexican utilities. The main source of internal funding for all three cities studied
(McAllen, Laredo and Del Rio) is service fees and the water service feasibility fees that
developers are charged.
The strong business approach applied to water services in Texas means rate
adjustments are seen primarily as a financial decision that must be made regularly
(annually) based on independent financial studies. Moreover, the rate structure includes
operating, maintenance and infrastructure financing costs. This commercial view of water
services from both the city administration and residents ensures adequate collection rates
(none of the three have less than 80%). It is important to note that even under this
commercial and financial approach maintenance costs can be kept lower than actual
needs, as occurred in the cases of Laredo and Del Rio which reported significant
problems with leaks, low pressure and water losses. Therefore, it should be stressed that
adequate maintenance costs must come from a long-term maintenance plan. While Del
Rio and Laredo apparently recover their operating costs, it is clear that they only have a
limited margin for financing their long-term needs. This information suggests that both
cities are in need of a rate adjustment.
Paradoxically, despite the fact that the water services in all three cities studied in
Texas are managed by the respective city, they enjoy relative financial autonomy. One
important factor in understanding the greater autonomy in designing and approving rates
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is that meetings of the city council and utilities boards in Texas are public and open,
which facilitates providing customers with information on possible rate increases and
receiving customer feedback before their approval.
Unlike Mexican cities, only projects in low-income areas (known as colonias and
usually inhabited by low-income Mexican immigrants) are financed with grants (from
TWDB and NADB). This funding policy may be considered the best option, since the
rates required to finance system expansions with internal funds could be too high for
many low-income families. This policy allows subsidies to be directed towards certain
areas of the city where the cost of service expansion could not be covered by service fees.
This option would allow service coverage to be extended to the poorest customers, while
still preserving the efficiency and financial sustainability of water utility operations. One
factor limiting the use of state funding sources in Texas cities is that there are only two
programs: Drinking Water Account and Sewer Water Revolving Account, which have
very limited grants; approximately $10 million dollars to be used in poor cities that can
demonstrate insufficient revenue.
The case of LWUD illustrates an important factor that may contribute to the
sustainability of water utilities in the U.S.: organizational changes. LWUD is currently
undergoing an intense organizational change (initiated at the end of 2007), that consists
of giving superintendents greater organizational responsibilities, as well as more
responsibility in project and budget planning. This reorganization stems from a ―need to
survive‖ after a utility crisis following its failed experience with private participation
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(when the agreement with United Water was broken) and its subsequent operational
problems (because of low maintenance) and significant administrative changes.
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2.3. Management of Water Quality
In this article the management of quality from a technical standpoint encompasses all
technical actions needed to maintain, preserve and protect the physicochemical and
biological characteristics of water for human consumption and the conservation of natural
ecosystems. Some of the criteria used to evaluate practices related to the quality of the
water provided to people and discharged into the environment are: the condition of the
general infrastructure in water treatment plants (WTPs) and wastewater treatment plants
(WWTPs); the level of professionalization and staff training; the physicochemical and
biological parameters evaluated; and compliance with current standards. In summary, the
appropriate management of water quality that a water utility is required to meet includes:
1. Maintaining and protecting water quality in accordance with current health and
environmental standards;
2. Maintaining, protecting and conserving water in the environment;
3. Ensuring that water treatment processes are suitable for the purposes of recreation
and human consumption.
Figures 3.1 and 3.2 show the location of the WTPs and WWTPs in Mexico and the
United States that were visited.
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Figure 3.1 - Location of Water Treatment Plants by U.S.-Mexico Border City
Source: Developed by authors.
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Figure 3.2 - Location of Wastewater Treatment Plants by U.S.-Mexico Border City
Source: Developed by authors.
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2.3.1. Infrastructure Maintenance and Improvement
Mexican and U.S. Water Treatment Plants
For this analysis we obtained information from operations manuals as well as about
physicochemical and biological parameters that the water utilities must meet in
accordance with the standards established in each country. In addition, site visits and
face-to-face interviews with personnel of the WTPs and WWTPs in the Mexican cities
(Acuña, Nuevo Laredo, and Reynosa), as well as in the U.S. cities (Del Rio, Laredo, and
McAllen) made it possible to evaluate working conditions and the functions carried out in
the treatment plants. As a result we were able to implement a qualitative evaluation of the
condition of the infrastructure, conditions in the work area, trained personnel and the
availability of an operations manual, etc. (Table 3.1). It should be noted that this
evaluation was conducted on the Mexican and U.S. treatment plants covered by this
study, we assigned values to each aspect assessed on a scale of 0-4 where the highest
value was 4 and the lowest value was 0.
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Table 3.1. Qualitative Evaluation of the Water Treatment Plants Visited
Country
State
Criteria/Cities
Mexico
Tamaulipas
Nuevo
Reynosa
Laredo
General condition of the water
treatment plant
Condition of WTP infrastructure
United States
Texas
Coahuila
Acuña
McAllen
Laredo
Del Rio
1
1
2
1
3
3
4
4
3
3
4
4
Maintenance and repairs
Condition of water analysis
laboratories
Physical condition of the areas or
departments
1
1
3
4
3
4
1
2
2
4
3
4
1
2
3
4
3
4
Personnel by work area
1
2
3
4
3
4
Workplace safety conditions
2
2
2
4
4
4
Operator training
Information sharing among WTP
departments
Has an operations manual
(regulatory, technical aspects;
workplace safety; operator profile,
etc.)
Computerized monitoring of the
processes
Condition of the main system
2
2
3
4
3
4
2
2
3
4
3
4
2
N/A
N/A
4
N/A
3
N/A
1
N/A
2
3
3
4
4
3
3
4
4
Where 1 = Poor; 2 = Minimum; 3 = Good; 4 = Excellent and N/A = Not available
Source: Developed by authors.
Mexican Water Treatment Plants
The qualitative evaluation summarized in Table 3.1 allowed us to determine that the
Acuña (SIMAS) WTP has the best conditions in terms of infrastructure, personnel, and
technical aspects, which allows it to provide good quality water to the population. This is
due, among other things, to the fact that the Acuña WTP was recently built and has
received regular maintenance. In addition, the utility manager took it upon himself to
develop and adapt his own computerized system to control flows and processes in the
plant.
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With respect to the COMAPA-Nuevo Laredo and COMAPA-Reynosa WTPs, in
general the infrastructure has greatly deteriorated due to a lack of preventive measures
and regular maintenance. Even though the personnel has made a great effort both from a
technical (laboratories) and operational (workers) standpoint to keep these plants running,
the lack of financial resources for maintenance has caused serious infrastructure
problems.
U.S. Water Treatment Plants
In the case of the U.S. cities studied and evaluated qualitatively, the McAllen WTP and
the Del Rio WTP have the best conditions for treating the water that they supply to their
population.
In general, it can be noted that all the WTPs in the U.S. cities have made great
efforts in terms of preventive and corrective maintenance and renovations. These actions
are partly the result of the legal provisions established by the Texas Commission on
Environmental Quality (TCEQ), which would impose fines on the utilities otherwise.
Moreover, we can see that these utilities are committed to providing good quality services
to residents, which is reflected in the working conditions and water quality standards that
the WTPs must meet.
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Wastewater Treatment Plants (WWTPs)
Mexican Cities
Similarly, a qualitative evaluation was conducted on the WWTPs in both the Mexican
and the U.S. cities studied (Table 3.2). Of the Mexican plants, the WWTPs in COMAPANuevo Laredo and SIMAS-Acuña are in very good condition. In the case of the Nuevo
Laredo WWTP, this is largely due to the constant supervision of the IBWC
representative, since the plant is binational and its waste discharges must not cause
environmental damage to the Rio Grande.
