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 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

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Local and Financial Aspects of Urban Water Management forSix Cities at the U.S.-Mexico Border

2009

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Local and Financial Aspects of

Urban Water Management for SixCities at the U.S.-Mexico Border 

*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.

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

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ii

Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

Table of Contents

  Preface    Executive Summary    Introduction  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 12 

2.1. Local Management 12 2.1.1. Legal Framework Governing Water  14 2.1.2. Professionalization of the Service 34 2.1.3. Transparency in Information 45 2.1.4. Public Participation Mechanism 50 

2.2. Financial Management of Water Services 63 2.2.1. Strategic Business Planning for Water Services 64 2.2.2. Financial Indicators 75 2.2.3. Commercial Efficiency 84 2.2.4. Financial Sustainability 100 

2.3. Management of Water Quality 108 2.3.1. Infrastructure Maintenance and Improvement  111 2.3.2. Compliance with Standards and Regulations 116 2.3.3. Professionalization and Training 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   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 inthe U.S.-Mexico Border

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) 132Table 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 inthe U.S.-Mexico Border

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 inthe 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 inthe 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

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

 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

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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

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Local and Financial Water Management for Urban Use inthe 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 whogranted us interviews and helped us carry out the field work for this project.

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Local and Financial Water Management for Urban Use inthe 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.

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Local and Financial Water Management for Urban Use inthe 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 thatin the latter case water service operations are provided in different ways: as a department of the localgovernment, as an area of the local public service department, etc.3 II Conteo de Población y Vivienda (II Population and Housing Count), Mexican national statisticsinstitute, INEGI, 2005.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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 inthe U.S.-Mexico Border

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 inthe U.S.-Mexico Border

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 forfederalism and municipal development), 2005. Enciclopedia de los Municipios de México (Encyclopedia of Mexican Municipalities).6 Texas State Data Center.

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Local and Financial Water Management for Urban Use inthe 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.8 City of Del Rio, 2002.9 U.S. Census Bureau, www.census.gov.

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Local and Financial Water Management for Urban Use inthe 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.

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12

Local and Financial Water Management for Urban Use inthe 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

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13

Local and Financial Water Management for Urban Use inthe 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.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

 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.

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15

Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

EXECUTIVE

Mexican Constitution Art. 27 y 115 fracc. III.

Mexican Ministry of Environmental and

Natural Resources

(SEMARNAT)

SEMARNAT Internal Ordinances

National Water Law

National Water Law Ordinances

NOM SEMARNAT

National Water Commission

(CNA)Water Sector Oficial Rules

CNA Internal Ordinances

MEXICAN MINISTRY OF

HEALTH

Health General LawArt. 118 fracc. VI, Art. 119

fracc. II, Art. 121, 122 y 457NOM SSA

NATIONAL WATER LAW

CNA State DivisionBASIN

ORGANIZATIONS

STATE GOVERNMENT

State Water and Wastesater

Treatmetn Law

State Water CommissionInternal Odinances

State Water and

Wastewater TreatmentComission

MUNICIPALITIES

City Council: UtilityOrdinances

UTILITY(COMAPA. SIMAS)

FEDERAL

CONGRESS

LOCAL

CONGRESS

State Development Plan

MunicipalDevelopment

Plan

Federal Attorney's Officeof Consumer (PROFECO)

Water and

WastesaterTreatment Section

UTILITY ADVISORYCOUNCIL

Source: Author’s own design

Graph 1.1 – General Structure of Legal Framework for Water in Mexico

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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 atwww.cila.org.mx

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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, treatmentand disposal of wastewater will be the responsibility of the

municipalities, which may provide them individually or incoordination or partnership with each other, in accordancewith the law and other applicable provisions. Thesemunicipal public services may also be provided throughdecentralized agencies or government-run entities establishedin accordance with the provisions set forth in the MunicipalCode for the state of Coahuila.Concessions for the provision of these services may begranted by city governments to individuals or legal entities,in accordance with the provisions set forth in the MunicipalCode 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)

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Local and Financial Water Management for Urban Use inthe 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.‖ 

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Local and Financial Water Management for Urban Use inthe 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)‖.

