Amidst Financial Struggles, EBMUD's Board Approves 7.5% Increases for Each of Next Two Years
OAKLAND (June 9, 2009) - The East Bay Municipal Utility District Board of Directors today adopted a two-year budget that will raise rates 7.5% each for the next two years. The average singlefamily residential water bill will increase $2.88 to $35.95 per month in FY10, and $2.71 to $38.66 per month in FY11.
The budget also increases wastewater rates 5% in FY10 and 5% in FY11. The average singlefamily residential wastewater charge will increase $0.62 per month in FY10 and $0.72 per month in FY11.
The overall 7.5% rate increase was adjusted for each customer class so that all groups are paying their share of total costs. Based on results of a required cost of service study conducted in 2009, EBMUD learned single-family residential customers were not paying their full percentage of costs and other groups were paying more than their share. The FY10 rate increase for single-family residential customers will be 8.7%, and for commercial and industrial customers the increase will be 5%.
In 2010, EBMUD will complete construction of the Freeport Regional Water Project, a drought-year water supply more than 30 years in the making. The project includes a new pipeline and other facilities to add Sacramento River water as a supplemental supply during dry years. To cover the costs of running the project, a new surcharge of 14% on the total water flow charges will be added to the water bill when supplemental supplies are used. The surcharge will be in place for the amount of time it takes to pay for the added operating costs of the supplemental supplies.
EBMUD customers currently pay drought rates due to a water supply shortage declared in May 2008, but as a result of adequate rain and snowfall this past winter, along with customer conservation, the EBMUD Board declared an end to the drought emergency effective July 1, 2009. The rates adopted today go into effect July 1, 2009. With the end of drought rates and adoption of the new rates on July 1, most customers will not see a significant change in their bill. The average single-family residential customer will pay about 2% more this year compared to the drought rates. Customers who paid drought surcharges last year may see their bill go down.
District revenues have taken a $30 million hit from the slumping housing market (fewer connection fees for new homes) and reduced water use. Compounding the situation is more than $16 million in added expenditures for debt service for capital projects, increased costs for chemicals, self-insurance, employee salaries, health care and other ongoing costs.
"This has been the most difficult budgeting process in years," said EBMUD Board President Doug Linney. "To keep the rate increase as low as possible, we instituted a hiring freeze, delayed numerous capital projects, restricted travel and conferences, and deferred scheduled replacements of vehicles and equipment. However, EBMUD cannot cut back service to the point where it might impede our ability to provide our customers with the high-quality water and reliable service they expect from EBMUD."