As for the Acuña WWTP, although information on the physicochemical and
biological parameters was not available, in a visit to the plant we were able to verify the
good working condition of the infrastructure and work areas in general terms (the WWTP
is a concession operated by the company SISSA, S.A., which made obtaining information
difficult). The purpose of this plant is to provide good quality treated water to a power
plant owned by the Mexican Federal Electricity Commission, Comisión Federal de
Electricidad (CFE), for use in its cooling system. This process requires water with
specific characteristics, such as residual chlorine (0.6-1.0 ppm); pH (6-8); suspended
solids (SS) (10-20 ppm); chemical oxygen demand (COD) (30-60 ppm); biochemical
oxygen demand (BOD) (2-10 ppm); and alkalinity (211 ppm). The remainder of the water
treated by the Acuña WWTP is discharged into the Rio Grande. The infrastructure
conditions of the WWTPs are shown in the photographic annex.
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In contrast, the COMAPA-Reynosa WWTP presents serious deficiencies in both
infrastructure and operations. In general, there was a lack of long-term planning and little
interest from previous administrations in investing in preventive and corrective
maintenance and system renovations.
Table 3.2. Qualitative Evaluation of the Wastewater Treatment Plants Visited
Country
State
Cities
Mexico
Tamaulipas
Nuevo
Reynosa
Laredo
United States
Coahuila
Texas
Acuña
McAllen
Laredo
Del Rio
General condition of the
wastewater treatment plant
1
3
3
4
3
4
Condition of infrastructure
1
3
3
4
3
4
Maintenance of infrastructure
1
3
3
4
3
4
Conditions of water analysis
laboratories
2
3
3
3
3
4
Physical condition of the areas
or departments
1
3
3
4
4
4
Personnel by work area
1
3
3
4
4
4
Operator training
2
3
N/A
4
4
4
N/A
2
2
3
3
3
N/A
N/A
N/A
3
3
3
N/A
2
N/A
3
3
3
4
4
4
4
4
4
2
2
2
4
4
4
Information sharing among
WWTP departments
Has an operations manual
(regulatory, technical aspects;
workplace safety; operator
profile, etc.)
Monitoring of processes
Has a parameter reporting form
Workplace safety conditions
Where 1 = Poor; 2 = Average; 3 = Good; 4 = Very good; and N/A = Not available
Source: Prepared by the authors.
WWTPs in the United States
The WWTPs visited in the three U.S. cities had obviously made an effort to maintain and
modernize their facilities (Table 3.2). A clear example is the McAllen WWTP, where
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through medium- and long-term planning plant monitoring has become more technical
and personnel has been trained to detect system failures. The Del Rio WWTP is operated
by a private company, OMI, which is responsible for maintenance, repairs and
adjustments to the plant. This WWTP is in good working order, despite its age
(photographic annex).
In the case of the Laredo WWTP (Zacate Creek), continuous repairs and
maintenance have made it possible to provide uninterrupted service for more than 20
years, with the infrastructure, personnel, and technical aspects all in good working order.
In addition, the plant was undergoing maintenance and repair. Because of time
constraints we could not physically visit the remaining WWTPs in Laredo (Southside,
Laredo Colombia, and Laredo) and only had their operating manuals and photographs for
review; so, we were unable to evaluate the condition of the infrastructure, operations, and
personnel, etc.
2.3.2. Compliance with Standards and Regulations
In Mexico
Official Mexican Standards applicable to drinking water are issued by two government
agencies. The first is the Ministry of Health (SSA), which, in coordination with the
Mexican National Water Commission (CNA), regulates the water supply for human
consumption and use with an adequate level of quality to prevent the transmission of
gastrointestinal illnesses and other water-borne diseases. Secondly, CNA, through the
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National Advisory Committee on Standardization of the Water Sector, issues official
federal standards to ensure the proper use and protection of national water resources.
These standards set forth the provisions, specifications and testing methods that help
guarantee that the products and services offered by water and wastewater utilities meet
the objective of using and managing water properly and efficiently and preserving the
quantity and quality of water (CNA 2008).
Regulations and Standards Applied to Water Quality in Mexican WTPs
The water treatment plants are regulated by SSA standards concerning the supply and use
of water in order to ensure and conserve its quality in the systems until its delivery to the
consumer. These standards include the permissible limits for the microbiological,
physical, organoleptic, chemical, and radioactive characteristics of water. CNA
establishes the official federal standards (CNA NOM) concerning the infrastructure and
technical aspects of providing water services, as well as the conservation of water in
nature. Table 3.3 shows the main water- and health-related SSA NOMs, as well as the
CNA NOMs that govern the technical and service-related requirements that apply to
water utilities.
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Table 3.3 Water Quality Standards for Water Treatment Plants
Institution
Ministry of
Health (SSA)
National Water
Commission
(CNA)
Drinking Water Quality Standards, WTPs
NOM-127-SSA1-1994. (Amended) Environmental health, water for human use and
consumption. Permissible quality limits and required treatment for water to be drinkable.
NOM-179-SSA1-1998. Quality control monitoring and evaluation of water for human use
and consumption distributed by public supply systems.
NOM-012-SSA1-1993. Sanitary health requirements for systems supplying water for
human use and consumption, both public and private.
NOM-013-SSA1-1993. Sanitary health requirements for water tanks on trucks used to
transport and distribute water for human consumption and use.
NOM-014-SSA1-1993. Sanitary health procedures for sampling water for human use and
consumption in public and private supply systems.
NOM-230-SSA1-2002. Environmental health. Water for human use and consumption.
Sanitary health requirements for handling water that must be met by public and private
supply systems. Sanitary health procedures for sampling.
NOM-007-CNA-1997. Safety requirements for the construction and operation of water
tanks.
NOM-002-CNA-1995. Residential hookups to the water supply system. Specifications
and testing methods.
NOM-004-CNA-1996, Requirements for the protection of aquifers during the
maintenance and rehabilitation of water supply wells and for the closing of wells in
general.
NOM-013-CNA-2000. Water distribution systems, specifications for hermitic sealing and
testing methods.
Source: Prepared by authors based on SSA and CNA NOMs.
The Mexican WTPs (Acuña, Nuevo Laredo and Reynosa) operate using a process known
as conventional clarification or complete clarification, which consists of removing
specific pollutants, such as iron, manganese and arsenic, among others. The particles are
forced to settle or flocculate through the application of chemicals or physical processes,
thus facilitating the elimination of pathogenic microorganisms and particles (Table 3.4).
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Table 3.4 Characteristics of the WTPs in the Mexican Cities
State
Coahuila
Municipality
Acuña
Nuevo
Laredo
Tamaulipas
Reynosa
Name of WTP
Cd. Acuña
La Amistad
Central
Southeast
Loma Linda, Plant #1
Plant #3
PEMEX
Rancho Grande
Type of Treatment Process
Conventional clarification
Conventional clarification
Conventional clarification
Conventional clarification
Conventional clarification
Conventional clarification
Direct filtration
Patented clarification
Installed
Capacity (l/s)
350
500
2,000
400
1,500
750
150
40
Source: Prepared by authors based on information provided by the utilities.
l/s = liters per second
It should be noted that the Mexican utilities only provided data for some of the
parameters set forth in NOM 127 SSA1-1994 (pH, temperature, turbidity, residual
chlorine, total alkalinity, total hardness, total dissolved solids, calcium and magnesium).
Using this information, an effort was made to assess the compliance of the three Mexican
cities with both influent and effluent standards.