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Local and Financial Water Management for Urban Use inthe 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, inits capacity as a municipal fiscal authority, the fees for theservices that it provides, in accordance with the State Fiscal

Code, Municipal Code, Municipal Revenue Law, and otherrelevant municipal fiscal laws. The public service will complywith the principles of generality, continuity, regularity,uniformity, quality, efficiency, and coverage to meet the demandof different users, promoting the actions necessary to achievefinancial 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 professionalizationfor its employees through efficiency and management quality plansaimed at improving their level of training, in accordance with theprograms approved by the board of directors and proposed by thegeneral 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).

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22

Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

Graph 1.2 provides a broad description of local management in the three Mexican

cities studied.

Federal Government State Government

City Council

City Mayor

COMAPA/

SIMAS

Advisory CouncilCity Mayor

UtilitiesDepartment

 

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

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23

Local and Financial Water Management for Urban Use inthe 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

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Local and Financial Water Management for Urban Use inthe 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.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

Clean Water Act

US Environmental

Protection Agency(EPA)

Texas Commissionof Environmental

Quiality(TCEQ)

Texas Groundwater

ProtectionCommittee (TGPC)

Texas Water

DevelopmentBoard

(TWDB)

Texas Water

Code

Surface Water Groundwater

City Council

City Mayor

City Manager

UtilitiesDepartment

Citizen

Boards

Texas State Solidand Water

Conservation

Board(TSSWCB)

City Code

Special Districts

StateGovernment

 

Source: Author’s own design 

Graph 1.3 – Scope of Local Water Management in Texas

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Local and Financial Water Management for Urban Use inthe 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:

  City manager

  City attorney

  City clerk 

  Municipal court judge(s)

  Fire chief 

12 Hereinafter, "the Council."

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Local and Financial Water Management for Urban Use inthe 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;

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Local and Financial Water Management for Urban Use inthe 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.

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

Federal Government State Government

City Manager

Utilities Department

Citizen boards(1)

City Mayor

City Council

 

(1) In Del Rio this function is performed by the Utilities Commission and inMcAllen 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.

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Local and Financial Water Management for Urban Use inthe 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

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Local and Financial Water Management for Urban Use inthe 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."14 The sources of information for this section are an interview with the representative of the MexicanSection of the International Boundary and Water Commission (IBWC) in Nuevo Laredo, as well as thewebpages of the IBWC, the Border Environment Cooperation Commission (BECC), and the NorthAmerican Development Bank (NADB).

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Local and Financial Water Management for Urban Use inthe 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.

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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

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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.

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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.

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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

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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,

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(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

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Local and Financial Water Management for Urban Use inthe 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.

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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 utility-

level 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.

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Local and Financial Water Management for Urban Use inthe 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 andwastewater treatment plant employees receive.18 This position was vacant when the fieldwork was conducted between March and April 2008.

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Local and Financial Water Management for Urban Use inthe 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.

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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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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

 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 e-

mail 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 Annex2.1.5.

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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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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-of-

attorney 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, legalcounsels, associations, labor, unions — in other words, the entire production line involved in theconstruction 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 inconstruction and teach courses.

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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 havebeen held to date. There is information to the effect that in the previous administration this board, which isprescribed by law, did not work.25 The current chair of the Council of Institutions was the president of District Agricultural Board No. 154for three years.26 This organization is formed by the city's productive agencies. It has a meeting hall where it meets once amonth 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 thecity. 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 SIMAS-

Acuña 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 haslowered service quality as well as provoked disputes with employees who had decided to remain with thecompany.

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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 72-

hour 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 small-

business 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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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 10-

year 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 five-

year 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 2004-

2005). 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 externalcontributions)

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/totalannual 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 annualoperating 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 incomestatement.

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 /totalannual 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 annualoperating costs)*100

22% 26% N/A

(Electricity costs / annual operatingcosts)*100

5% N/A N/A

(1) For fiscal year October 2006-September 2007.(2) In U.S. dollars.N/A: Not availableSource: Developed by the authors based on information provided by the U.S. utilities.

