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June 10, 2011 > Groundwater charges

Groundwater charges

How they benefit the community

By Director Richard Santos, Santa Clara Valley Water District

On May 24, my fellow board members and I voted to increase groundwater production charges by 9.4 percent ($1.69 per month for the average household) in cities north of Morgan Hill and by 3.6 percent (34 cents per month for the average household) in the South County. This increase may be reflected in the rate your water provider charges for water service.

The groundwater production charge is what water providers (such as the City of Milpitas or San Jose Water Company) pay the Santa Clara Valley Water District for water they pump from the groundwater basin. The water district provides a number of services to manage that water supply. Many water providers also purchase water treated at one of our three treatment plants.

While many other water agencies raised rates by double digits over the last three years, our water district cut or postponed projects to keep water charges flat, absorbing cost increases and drops in revenues due to reduced water use. These increases, after three straight years of flat water rates, are necessary to fund essential operations, maintenance and construction projects; such as operating an extensive water-supply system, importing water and running and maintaining water treatment plants.

Financial projections show the need for additional increases over the next several years to tackle major infrastructure challenges. For example, several of the district's local reservoirs are currently under storage restrictions because of earthquake safety concerns. The district needs to make necessary retrofits to ensure public safety and restore its ability to capture local rainfall. The district's infrastructure is aging. Some of the pipelines, valves, pumps and treatment plant equipment facilities are nearing the end of their useful life and must be replaced.

Delaying these and other projects would increase the risk of water service interruptions, higher corrective maintenance costs, and a reduced ability to respond to drought conditions. That is why we could not go another year without increasing our rates.

We know, however, that if we're asking you to pay more, you should have confidence that we are a fiscally responsible organization. I'm proud to say that this past month we also passed a budget that was reduced by $2.5 million from last year.

The water district's Fiscal Year 2011-12 budget is $312.6 million and includes: Scheduled construction of 12 capital projects, expected to generate an estimated 900-1,700 local jobs; Infrastructure improvement and repair, including aging equipment at the water treatment plants; Completion of seismic stability evaluations for the Almaden, Calero, Guadalupe, Lenihan and Stevens Creek dams; Inspection of 279 miles of streams throughout the county, Repairs to eroding creeks, maintenance of creek conveyance capacity and management of acres of vegetation; Expansion of recycled water supply; and Securing of imported water supplies, which account for about half of the county's water.

In FY 2011-12, the district will also initiate a comprehensive management audit program to assess strengths and identify opportunities for further improvement and strengthen accountability to the board and public.

Among key efficiencies achieved with the FY 2011-12 Budget:

Reduced staff by an additional 10 positions, saving $1.43 million compared to last year. The district has cut a total of 92 positions over the last four years

Reduced overtime by 16.2 percent, saving $224,000

Reduced consultant services by 1.7 percent, saving $500,000

Decreased funding for non-mandatory training by 34 percent, saving $93,000 over FY 2010-11

Reduced training travel by 18.4 percent, saving $76,000

Terminated rental properties and consolidated offices, saving $500,000 per year

I hope that this information addresses some of your questions and concerns about our decision to increase groundwater production charges this year.

As always, I am available for questions or comments as your District 3 representative for the northern areas of Sunnyvale and Santa Clara; Alviso; Milpitas; and the north San Jose and Berryessa communities. Feel free to contact me at (408) 234-7707.

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