In general, both the Reynosa (Loma Linda) and Nuevo Laredo (Central) WTPs
are within the limits established under NOM-127-SSA1 for pH, turbidity, chloride (Cl3),
calcium (Ca), magnesium (Mg) and residual chlorine (Cl).
The Acuña WTP (La Amistad) meets the standards for such parameters as pH,
total dissolved solids, turbidity, and total hardness. As for the remaining parameters, we
cannot state that the plant does not comply with them, because we do not have the
information to make that determination. However, one positive factor that should be
noted is that its source of supply or influent is the Amistad reservoir. Holding the water in
the reservoir allows particles to settle. Therefore, when the water reaches the Acuña
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WTP, its level of turbidity has decreased significantly, facilitating the water treatment
process.
Regulations and Standards Applied to U.S. WTPs
In the United States, the main legal instrument for protecting water quality—including
rivers and lakes, as well as the coasts—is the federal Clean Water Act (CWA). This law
is intended to prevent the discharge of pollutants, as well as to achieve standard levels of
water quality that permit such activities as fishing, swimming and direct consumption.
The U.S. Environmental Protection Agency (EPA) is another key figure that establishes
federal water quality standards and is empowered to delegate authority to the states to
regulate the discharge of pollutants. Such is the case in Texas, where by state law the
Texas Commission on Environmental Quality (TCEQ) is responsible for granting
discharge permits and licenses to utilities that provide water services and operate
wastewater treatment systems.
One of the functions of TCEQ is to regularly monitor and evaluate the water
supplied to residents (drinking water) by local utilities, as well as to supervise the quality
of surface water and groundwater (treated water) (TCEQ, 2004a and 2004b).
Specifically with respect to surface water, the utilities in the three U.S. cities
visited (McAllen, Del Rio and Laredo) are mainly required to comply with the
regulations established by EPA and TCEQ.
The following table summarizes the laws applied to the quality of drinking water
in the U.S. cities covered by this study.
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Table 3.5 Regulations that Apply to Drinking Water Quality in U.S. Cities
Institution
TCEQ
Title 30, Part I
Regulations
Texas Commission on Environmental Quality
Chapter 279
279.1-279.13. Water Quality Certification
Chapter 290
Subchapter D. Rules and Regulations for Public Water Systems
Subchapter F. Drinking Water Standards Governing Drinking Water Quality and
Reporting Requirements for Public Water Supply Systems
Chapter 303 Operation of the Rio Grande
Source: Prepared by authors based on TCEQ Rules.
The type of treatment plants and their capacities (Del Rio, McAllen and Laredo) are
detailed in Table 3.6. These cities must comply with the provisions of Chapter 290
(TCEQ). However, because of differences in the technologies used by the WTPs in
McAllen and Del Rio, it was difficult to compare the information provided concerning
physicochemical and biological parameters. Del Rio (San Felipe WTP) has a state-of-theart water treatment system with ultrafiltration membranes consisting of a series of fibers
that eliminate a large quantity of particles as small as 0.1 micrometer, as well as other
organic particles and salts, in addition to pollen, algae, bacteria, viruses, germs, etc., that
might be present in water. Moreover, to ensure proper management of the ultrafiltration
plant, the personnel operating the system had to undergo about one year of training, and
the company that installed the system continues to provide regular supervision in order to
maintain the plant in optimal working order.
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Table 3.6. Characteristics of the WTPs Visited in the United States
State
Texas
City
Name of WTP
Del Rio
San Felipe Spring
Type of Treatment
Process
Ultrafiltration with
membranes
Installed
Capacity (l/s)
797.3
Jefferson
N/A
N/A
Colombia
N/A
N/A
Plant No. 1
Conventional clarification
513.39
Plant No 2
Conventional clarification
31.22
Laredo
McAllen
Source: Prepared by the authors based on information provided by the utilities.
l/s = liters per second
In contrast, the McAllen WTP (North) uses a conventional clarification system. The plant
was built in the 1960’s, but is no less efficient for its age. Steps have been taken to
maintain and upgrade the different operational areas of the plant, allowing it to comply
with TCEQ regulations for drinking water.
For its part, the Laredo utility, like that of McAllen, has striven to comply with
TCEQ regulations by performing maintenance on its WTPs, even in the face of adverse
circumstances—such as changing management and restructuring the system at both the
management and operational level—which has limited its development.
A new plant is currently being built in Laredo, as required by TCEQ regulations
that state when a WTP reaches an operational level of 70%, steps must be taken and
investments must be made to design and construct a new plant.
In general terms, it can be concluded that based on the information provided by
both the Mexican and U.S. utilities, their WTPs comply, to a greater or lesser extent, with
the regulations established in each country. However, there are significant differences in
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the physicochemical and biological parameters that each country uses to determine
drinking water quality (See annex 2).
Regulations and Standards Applied to Mexican WWTPs
In Mexico, WWTPs must comply with the wastewater quality regulations established by
the Mexican Ministry of Environment and Natural Resources (SEMARNAT), which set
the permissible limits for waste discharges in national waters and on national land, as
well as discharges into wastewater collection systems (Table 3.7). In addition, they
provide the permissible limits for wastewater reuse and the disposal of sludge and
biosolids generated by WWTPs. CNA, in turn, is responsible for establishing testing
methods and analyses for the wastewater discharged (SEMARNAT 2008 and CNA
2008).
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Table 3.7. Regulations Governing WWTPs in Mexico
Institution
Ministry of Environment
and Natural Resources
(SEMARNAT)
National Water
Commission (CNA)
Regulation
NOM-001 SEMARNAT-1996. Establishes the maximum permissible limits of
pollutants in wastewater discharges in national waters and on national land.
NOM-002-SEMARNAT-1996. Establishes the maximum permissible limits of
pollutants in wastewater discharges into sewer systems.
NOM-003-SEMARNAT-1997. Establishes the maximum permissible limits of
pollutants for reuse of treated wastewater in public services.
NOM-004 SEMARNAT-2002. Environmental protection. Sludge and biosolids.
Specifications and maximum permissible limits of pollutants for their use and final
disposal.
NMX-AA-003-1980. Wastewater - sampling.
NMX-AA-113-SCFI-1999. Water analysis - detection of helminth eggs. Testing
method.
NMX-AA-004-SCFI-2000. Water analysis - detection of settleable solids in raw
water, wastewater, and treated wastewater. Testing method.
NMX-AA-005-SCFI-2000. Water testing - detection of recoverable grease and oil
in raw water, wastewater, and treated wastewater. Testing method.
NMX-AA-006-SCFI-2000. Water analysis - detection of floating matter in raw
water, wastewater, and treated wastewater. Testing method.
(Continues with other NMX regulations)
Source: Prepared by authors based on the SSA NOMs and CNA NMXs.
The information on quality parameters for the WWTPs visited for this study is
presented in the Table 3.7. The type of process and capacity of each WWTP are shown
in Table 3.8. This information indicates that the Acuña WWTP and Nuevo Laredo
IWWTP are activated sludge-based (secondary treatment) plants. This process is used
after simple sedimentation based on a biological contact process in which living aerobic
organisms and organic solids in sewage are mixed, promoting the aerobic decomposition
of the solids. The efficiency of this process depends on maintaining an appropriate level
of dissolved oxygen throughout the entire process (DSENY 2006). In general, its
effectiveness for eliminating organic matter and pathogenic microorganisms is relatively
high (Tebbutt 2006).