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 m

3pay 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 untilSeptember 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

CiudadAcuña

NuevoLaredo

Reynosa

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

High consumption level (m3) 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

(1)  Price per cubic meter extra; average water usage for a household of four in the region studied is

estimated at 30 m

3

.(2)  Fixed price at this usage levelSource: 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 SIMAS-

Acuña 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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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

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 0 0 4.00Maximum consumption in lowest block (gal.) 3,000 2,000 1,000

Minimum block rate $8.90 $7.50 $1.30

Rate for every 1,000 gal. extra consumed $2.77(2) $1.38(3) $1.30(4) 

Wastewater service rate for minimum consumption $8.19 $8.50 $10.30

Wastewater rate for every 1,000 gal. of water consumedin excess of minimum consumption

$2.49 $1.03 $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; andMcAllen 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 past-

due 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, COMAPA-

Reynosa 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 Mexico United States

State Tamaulipas Coahuila Texas

Criteria/Cities ReynosaNuevo

LaredoAcuña McAllen Laredo Del Rio

General condition of the watertreatment plant 1 2 3 4 3 4

Condition of WTP infrastructure 1 1 3 4 3 4

Maintenance and repairs 1 1 3 4 3 4Condition of water analysis

laboratories 1 2 2 4 3 4Physical condition of the areas or

departments 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 2 2 3 4 3 4Information sharing among WTP

departments 2 2 3 4 3 4Has an operations manual

(regulatory, technical aspects;workplace safety; operator profile,etc.) 2 N/A N/A 4 N/A 3

Computerized monitoring of theprocesses N/A N/A 3 4 3 4

Condition of the main system 1 2 3 4 3 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 COMAPA-

Nuevo 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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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 Drinking Water Quality Standards, WTPs

Ministry of Health (SSA)

NOM-127-SSA1-1994. (Amended) Environmental health, water for human use andconsumption. Permissible quality limits and required treatment for water to be drinkable.

NOM-179-SSA1-1998. Quality control monitoring and evaluation of water for human useand consumption distributed by public supply systems.

NOM-012-SSA1-1993. Sanitary health requirements for systems supplying water forhuman use and consumption, both public and private.

NOM-013-SSA1-1993. Sanitary health requirements for water tanks on trucks used totransport and distribute water for human consumption and use.

NOM-014-SSA1-1993. Sanitary health procedures for sampling water for human use andconsumption 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 privatesupply systems. Sanitary health procedures for sampling.

National Water

Commission(CNA)

NOM-007-CNA-1997. Safety requirements for the construction and operation of watertanks.

NOM-002-CNA-1995. Residential hookups to the water supply system. Specificationsand testing methods.

NOM-004-CNA-1996, Requirements for the protection of aquifers during themaintenance and rehabilitation of water supply wells and for the closing of wells ingeneral.

NOM-013-CNA-2000. Water distribution systems, specifications for hermitic sealing andtesting 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 Municipality Name of WTP Type of Treatment ProcessInstalled

Capacity (l/s)

Coahuila Acuña Cd. Acuña Conventional clarification 350La Amistad Conventional clarification 500

Tamaulipas

NuevoLaredo

Central Conventional clarification 2,000Southeast Conventional clarification 400

Reynosa

Loma Linda, Plant #1 Conventional clarification 1,500Plant #3 Conventional clarification 750PEMEX Direct filtration 150Rancho Grande Patented clarification 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 Regulations

TCEQ Texas Commission on Environmental Quality 

Title 30, Part I

Chapter 279279.1-279.13. Water Quality CertificationChapter 290Subchapter D. Rules and Regulations for Public Water SystemsSubchapter F. Drinking Water Standards Governing Drinking Water Quality andReporting Requirements for Public Water Supply SystemsChapter 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-the-

art 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 City Name of WTP

Type of Treatment

Process

Installed

Capacity (l/s)

Texas

Del Rio San Felipe Spring Ultrafiltration withmembranes 797.3

LaredoJefferson N/A N/A

Colombia N/A N/A

McAllenPlant No. 1 Conventional clarification 513.39

Plant No 2 Conventional clarification 31.22

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 Regulation

Ministry of Environment

and Natural Resources

(SEMARNAT)

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 finaldisposal.

