East Bay Water District Approves 20% Rate Increase

(BCN) East Bay Municipal Utility District directors voted 5-2 Tuesday to increase customers' water rates by 19.25 percent over the next two years to pay for infrastructure and maintenance work.

The rate hike calls for the typical single-family EBMUD customer to pay an extra $8.15 a month in water rates over the next two years and see their monthly bill rise from $40.45 to $48.60 over that time span.

And they come on top of water rate increases that have totaled 12 percent in the past two years that the water agency has imposed on its 1.3 million customers in Alameda and Contra Costa counties.

Most of the 17 customers who spoke at Tuesday's board meeting oppose the rate hike, saying it's too steep.

But a majority of board members said the 90-year-old water agency needs to raise its rates again to help pay for infrastructure and maintenance work, such as replacing aging pipes and other equipment, that's been deferred during the economic downturn in recent years.

Referring to the infrastructure and maintenance work, Director William Patterson said, "You can only put it off so long. Our number one priority is our infrastructure and we're here to do out best for our ratepayers."

Director Lesa McIntosh said, "We don't take this (the water rate increase) lightly, but we've been limping along quite a while. I know it's painful but I think it's necessary."

Director Doug Linney said, "Nobody likes to increase rates" but he said that even with the increase EBMUD's rates are still lower than most water agencies in the Bay Area.

Director Frank Mellon said, "If we don't do this now, the cost later on will be so much more. It's my fiduciary responsibility to support this."

The board's vote means that water rates will increase by 9.75 percent on July 1, when the new fiscal year begins, and by another 9.5 percent on July 1, 2014.

It also means that wastewater rates will rise by 9 percent on July 1 and by another 8.5 percent on July 1, 2014.

Before the board voted, EBMUD finance director Eric Sandler said the water agency faces fiscal challenges from the drought and the economic recession, such as reduced sales volumes, capacity charges revenues and interest earnings.

Sandler said some of the strategies that EBMUD has used to mitigate its financial challenges, such as increasing its maintenance backlog, letting its infrastructure age and risking its AAA credit rating, are no longer sustainable.