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Table 3.8. Characteristics of the WWTPs in the Mexican Cities
State
Coahuila
Tamaulipas
Municipality
Name of WWTP
Acuña
Cd. Acuña
Nuevo
Laredo
Reynosa
International Wastewater
Treatment Plant
Loma Linda
Type of Treatment
Process
Installed
Capacity (l/s)
Activated sludge
205
Activated sludge
1,360
Stabilization ponds
750
Source: Prepared by authors
l/s = liters per second
The Reynosa WWTP, for its part, has an oxidation-based process using shallow ponds
that normally receive raw wastewater and treat it through a natural stabilization process
under appropriate conditions. This type of treatment is especially well suited for regions
with warm climates, such as Reynosa (ibid.). This process is an inexpensive and very
simple way of treating wastewater and is also effective in removing organic matter and
pathogenic microorganisms.
The visit to the Nuevo Laredo IWWTP and the Acuña WWTP allowed us to
observe that the wastewater infrastructure was in good condition and that the wastewater
management and treatment processes were operating well. In the case of the Nuevo
Laredo IWWTP, this is partly attributed to the fact that the plant must comply with the
agreements contained in IBWC Minute 279, a binational treaty signed in 1989. The
purpose of this treaty is to prevent contamination of the Rio Grande. To that end, the
plant must meet the effluent discharge standards recommended and approved by the
Mexican and United States governments.
The only plant to provide information on the physicochemical and biological
parameters of its influent and effluent was the Nuevo Laredo IWWTP. In general, the
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IWWTP complies with the environmental standards established in the SEMARNAT
NOMs, since the only effluent parameter exceeded in Minute 279 is the permissible
limits for BOD5 (biochemical oxygen demand). Nonetheless, the plant does comply with
the limits established in NOM-001-SEMARNAT-1996.
In the case of the effluent parameter for chemical oxygen demand (COD), the
values exceed NOM-001. Since this parameter indicates the presence of degradable and
non-degradable substances, tests should be run at the end of the IWWTP process.
With respect to the parameters for total suspended solids (TSS), pH (a measure of
the acidity or basicity of a solution) and dissolved oxygen (DO), the reported values are
within federal limits and those established in Minute 279.
As for the management and disposal of biosolids and sludge at the Nuevo Laredo
IWWTP, we can only say that the biosolids generated are characterized as Type A sludge
(urban use with direct public contact during application). For this study, we did not have
access to specific data on this sludge. The Nuevo Laredo IWWTP is storing this waste on
site. It is important to note that the improper management and disposal of biosolids can
cause contamination problems if nutrients seep into the subsoil and groundwater.
The Acuña WWTP is operated under a concession by the private company SISSA
Coahuila, S.A. of C.V. Although we did not have access to data, we were able to obtain
information through interviews and a visit to the WWTP. Based on direct observations,
we determined that the plant is in very good condition in terms of infrastructure and
biosolid management. The biosolids are compacted and disposed of in the municipal
dump. The quality of the effluent must be good, since part of it is sent to the CFE's power
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plant for use in its cooling processes. The rest of the treated water is discharged directly
into the Rio Grande.
With respect to the Reynosa WWTP, we were able to observe that it does not have
trained and knowledgeable personnel who know how the plant operates. Moreover, the
infrastructure is in poor condition, mainly due to a lack of investment in the maintenance
and repair of the plant.
Regulations and Standards Applied to U.S. WWTPs
The State of Texas and the National Pollutant Discharge Elimination System (NPDES)
set pollutant discharge limits for WWTPs. The state government and the NPDES issue
regulations that govern the type, nature, volume, and frequency of discharges specific to
each city. Hence, the federal government, through EPA and state agencies, ensures that
the utilities comply with the water quality standards for a WWTP (Table 3.9). Chapter
309 of TCEQ regulations establishes the limits and location of domestic wastewater
discharges, while Chapter 321 refers to the requirements for disposal of the sludge
generated by WWTPs.
Utilities are required to report any failure in the water treatment process to the
Texas Department of Water Resources (TDWR), EPA, and TCEQ. In addition, they must
take the steps needed to correct the problem, and are fined if they fail to do so. Similarly,
plant managers are required to send a report to EPA within five days after the problem is
detected. The report must describe both the problem and the solution.
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Table 3.9. Institutions and Regulations Governing WWTPs in the United States
Institution
Regulations
Texas Commission on Environmental Quality
TCEQ
Title 30, Part I
Chapter 279. Water Quality Certification
Chapter 303. Operation of the Rio Grande
Chapter 307. Texas Surface Water Quality Standards
Chapter 309. Domestic Wastewater Effluent Limitation and Plant Siting
Chapter 312. Use, disposal and transportation of sludge generated by domestic
wastewater treatment plants.
Source: Prepared by the authors based on information from TCEQ.
The foregoing is considered in the operations manuals of most of the WWTPs visited, the
characteristics of which are shown in Table 3.10 below.
Table 3.10 Characteristics of the WWTPs Visited in the United States
State
City/County
Del Rio
Texas
Laredo
McAllen
Name of WWTP
Silver Lake
San Felipe
North Laredo
Southside
Zacate
South Plant
North Plant
Type of Treatment
Process
Activated sludge
Activated sludge
Activated sludge
Activated sludge
Activated sludge
Activated sludge
Activated sludge
Installed
Capacity (l/s)
51.6
120.9
40.55
N/A
919.8
37,850,000
30,280,000
Source: Prepared by the authors based on information provided by the utilities.
l/s = liters per second
In terms of compliance with the environmental regulations established by TCEQ, the Del
Rio and Laredo WWTPs are within the limits established for pH, total suspended solids,
and residual chlorine. However, the Del Rio WWTP does not meet the standard for
oxygen demand (OD). This fact suggests that a high concentration of dissolved oxygen is
going into the Rio Grande.
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2.3.3. Professionalization and Training
Mexico
In the three Mexican cities covered by this study, the internal regulations for each utility
generally establish the education requirements (some engineering) of the general
manager. For the remaining employees, no education requirements are specified. Instead,
only work experience or in some cases the training needed for employees to change
positions or to be transferred to another work area are indicated (Table 3.11).
In particular, the educational background (in systems engineering) of the general
manager in Ciudad Acuña has influenced the performance of the utility. His background
and private-sector experience helped him to develop a software application to support the
automation of the water distribution process.
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Table 3.11 WTP and WWTP Personnel by Education Level in the Three Mexican Cities
State
Coahuila
City
*Acuña
**Nuevo
Laredo
Tamaulipas
***Reynosa
Type of Plant
WTP and WWTP
WTP
WTP
WTP
WWTP
WTP and WWTP
WTP
WTP
WWTP
WTP and WWTP
WTP
WWTP
WTP and WWTP
WTP and WWTP
WWTP
WTP
WTP and WWTP
WTP and WWTP
WTP and WWTP
Position
General manager
Assistant manager, technical area
Assistant manager, wastewater treatment area
Operator A
Operator B
Assistant manager, water treatment
General manager
Manager, technical area
Head of Water Quality
Head of potable water laboratory
Head of wastewater laboratory
Head of regulations
Head of drinking water plant operations
Head of the treatment plant
Operators
General manager
Technical and operations manager
Wastewater coordinator
Water treatment and storage coordinator
Operators D
Operator C
Pump operator
Education Level
University (Engineering)
University (Civil Engineering)
University (Metallurgical Engineering)
High school
N/A
N/A
University (Engineering)
University (Engineering)
University (Chemistry/Pharmacy/Biology)
University (Chemistry/Pharmacy/Biology)
University (Chemistry/Pharmacy/Biology)
High School (Technical)
University (Engineering)
University (Engineering)
N/A
University (Engineering)
University (Architecture)
University (Engineering)
University (Chemical Engineering)
Secondary and high school
Secondary school
Primary school
Source: Prepared by authors with *information provided by SIMAS; ** information from the COMAPA-Nuevo Laredo website; and information from
COMAPA-Reynosa personnel and website.