National WaterCommission (CNA) 

NMX-AA-003-1980. Wastewater - sampling.NMX-AA-113-SCFI-1999. Water analysis - detection of helminth eggs. Testingmethod.NMX-AA-004-SCFI-2000. Water analysis - detection of settleable solids in rawwater, wastewater, and treated wastewater. Testing method.NMX-AA-005-SCFI-2000. Water testing - detection of recoverable grease and oilin raw water, wastewater, and treated wastewater. Testing method.NMX-AA-006-SCFI-2000. Water analysis - detection of floating matter in rawwater, 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 Municipality Name of WWTPType of Treatment

Process

Installed

Capacity (l/s)

Coahuila Acuña Cd. Acuña Activated sludge 205

TamaulipasNuevoLaredo

International WastewaterTreatment Plant

Activated sludge 1,360

Reynosa Loma Linda Stabilization ponds 750

Source: Prepared by authorsl/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

TCEQ Texas Commission on Environmental Quality

Title 30, Part IChapter 279. Water Quality Certification 

Chapter 303. Operation of the Rio GrandeChapter 307. Texas Surface Water Quality StandardsChapter 309. Domestic Wastewater Effluent Limitation and Plant SitingChapter 312. Use, disposal and transportation of sludge generated by domesticwastewater 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 Name of WWTPType of Treatment

Process

Installed

Capacity (l/s)

Texas 

Del RioSilver Lake Activated sludge 51.6San Felipe Activated sludge 120.9

LaredoNorth Laredo Activated sludge 40.55

Southside Activated sludge N/AZacate Activated sludge 919.8

McAllenSouth Plant Activated sludge 37,850,000North Plant Activated sludge 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 City Type of Plant Position Education Level

Coahuila *Acuña

General manager University (Engineering)WTP and WWTP Assistant manager, technical area University (Civil Engineering)

WTP Assistant manager, wastewater treatment area University (Metallurgical Engineering)WTP Operator A High schoolWTP Operator B N/AWWTP Assistant manager, water treatment N/A

Tamaulipas

**NuevoLaredo

General manager University (Engineering)WTP and WWTP Manager, technical area University (Engineering)WTP Head of Water Quality University (Chemistry/Pharmacy/Biology)WTP Head of potable water laboratory University (Chemistry/Pharmacy/Biology)WWTP Head of wastewater laboratory University (Chemistry/Pharmacy/Biology)WTP and WWTP Head of regulations High School (Technical)

WTP Head of drinking water plant operations University (Engineering)WWTP Head of the treatment plant University (Engineering)WTP and WWTP Operators N/A

***Reynosa

General manager University (Engineering)WTP and WWTP Technical and operations manager University (Architecture)

WWTP Wastewater coordinator University (Engineering)WTP Water treatment and storage coordinator University (Chemical Engineering)

WTP and WWTP Operators D Secondary and high schoolWTP and WWTP Operator C Secondary schoolWTP and WWTP Pump operator Primary school

Source: Prepared by authors with *information provided by SIMAS; ** information from the COMAPA-Nuevo Laredo website; and information fromCOMAPA-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 Type of Plant Operator License Education Level Experience (years) Minimum Hours of Work

Del Rio WTP

1 B (surface water) University 1 100High school 5 100

1 B (groundwater) University 1 100High school 5 100

3 C (surface water) High school or equivalent 0 201 D (groundwater) High school 0 20

Equivalent 0 40

Laredo WTP N/A N/A N/A N/A

McAllenWTP

D High school 0 20Equivalent 0 40

C High school or equivalent 0 20B University 1 100

High school 5 100A Master's 4 160

University 5 160High school 8 160

Del RioWWTP

1 D High school 0 201 C High school or equivalent 0 202 B University 1 1001A Master's 4 160

University 5 160High school | 160

Laredo WWTP

D High school 0 20Equivalent 0 40

C High school or equivalent 0 20

McAllen WWTP

1 D High school 0 202 C High school or equivalent 0 202 B University 1 1001A Master's 4 160

University 5 160High school | 160

Source: Prepared by authors with information provided by the U.S. utilities.

