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December 14, 2010 > Water rates to increase

Water rates to increase

By William Marshak

In a presentation to the Alameda County Water District Board of Directors on Wednesday, December 9, Financial Services Manager/Assistant Treasurer Michael Yee reviewed the rationale for an eight percent (8%) across the board rate increase next year and similar increases for the following two years. Several reasons were cited to support the need for the rate hike and significant adjustments to a wide range of service fees charged by the District.

Chief among the factors necessitating rate escalation is the reduction in demand for water in the Tri-Cities. Reduced water usage can result in less revenue for an existing infrastructure that must be maintained. The current economic recession coupled with restriction of Delta water supplies, increased charges for Hetch Hetchy water and escalating personnel costs have major impacts on District funds. Retirement benefits, funded through CalPERS, depend on a strong economy to maintain reasonable costs; when investment yield is reduced, the price of maintaining promised benefits escalate.

Calling the proposed rate increases a "reasonable recommendation," Yee cited a Financial Planning Model (FPM) that looks at short and long term needs (up to 25 years), particularly focused on the next 10 years. Actual water demand and property tax revenue is expected to be less than previously projected while labor and other costs are rising. The price of water, especially if supplied from Hetch Hetchy by the San Francisco Public Utilities Commission (SFPUC), is expected to increase substantially.

Water districts that depend entirely on Hetch Hetchy water will be more heavily impacted by future increases. Fortunately, while ACWD does use water supplied by SFPUC, only about 20 percent of ACWD resource is from the Hetch Hetchy pipeline. Yee noted that ACWD rates are in the lowest third of those charged by other local districts and even with the projected increases, will remain among the least expensive. He said that other districts that rely heavily on SFPUC will experience much more dramatic increases.

The bimonthly service charge for a typical home (5/8" and ?" meter size) supplied by ACWD will change from $11.62 to $12.55. An average user of 283 gallons per day will see their bill for bimonthly service and water increase from $74.96 to $80.95 - approximately 10¢ per day. All meter sizes will experience a similar rate adjustment.

A notice is being sent to affected property owners outlining the proposed rate increase, setting a public hearing date of Thursday, February 10 at 6 p.m. at ACWD Board Room, 43885 So. Grimmer Boulevard, Fremont. The expected effective date of the first rate increase will be March 1, 2011.

For additional information about ACWD services and rates, visit www.acwd.org or call (510) 668-4200.

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