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United States
The level of training required for operators is established by TCEQ in Subchapter K
(Sections 30.381, 30.387, 30.390, 30.392, 30.396, 30.398, 30.400 and 30.402), which
indicates the category type and educational level or experience that public water system
operators must have. These professional qualifications resulted in greater efficiency in the
management and operation of the processes in the treatment plants in the three U.S. cities
studied. Licenses are issued and certified by the state and must be renewed annually. If
applicable, the operator is required to pass a test to be promoted to a higher category
(Table 3.12). It should be noted that the highest categories (e.g., A) are associated with
higher salaries.
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Table 3.12 Level of Training Required for Del Rio, McAllen and Laredo (WTP and WWTP)
City
Del Rio
Type of Plant
WTP
Operator License
1 B (surface water)
1 B (groundwater)
3 C (surface water)
1 D (groundwater)
Laredo
McAllen
WTP
WTP
N/A
D
C
B
A
Del Rio
WWTP
1D
1C
2B
1A
D
Laredo
McAllen
WWTP
WWTP
C
1D
2C
2B
1A
Source: Prepared by authors with information provided by the U.S. utilities.
132
Education Level
University
High school
University
High school
High school or equivalent
High school
Equivalent
N/A
High school
Equivalent
High school or equivalent
University
High school
Master's
University
High school
High school
High school or equivalent
University
Master's
University
High school
High school
Equivalent
High school or equivalent
High school
High school or equivalent
University
Master's
University
High school
Experience (years)
1
5
1
5
0
0
0
N/A
0
0
0
1
5
4
5
8
0
0
1
4
5
|
0
0
0
0
0
1
4
5
|
Minimum Hours of Work
100
100
100
100
20
20
40
N/A
20
40
20
100
100
160
160
160
20
20
100
160
160
160
20
40
20
20
20
100
160
160
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Local and Financial Water Management for Urban Use in
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2.3.4. WWTP Sludge Management
For the U.S. cities, sludge management is established in the TCEQ regulations, Chapter
312 (Use, disposal and transportation of sludge generated by domestic wastewater
treatment plants), which stipulates the type of regulations to be followed by each city
based on use or disposal required.
McAllen is the only city that has taken financial and technical steps to dispose of
its sludge as an agricultural fertilizer. To that end, the city classifies its sludge and pays a
company to handle its disposal.
The company treats the sludge and sells it for
agricultural purposes. Del Rio and Laredo dispose of their sludge in municipal dumps in
compliance with the law (Table 3.13).
Table 3.13 Sludge Production and Disposal at the WWTPs in the Cities Studied
City
Plants
Dry Tons per Year
Type of Disposal
Laredo
Zacate Creek
Municipal dump
2007
3,530.7
2006
3,603.8
2005
3,374.1
2004
366.1
2003
3,173
2002
N/A
Del Rio
San Felipe
Municipal dump
N/A
712.3
903.26
903.26
N/A
N/A
South
Agricultural use
1,704.09
1,750
2,349.04
1,658.43
1,072.74
1,905
North
Agricultural use
1,060.04
1,354.17
719.75
1,615.39
1,379.14
1,815.33
McAllen
Source: Prepared by the authors
For the Mexican cities, information on the management, disposal and even the
generation of sludge is unclear. Only in Nuevo Laredo did we find sludge being disposed
of on-site behind the WWTP, since the utility does not have sufficient resources or
interest in putting this waste to better use.
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III. Best Management Practices Identified in the Cities Studied
3.1. Best Practices in Local Management
In reviewing the six cases in question, we grouped the practices identified as successful
based on the variables used to describe and analyze them, namely: (1) the possibilities of
local autonomy, (2) professionalization of the service, (3) transparency in information,
and (4) mechanisms for public participation.
With respect to the first point, two aspects should be noted: the degree of
autonomy in water management enjoyed by utilities in U.S. cities, and the regulations
generated in the case of Mexican cities.
In the U.S. cities, even though utilities appear to depend on the central
government in the organizational chart, with the city manager as an intermediary, in
practice they are really autonomous.
What stands out in the case of Mexico is that, in all of the cities studied, public
water services are regulated, which is a step forward, given the scant attention normally
paid by local governments to this issue.
In terms of good practices in professionalizing the service, we can point to the
high level of training that employees have in the U.S. cities, as well as the hiring and
promotion mechanisms that local governments follow. Even though these practices
depend on another department, they directly affect the results of the departments
responsible for providing water services.
Despite the political variables that come into play in the case of the Mexican
utilities, we can point out that employees at the highest level have a university-level
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education, and managers have engineering degrees. Even though management has had to
learn to negotiate with unions, the top positions are held by university graduates.
In COMAPA-Nuevo Laredo it is also worth noting that the training coordination
unit reports directly to the manager. This area identifies courses that could be useful for
the utility's employees and sets priorities based on the available budget. Given the need
for ongoing training in these areas, this is a good practice that could be replicated in other
utilities.
The issue of transparency in information and customer communications is
addressed in different ways by the utilities in question. Among the U.S. cities, McAllen
stands out with respect to the information presented via Internet, because of the ways in
which it communicates with customers and handles meetings of the Board and the Water
Services Committee.
In this respect, SIMAS-Acuña stands out among the Mexican cities, since it
publishes the salaries of its employees and the audits that have been performed. Of the
three cases, it is the only one that makes this information available. Nuevo Laredo,
however, provides information on user fees.
Other noteworthy forms of communication are the water culture programs
implemented by the municipal governments. Among them, we can highlight the case of
Nuevo Laredo, which has the most well-established program. It has generated a
considerable amount of materials, including a series of data and games for children that
can even be accessed on the Internet.
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The other noteworthy form of communication, because of the attention given to
customers, is the coordination unit CIAC in Reynosa, which provides a degree of
mediation between the different utility departments and local citizens. Although it is not
yet possible to evaluate CIAC's impact, it provides support for regular customers by
helping them direct their complaints to the right party when they do not know who to
contact.
With respect to public participation, the U.S. cities are noteworthy, especially
McAllen and Del Rio, with their respective citizen committees to support the water
utilities. This group of residents is invited to take part in the decision-making process.
Their meetings are open to the public and, in the case of McAllen, the minutes from these
meetings can be consulted on its webpage. In this case there is both transparency in
information and public participation in the decision-making process.
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3.2. Best Practices in Financial Management
This section identifies the best financial practices based, not on the values estimated and
reported in Section 2.2, but on the potential for improvement gleaned from the financial
sustainability of the utilities studied. These are not the practices identified as ideal in the
literature on this topic, but rather those that we actually found to have been implemented
in the utilities on Mexico's northeast border with the United States.
With respect to strategic business planning, which we consider a key element of
proper financial management, we identified the following practices:
-
Systematically implementing annual plans for preventive maintenance and capital
improvements. Although ideally utilities should have a master plan that reflects
the operational planning of water service for periods of five to twenty years, in
practice the utilities with the best maintenance and operational results implement
annual preventive maintenance plans (MPU in McAllen, SIMAS in Acuña).
-
Including debt service costs in annual financial planning and separating external
contributions from net income. This practice allows SIMAS-Acuña to be realistic
when evaluating its annual financial situation and to maintain a stable financial
position. This practice is common in the U.S. utilities since bonds serve as their
main source of infrastructure financing.