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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  Type of Disposal Dry Tons per Year

2007 2006 2005 2004 2003 2002

Laredo Zacate Creek Municipal dump 3,530.7 3,603.8 3,374.1 366.1 3,173 N/A

Del Rio San Felipe Municipal dump N/A 712.3 903.26 903.26 N/A N/A

McAllenSouth 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

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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-  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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-  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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 Bibliography

ADERASA,   Base de Datos e Indicadores de Gestión para Agua Potable y

  Alcantarillado. Ejercicio Anual de benchmarking 2006 [Database andManagement Indicators for Water and Wastewater Collection. 2006 Fiscal YearBenchmarking.]

Amaya Ventura, Ma. De Lourdes, Importancia de las instituciones en la gestión del agua

[Importance of Institutions in Water Management], in: Gaceta Ide@asCONACYT EG, Year 2, No. 28, November 16, 2007, electronic magazine.

Baietti, Aldo; Kingdom, William; van Ginneken, Meike. Characteristics of Well-

performing Public Water Utilities, World Bank Group, May 2006.

Mexican national water commission, Comisión Nacional del Agua (CNA).  Disponibilidad agua superficial (2000) [Availability of Surface Water (2000)],Consulted at;  http://www.cna.gob.mx/eCNA/Espaniol/Directorio/Default.aspx, inMarch 2007.

_____________________________,  Estadísticas del Agua en México [Water Statistics inMexico]. Edition 2003.

_____________________________, Situación del Subsector Agua Potable,

  Alcantarillado y Saneamiento [Status of the Water, and Wastewater Subsector],

Edition 2007. Consulted at:http://www.cna.gob.mx/CONAGUA07/Noticias/Subsector2007-SGIHU.1.pdf . Accessed in January 2008.

_____________________________,  Normas Oficiales Mexicanas del sector agua.[Official Mexican Standards for water] consulted at:http://www.conagua.gob.mx/conagua/Espaniol/TmpContenido.aspx?id=14cad3d1-b540-45b7-b9f0-24e708a0eab5%7C%20%20%20%20Normas%20Oficiales%20Mexicanas%7C0%7C0%7C16%7C0%7C0, Accessed in March 2008.

New York State Department of Health, Wastewater Treatment Manual, Ed. LIMUSA, pp.41, 42, 83,84, 115-117; 2006.

Mexican statistical agency, INEGI,   II Conteo de Población y Vivienda [Population andHousing Count II], 2005.

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Lafferty, Angela and Lauer, William C. Benchmarking Performance Indicators for Waterand Wastewater Utilities: Survey Data and Analysis Report. American WaterWorks Association, 2005.

Merino, Mauricio,   La profesionalización municipal en México [MunicipalProfessionalization in Mexico], in Merino, Mauricio (editor),   La gestión

  profesional de los municipios en México, México [Professional Management of Municipalities in Mexico City, Mexico], CIDE. 2006.

Organization for Economic Cooperation and Development (2003). OECD EnvironmentalPerformance Review. Paris, OECD: 241.

Ramírez Kuri, Patricia, (1999). Gobierno local [Local Government], in Baca, Laura, et al, Léxico de la política [Lexicon of Politics], FLACSO-Conacyt-Fundación H.Boll,

Mexico

Mexican Ministry of Health, NOM-SSA, Consulted in:http://bibliotecas.salud.gob.mx/cgi-bin/library?e=p-00000-00---0nomssa--00-1--0-10-0---0---0prompt-10---4-------0-1l--11-es-50---20-about---01-3-1-00-11-1-0utfZz-8. Accessed in March 2008.

Mexican Ministry of Enviornment and Natural Resources (SEMARNAT),  Normas

Oficiales Mexicanas Vigentes [Current Official Mexican Standards].  Descargas

de agua residuales [Wastewater Discharges]. Consulted in:http://www.semarnat.gob.mx/leyesynormas/Pages/normasoficialesmexicanasvigentes.aspx, 2008.

Tebbut T. H. Y., Principals of Water Quality Control, Ed. LIMUSA. pp. 113-150, 2006.