-
Linking the planning of water infrastructure needs with plans for urban
development. This practice was found mainly in McAllen and Del Rio. Linking
the annual financial planning of the utility and the city helps reduce the need for
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improvisation that may result when infrastructure growth follows behind urban
sprawl.
-
Linking technical planning with a capital improvement plan. This practice has
allowed the McAllen MPU and SIMAS-Acuña to adjust their finances to
infrastructure needs, even without an updated master plan.
Traditionally, financial indicators have been used for benchmarking among utilities. This
study suggests that, in addition to being used for comparative purposes, these indicators
can also help improve the financial sustainability of the utility:
-
Developing an analysis of financial indicators exclusively for water services
allows the utility (and city management) to evaluate the real status of the water
services. The McAllen MPU was the only utility that had a specific financial
analysis of the financial operation of water services, in addition to balance sheets
and income statements.
-
Publishing balance sheets, itemized income statements and audits on the Internet
with current data was one of the best practices that we found at SIMAS-Acuña.
Public access to detailed financial information helps customers understand the
utility's situation and can promote trust and improve their willingness to pay for
the service.
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Commercial efficiency is considered a key factor in the financial sustainability of
utilities. Both the rate structure and the collection rate reflect specific activities in the
commercial department. This study identifies the following as best practices:
-
The business approach to water services in the United States allows utilities to
require a deposit from new customers when they contract the services, which
helps ensure that they will be able to recover past-due payments (MPU and
LWUD).
-
The effective collection of disconnection and late payment fees has helped reduce
uncollectable past-due payments and maintain high collection rates in the
McAllen and Del Rio utilities, and, to a lesser degree, in SIMAS-Acuña.
-
Rate adjustments with sustained increases based on an external study that includes
future investment needs has enabled Laredo LWUD to implement a much needed
reorganization process after a negative experience with private participation.
-
Updating the customer database helped SIMAS Acuña reduce the number of
delinquent accounts to a manageable level.
-
Simplifying the rate structure and the effective collection of payment for water
services, without exception (including public buildings and officials), has made it
possible for SIMAS-Acuña to increase its revenue from services.
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3.3. Best Practices in Managing Water and Wastewater Quality
Some of the practices identified for improving water quality followed by both Mexican
and U.S. utilities are:
-
At the Nuevo Laredo and Reynosa utilities, despite significant limitations and
deficiencies in infrastructure, the personnel has drafted proposals to modify,
upgrade and even adapt working conditions in order to improve the quality of the
water and the services provided by the utilities.
-
At SIMAS-Acuña, there have been initiatives to upgrade, adapt, and develop a
computerized water distribution system.
-
In Del Rio we can highlight the decision of the city and the Water Utility
Department to make a major investment in an ultrafiltration water treatment
system. This technology has also required a major effort from the WTP
operational personnel who had to obtain technical training to operate the system—
for example, in repairs or contingencies that might arise with this type of
ultrafiltration system.
-
The McAllen utility provides ongoing training to plant operators (even
diversifying their duties) so that they may become familiar with most of the plant
processes and procedures.
-
Upgrading and improving the computerized systems in the McAllen utility
allowed it to monitor its water treatment processes.
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IV. Final Note and Recommendations
This study is an initial attempt to analyze the management of water services on both sides
of the U.S.-Mexico border. Although there are substantial differences in the legal,
institutional, regulatory, social and political frameworks of the two countries that make
comparisons difficult, the objectives of the study have been met. In spite of the
importance of border cities, little is known about the performance of local administrations
in this region. In the case of water, the task is complex since we are dealing with the same
supply source, which could potentially lead to forms of coordination or cooperation on
specific aspects of water management for urban use.
The different approaches to managing water services on the two sides of the
border allow us to learn from those experiences, especially in the area of water services.
For example, one possibility identified is sharing experiences on the ways in which
collections are managed.
With respect to water quality, this type of work is important because the border
region urgently needs to establish not only quality standards but also ways of recording
and sharing information in a timely manner, so that cities on both sides of the border
know the status of their shared water.
This section outlines some recommendations that are considered important
elements of the different components analyzed and which are necessary to improve the
management and performance of water services.
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4.1. Local Management
Among the recommendations that may be made for more efficient management in the
areas indicated, we found:
-
With respect to professionalization, create mechanisms to identify the needs of the
utilities and existing training options. In the case of Mexico, an effort should be
made to establish a professional profile for middle and top management and to
apply them effectively.
With respect to the transparency and accessibility of information:
-
In the case of Mexico, consistency in the content of the webpages would be
desirable, for although the utilities allocate part of their budget for this purpose,
the results have varied. An effort could be made to post appropriate information,
taking into account the types of customers that each utility has.
-
In Mexico, the water utilities could evaluate the results of their water conservation
programs using specific indicators to determine if the activities undertaken are
adequate. Water conservation programs have strong development potential, if
sufficient attention and resources are devoted to them.
-
CIAC has also proven to be a novel way for the water utility to communicate with
customers. This unit could establish more specific evaluation indicators and share
this information with other utilities.
-
In addition, we recommend seeking other means of communication with
customers, such as newspapers, brochures, moving advertisements (on vehicles),
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as well as expanding the water conservation program to target other sectors, such
as senior citizens, housewives, and companies, since it is currently only aimed at
children.
Several issues need to be addressed regarding participation in Mexico:
-
The Boards of Directors need to make the information that they generate more
transparent. For example, one item that can be difficult to access is the directory
of the members of these boards, which in theory are the highest decision-making
bodies of the water utilities. However, regular customers do not know who sits on
these boards, nor the types of decisions that they make.
-
Another recommendation concerning the boards is to evaluate the mechanisms for
calling for the election of the public members of the Boards. A broader invitation
would be desirable, as well as incorporating other members of the community,
such as the academic sector.
-
Moreover, the information generated by these Boards needs to be more
transparent, since it involves agreements and resolutions that should be made
public. To date no utility has a provision allowing public access to this kind of
information.
-
Lastly, the performance of these committees and other public participation bodies
in public services and water utilities needs to be evaluated to determine if they are
really functioning as such or if they are just straw figures created to give the
appearance of participation.
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4.2. Financial Management
Some general recommendations that can be made regarding financial management as a
result of observations in the cities covered by this study are:
-
Long-term planning (for example, 20 years) is not necessarily the most feasible
type of planning for places such as the border with its dynamic population growth
and varying scenarios of urban growth rates and trends. In practice, medium-term
financial planning (three to five years) that includes preventive maintenance costs
may be more effective.
-
Encourage greater involvement of the financial areas in the management of the
utilities (above all in Mexican cities), especially in the medium-term planning of
financial needs (e.g., developing a cost plan for rehabilitating infrastructure,
systems, etc.)
-
Increase autonomy in the financial management of utilities (e.g. rate proposals
justified on technical grounds, determining the real cost of water production, etc.)
-
More detail in the balance sheets and income statements of the utilities is needed
in order to analyze their real financial situation. A mechanism for realistic
analyses could be to require the publication of annexes in which the different
financial categories are broken down or, better yet, an independent analysis
(external auditor) of those indicators. The financial analysis should be carried out
with ongoing annual indicators within a company and not by comparing them to
those of other utilities or to benchmarks.
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Local and Financial Water Management for Urban Use in
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-
Look into the possibility of financing wastewater treatment plants through private
participation, and consider financial sustainability based on the reuse or sale of the
treated water.
-
To prevent dependencies that might have a perverse affect on urban development
or the environment, we suggest avoiding cross-subsidies and reducing the
financial dependence on one type of user or urban developers.
4.3. Water Quality Management
-
Establish a training and certification system for treatment plant operators in
Mexican cities, in keeping with a prior evaluation of their abilities.
-
Have the utilities develop a report with a uniform and simplified format to
facilitate information sharing, as well as publish the reports regularly on the
Internet so that the general public can find out the quality of the water they are
receiving.
-
Coordinate regular meetings of WTP personnel to discuss operational problems
and their possible solutions.
-
Encourage fluid and ongoing communication among the water and wastewater
treatment plant departments in order to increase the efficiency and effectiveness
of treatment of both drinking water and wastewater.
-
Provide information to plant operators and workers concerning the regulations
and standards that each type of plant must meet.
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Local and Financial Water Management for Urban Use in
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-
Create departments with personnel trained in developing, implementing and
regularly evaluating the water conservation programs provided for residents (in
the case of Mexican cities).
-
Encourage efficient ways of handling customer complaints and monitor the results
of these efforts, as well as responses to customers.
-
Have a WTP operations manual, or develop one if it doesn’t exist, that contains
infrastructure requirements, processes, standards, minimum required personnel,
equipment, safety measures, etc.
-
Develop guidelines for operators for each type of treatment plant. These guides
should be included with the documentation provided to new employees or when
there is a change in management.
-
Adopt a waste-to-energy (biogas) process for sludge that will allow the utility to
become self-sufficient in energy; in other words, consider the biogas generated by
the anaerobic digestion of sludge as a source of energy.
-
Provide for the comprehensive management of bio-solids and sludge in
accordance with NOM-004 SEMARNAT-1994
-
Establish a certification committee that will not only certify treatment plant
operators and personnel, but will also offer training courses to prepare for exams
that cover specific positions within the utility.
-
Develop position descriptions for each job in the treatment plants, for which
appropriate aptitude tests will be required based on the position in question.
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Local and Financial Water Management for Urban Use in
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Annexes
Annex 1. Description of Water Charges by City
SIMAS-Acuña
Usage amounts (gal)
0
1,321
2,643
3,694
5,020
5,284
7,926
13,209
19,813
26,418
39,626
52,835
1,320
2,642
3,693
5,019
5,283
7,925
13,208
19,812
26,417
39,625
52,834
2,641,464
Water rate (pesos)
2.800
2.380
2.200
2.100
3.502
3.752
4.015
4.399
4.846
5.312
5.974
6.772
Amounts 0 to 1,320 gal have an additional charge of 30 pesos
Retirees pay 30 pesos (minimum)
20% Sewer base rate
0 % Taxes ( water service )
0 % Taxes ( Sewer)
10% Wastewater treatment fee
Source: SIMAS-Acuña
149
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
COMAPA-Nuevo Laredo
Usage amounts
(gal)
Water charge
(pesos)
Usage amounts
(gal)
Water charge
(pesos)
0-1,320
25.73
132,087-145,295
10.78
1,321-2,641
36.43
145,296-158,503
11.48
2,642-5,283
3.85
158,504-171,712
12.18
5,284-7,925
4.06
171,713-184,921
12.88
7,926-10,567
4.27
184,922-198,129
13.58
10,568-13,208
4.48
198,130-211,338
14.28
13,209-15,850
4.83
211,339-224,547
14.98
15,851-18,492
5.18
224,548-237,755
15.68
18,493-21,133
5.53
237,756-250,964
16.38
21,134-23,755
5.88
250,965-264,172
17.08
23,756-26,417
6.23
264,173-290,590
17.78
26,418-31,700
6.58
290,591-317,007
18.48
31,701-36,984
6.93
317,008-343,424
19.18
36,985-42,267
7.28
343,425-369,842
19.88
42,268-47,551
7.63
369,843-369,259
20.58
47,552-52,834
7.98
369,260-422,676
21.28
52,835-66,043
8.33
422,677-449,093
21.98
66,044-79,251
8.68
449,094-475,511
22.68
79,252-92,460
9.03
475,512-501,928
23.38
92,461-105,669
9.38
501,929-528,345
24.08
105,670-118,877
9.73
≥ 528,346
24.08
118,888-132,086
10.08
+ 40% Sewer
Source: COMAPA-Nuevo Laredo
150
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
COMAPA-Reynosa
Usage amounts
(gal)
Water
charge
Water and sewer
charge (pesos)
Usage amounts
(gal)
Water charge
(pesos)
Water and sewer
charge
0-1320
11.25
16.20
13737-14001
259.7
373.96
1321-1585
16.2
23.32
14002-14265
264.6
381.02
1586-1849
18.9
27.21
14266-14529
269.5
388.08
1850-2113
21.6
31.1
14530-14593
274.4
395.13
2114-2377
24.3
34.99
14594-15057
279.3
402.19
2378-2641
27
38.88
15058-15322
284.2
409.24
2642-2905
34.65
49.89
15323-15586
289.1
416.3
2906-3170
37.8
54.43
15587-15850
294
423.36
3171-3434
40.95
58.96
15851-16114
323.3
465.55
3435-3698
44.1
63.5
16115-16378
328.6
473.18
3699-3962
47.25
68.04
16379-16642
333.9
480.81
3963-4226
50.4
72.57
16643-16907
399.2
488.44
4227-4490
53.55
77.11
16908-17171
344.5
496.08
4491-4755
56.7
81.64
17172-17435
349.8
503.71
4756-5019
59.85
86.18
17436-17699
355.1
511.34
5020-5283
63
90.72
17700-17963
360.4
518.97
5284-5547
75.6
108.86
17964-18227
365.70
526.6
5548-5811
79.2
114.04
18228-18492
371
536.24
5812-6075
82.8
119.23
18493-18756
404.7
582.76
6076-6340
86.4
124.41
18757-19020
410.4
590.97
6341-6604
90
129.6
19021-19284
416.1
599.18
6605-6868
93.6
134.78
19285-19548
421.8
607.39
6869-7132
97.2
139.96
19549-19812
427.5
615.6
7133-7396
100.8
145.15
19813-20077
433.2
623.8
7397-7661
104.4
150.33
20078-20341
438.9
632.01
7662-7925
108
155.52
720342-20605
444.6
640.22
7926-8189
125.55
180.79
20606-20869
450.3
648.43
8190-8453
129.6
186.62
20870-21133
456
656.64
8454-8717
133.65
192.45
21134-21398
494.1
711.5
8718-8981
137.7
198.28
21399-21662
500.2
720.28
8982-9246
141.75
204.12
21663-21926
506.3
729.07
9247-9510
145.8
209.95
21927-22190
512.4
737.85
9511-9774
149.85
215.78
22191-22454
518.5
746.64
9775-10038
153.9
221.61
22455-22718
524.6
755.42
10039-10302
157.95
227.44
22719-22983
530.7
764.2
151
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
10303-10566
182
233.28
22984-23247
536.8
772.99
10567-10831
184.5
265.68
23348-23511
542.9
781.77
10832-11095
189
272.16
23512-23775
549
790.56
11096-11359
193.5
278.64
23776-24039
591.5
851.76
11360-11623
198
285.12
24040-24303
598
861.12
11624-11887
202.5
291.6
24304-24568
604.5
870.48
11888-12151
207
298.08
24569-24832
611
879.84
12152-12416
211.5
304.56
24833-25096
617.5
889.2
12417-12680
216
311.04
25097-25360
624
898.56
12681-12944
220.5
317.52
25361-25624
630.5
907.92
12945-13208
225
324
25625-25888
637
917.28
13209-13472
249.9
359.85
≥ 25889
643.5
926.64
Source: COMAPA-Reynosa
City of Del Rio
Water service
Usage amounts
Up to 3,000 gals
More than 3,000 gals
Sewer
Charge (USD)
$8.90
$2.77 per 1,000 gals
Usage amounts
Up to 3,000 gals
More than 3,000 gals
Charge (USD)
$8.19
$ 2.49 per 1,000 gals
Source: Prepared by the authors using information provided by the City of Del Rio, Ordinance Code 2006-
032.