Texas Commission on Environmental Quality (TCEQ), Rules and Regulation for PublicWater Systems, 20 TAC Chapter 290, Subchapter D, Water Supply Division, pp.1-78, 2004.

___________________b. , Drinking Water Standards Governing Drinking Water Qualityand Reporting Requirements for Public Water Systems, 30 TAC, Chapter 290,Subchapter F, pp. 1-86, 2004.

World Water Council (2003). Report of the World Panel on Financing WaterInfrastructure: Financing Water for All, World Water Council-3rd World WaterForum-Global Water Partnerships: 54.

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 Annexes

 Annex 1.  Description of Water Charges by City

SIMAS-Acuña

Usage amounts (gal) Water rate (pesos)

0 1,320 2.800

1,321 2,642 2.380

2,643 3,693 2.200

3,694 5,019 2.1005,020 5,283 3.5025,284 7,925 3.752

7,926 13,208 4.01513,209 19,812 4.39919,813 26,417 4.84626,418 39,625 5.31239,626 52,834 5.97452,835 2,641,464 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 

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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

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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 404.7 582.766076-6340 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

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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 Sewer

Usage amounts Charge (USD) Usage amounts Charge (USD)

Up to 3,000 gals $8.90 Up to 3,000 gals $8.19

More than 3,000 gals $2.77 per 1,000 gals More than 3,000 gals $ 2.49 per 1,000 gals

Source: Prepared by the authors using information provided by the City of Del Rio, Ordinance Code 2006-032.

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Laredo Department of Water

Water

Usage amounts Per extra thousand gallon (Dls.) 

2,000 $ 7.50*

2,001 to 4,000 $ 1.29

4,001 to 10,000 $ 1.38

10,001 to 20,000 $ 1.44

20,001 to 30,000 $ 1.53

30,001 to 40,000 $ 1.62

40,001 to 50,000 $ 1.69

50,000 $ 3.38

Sewer

4,000 $ 8.50*

4,001 to 10,000 $ 1.03

10,001 to 20,000 $ 1.08

20,001 to 30,000 $ 1.14

30,000 $36.89**

* Usage charge per 1,000 gallons**The maximum charge will be up to 30,000 gallons and the equivalent of 36.89 permonth.Source: Prepared by the authors using information provided by the City of Laredo,Ordinance Code 31.

McAllen Public Utility

Water Sewer

Water base rate $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.

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Annex 2. Water Quality Standards for Water and Wastewater Treatment Plants

Type Pollutant

México, NOM

(Permissible Limit mg/L)

United States, TCEQ

(Permissible Limit mg/L) orpermissible units

OC Acrylamide N/A N/AOC Alacor N/A 0.002R Gross alpha particle activity N/A 15 pCi/lIC Antimony N/A 0.006IC Arsenic 0.05 0.01IC Asbestos N/A 7 MFLOC Atrazine N/A 0.003IC Barium 0.7 2OC Benzene N/A 0.005OC Benzo(a)pyrene N/A 0.0002IC Beryllium N/A 0.004R Emissions of beta and photons particles N/A 4 mrem/year

SD Bromate N/A 0.01

IC Cadmium 0.005 0.005OC Carbofuran N/A 0.04OC Carbon tetrachloride N/A 0.005D Chloramines (como Cl2) N/A 4

OC Chlordane 0.3 0.002D Chlorine (Cl2) 0.2 - 1.5 4D Chlorine dioxide (ClO2) N/A 8

SD Chlorite N/A 1OC Chlorinated Benzene N/A 0.1IC Chromium (total) 0.05 0.1IC Copper 2 AL=1.3M Cryptosporidium N/A 1 CCR unitsM Fecal coliform and E. Coli 0 CCR unitsM Total Coliforms 2 0 MCLGIC Cyanide (free cyanide) 0.07 0.2