152
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Laredo Department of Water
Water
Per extra thousand gallon (Dls.)
$ 7.50*
$ 1.29
$ 1.38
$ 1.44
$ 1.53
$ 1.62
$ 1.69
$ 3.38
Sewer
$ 8.50*
$ 1.03
$ 1.08
$ 1.14
$36.89**
Usage amounts
 2,000
2,001 to 4,000
4,001 to 10,000
10,001 to 20,000
20,001 to 30,000
30,001 to 40,000
40,001 to 50,000
 50,000
 4,000
4,001 to 10,000
10,001 to 20,000
20,001 to 30,000
 30,000
* Usage charge per 1,000 gallons
**The maximum charge will be up to 30,000 gallons and the equivalent of 36.89 per
month.
Source: Prepared by the authors using information provided by the City of Laredo,
Ordinance Code 31.
McAllen Public Utility
Water
Water base rate
Sewer
$4.00
Sewer base rate
$9.00
0- 20,000 gals
$ 1.30 per 1,000 gals
Residential
$ 1.30 per 1,000 gals
20,001 gals
$ 1.60 per 1,000 gals
Commercial
$ 1.30 per 1,000 gals
Source: Prepared by the authors using information provided by the City of McAllen, Ordinance Code
1966.
153
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Annex 2. Water Quality Standards for Water and Wastewater Treatment Plants
Type
OC
OC
R
IC
IC
IC
OC
IC
OC
OC
IC
R
SD
IC
OC
OC
D
OC
D
D
SD
OC
IC
IC
M
M
M
IC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
OC
IC
M
OC
SD
154
Pollutant
Acrylamide
Alacor
Gross alpha particle activity
Antimony
Arsenic
Asbestos
Atrazine
Barium
Benzene
Benzo(a)pyrene
Beryllium
Emissions of beta and photons particles
Bromate
Cadmium
Carbofuran
Carbon tetrachloride
Chloramines (como Cl2)
Chlordane
Chlorine (Cl2)
Chlorine dioxide (ClO2)
Chlorite
Chlorinated Benzene
Chromium (total)
Copper
Cryptosporidium
Fecal coliform and E. Coli
Total Coliforms
Cyanide (free cyanide)
2,4-D
Dalapon
1,2 Dibromo-chloro-propane
o-Dichlorobenzene
p- Dichlorobenzene
1,2-Dichloroethane
1-1-Dichloroethylene
cis-1,2- Dichloroethylene
trans-1.2- Dichloroethylene
Dichloromethane
1-2-Dichloropropane
Adipate di-2 (2-ethyl hexyl)
Phthalate di (2-ethyl hexyl)
Dinoseb
Dioxin (2,3,7,8-TCDD)
Diquat
Endotal
Endrin
Epichlorohydrin
Ethylbenzene
Ethylene dibromide
Fluoride
Giardia lamblia
Glyphosate
Haloacetic Acids
México, NOM
(Permissible Limit mg/L)
N/A
N/A
N/A
N/A
0.05
N/A
N/A
0.7
N/A
N/A
N/A
N/A
N/A
0.005
N/A
N/A
N/A
0.3
0.2 - 1.5
N/A
N/A
N/A
0.05
2
N/A
2
0.07
50
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.5
N/A
N/A
N/A
United States, TCEQ
(Permissible Limit mg/L) or
permissible units
N/A
0.002
15 pCi/l
0.006
0.01
7 MFL
0.003
2
0.005
0.0002
0.004
4 mrem/year
0.01
0.005
0.04
0.005
4
0.002
4
8
1
0.1
0.1
AL=1.3
1 CCR units
0 CCR units
0 MCLG
0.2
0.07
0.2
0.0002
0.6
0.075
0.005
0.007
0.07
0.1
0.005
0.005
0.4
0.006
0.007
0.00000003
0.02
0.1
0.002
N/A
0.7
0.00005
4
0.7
0.06
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
OC
OC
M
OC
OC
IC
M
Heptachlor
Heptachlor epoxide
Heterotrophic bacteria plate counting
Hexachlorobenzene
Hexachlorocycloethane
Lead
Legionella
Lindane
IC
Mercury
OC
Methoxychlor
IC
Nitrate
IC
Nitrite
OC
Oxamyl
OC
Pentachlorophenol
OC
Picloram
OC
Polychlorinated biphenyls
R
Radium 226 and Radium 228 (combined)
IC
Selenium
OC
Simazine
OC
Styrene
OC
Tetrachlorethylene
IC
Thallium
OC
Toluene
SD
Total Trihalomethanes
OC
Toxaphene
OC
2,4,5-TP (Silvex)
OC
1,2,4-Thrichlorobenzene
OC
1,1,1-Trichloroethane
OC
1,1,2-Trichloroethane
OC
Trichloroethylene
OC
Turbidity
R
Uranium
OC
Vinyl Chloride
M
Viruses (enteric)
OC
Xylenes
IC
Cuprum
OC
Total hardness (CACO3)
OC
Phenols
IC
Iron
OC
Manganese
OC
Ammoniac nitrogen
Pesticides in microorganisms /l: Aldrin y
OC
dieldrin
DDT
R
Alpha/photons emitted
OC
Gamma-HCH (lindane)
OC
Sodium
OC
Total dissolved solids (TDS)
OC
Sulfates
OC
SAAM
OC
Zinc
Nomenclature and units
OC
Organic chemical
IC
Inorganic chemical
M
Microorganisms
R
Radioactive
SD
Subproduct of disinfection
0.03
0.03
N/A
0.01
N/A
0.025
N/A
N/A
0.001
N/A
10
0.05
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.2
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0.2
500
0.001
0.3
0.15
0.5
0.03
1
N/A
2
200
1000
400
0.5
5
0.0004
0.0002
N/A
0.001
0.05
0.15
0.0002
0.002
0.04
10
1
0.2
0.001
0.5
0.0005
5 pCi/l
0.05
0.004
0.1
0.005
0.002
1
0.1
0.003
0.05
0.07
0.2
0.005
0.005
N/A
30 ug/L
0.002
10
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
15 pCi/l
N/A
N/A
N/A
N/A
N/A
N/A
MFL= millions of fibers per litre
pCi/L=picocuries per litre
MCL= Maxim level of pollutant
MCLG= Maxim level permissible of pollutant
ug/l= nanograms per litre
Source: Jiménez C. 2005. LA CONTAMINACION EN MEXICO [ Pollution in Mexico]
155
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
Photographic Annex
a) Nuevo Laredo , Tamaulipas
Nuevo Laredo Water Treatment Plant
Nuevo Laredo Wastewater Treatment Plant
156
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
b) Reynosa, Tamaulipas
Reynosa Water Treatment Plant
Reynosa sewage treatment lagoon
157
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
c) Ciudad Acuña, Coahuila
La Amistad Dam
Ciudad Acuña Wastewater Treatment Plant
158
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
d) Laredo, Texas
Laredo Water Treatment Plant
Laredo Wastewater Treatment Plant
159
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
e) McAllen, Texas
McAllen Southwest Water Treatment Plant
McAllen sewage treatment lagoon
160
Local and Financial Water Management for Urban Use in
the U.S.-Mexico Border
f) Del Rio, Texas
Del Rio Water Treatment Plant
Del Rio Wastewater Treatment Plant
161