OC 2,4-D 50 0.07OC Dalapon N/A 0.2OC 1,2 Dibromo-chloro-propane N/A 0.0002OC o-Dichlorobenzene N/A 0.6OC p- Dichlorobenzene N/A 0.075OC 1,2-Dichloroethane N/A 0.005OC 1-1-Dichloroethylene N/A 0.007OC cis-1,2- Dichloroethylene N/A 0.07OC trans-1.2- Dichloroethylene N/A 0.1OC Dichloromethane N/A 0.005OC 1-2-Dichloropropane N/A 0.005OC Adipate di-2 (2-ethyl hexyl) N/A 0.4OC Phthalate di (2-ethyl hexyl) N/A 0.006OC Dinoseb N/A 0.007OC Dioxin (2,3,7,8-TCDD) N/A 0.00000003OC Diquat N/A 0.02OC Endotal N/A 0.1OC Endrin N/A 0.002OC Epichlorohydrin N/A N/AOC Ethylbenzene N/A 0.7OC Ethylene dibromide N/A 0.00005IC Fluoride 1.5 4M Giardia lamblia N/A

OC Glyphosate N/A 0.7SD Haloacetic Acids N/A 0.06

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OC Heptachlor 0.03 0.0004OC Heptachlor epoxide 0.03 0.0002M Heterotrophic bacteria plate counting N/A N/A

OC Hexachlorobenzene 0.01 0.001

OC Hexachlorocycloethane N/A 0.05IC Lead 0.025 0.15M  Legionella N/A

Lindane N/A 0.0002IC Mercury 0.001 0.002OC Methoxychlor N/A 0.04IC Nitrate 10 10IC Nitrite 0.05 1OC Oxamyl N/A 0.2OC Pentachlorophenol N/A 0.001OC Picloram N/A 0.5OC Polychlorinated biphenyls N/A 0.0005R Radium 226 and Radium 228 (combined) N/A 5 pCi/lIC Selenium N/A 0.05OC Simazine N/A 0.004

OC Styrene N/A 0.1OC Tetrachlorethylene N/A 0.005IC Thallium N/A 0.002OC Toluene N/A 1SD Total Trihalomethanes 0.2 0.1OC Toxaphene N/A 0.003OC 2,4,5-TP (Silvex) N/A 0.05OC 1,2,4-Thrichlorobenzene N/A 0.07OC 1,1,1-Trichloroethane N/A 0.2OC 1,1,2-Trichloroethane N/A 0.005OC Trichloroethylene N/A 0.005OC Turbidity N/A N/AR Uranium N/A 30 ug/L

OC Vinyl Chloride N/A 0.002M Viruses (enteric) N/A

OC Xylenes N/A 10IC Cuprum 0.2 N/AOC Total hardness (CACO3) 500 N/AOC Phenols 0.001 N/AIC Iron 0.3 N/AOC Manganese 0.15 N/AOC Ammoniac nitrogen 0.5 N/A

OCPesticides in microorganisms /l: Aldrin y

dieldrin 0.03 N/ADDT 1 N/A

R Alpha/photons emitted N/A 15 pCi/lOC Gamma-HCH (lindane) 2 N/AOC Sodium 200 N/AOC Total dissolved solids (TDS) 1000 N/A

OC Sulfates 400 N/AOC SAAM 0.5 N/AOC Zinc 5 N/A

Nomenclature and units 

OC Organic chemical MFL= millions of fibers per litreIC Inorganic chemical pCi/L=picocuries per litreM Microorganisms MCL= Maxim level of pollutantR Radioactive MCLG= Maxim level permissible of pollutant

SD Subproduct of disinfection ug/l= nanograms per litre

Source: Jiménez C. 2005. LA CONTAMINACION EN MEXICO [ Pollution in Mexico]

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Photographic Annex 

a)  Nuevo Laredo , Tamaulipas

Nuevo Laredo Water Treatment Plant

Nuevo Laredo Wastewater Treatment Plant

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b)  Reynosa, Tamaulipas

Reynosa Water Treatment Plant

Reynosa sewage treatment lagoon

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c)  Ciudad Acuña, Coahuila

La Amistad Dam

Ciudad Acuña Wastewater Treatment Plant

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d)  Laredo, Texas

Laredo Water Treatment Plant

Laredo Wastewater Treatment Plant

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e)  McAllen, Texas

McAllen Southwest Water Treatment Plant

McAllen sewage treatment lagoon

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Local and Financial Water Management for Urban Use inthe U.S.-Mexico Border

f)  Del Rio, Texas