Bay Area Water Agencies Consider Rate Hikes to Combat Falling Revenue

California drought (AP)
Associated Press

Facing falling revenue due to reduced water use, three of the largest Bay Area water agencies are mulling rate hikes for their customers as California finds itself mired in a fourth year of drought.

The Santa Clara Valley Water District, the East Bay Municipal Utility District and the San Francisco Public Utilities Commission are all considering rate hikes of up to 30 percent this year, according to the Contra Costa Times.

The drought has wreaked havoc on water agencies’ revenue sources; according to the report, the agencies have lost tens of millions of dollars as Bay Area customers cut back their water use in an attempt to conserve.

The seven-member board of the Santa Clara Valley Water District will reportedly meet Tuesday to discuss a rate hike of up to 31,5 percent on its “pump tax,” the charge passed on to cities and private companies that receive water from the agency. SCVD CEO Beau Goldie told the Times that if Santa Clara residents hit the 20% cutback goal the district has set, his agency will lose approximately $20 million. The SCVD supplies water to 1.8 million people in Silicon Valley.

“We don’t want to raise the water rates,” Goldie told the paper. “But our job is to make sure there is enough clean, safe water to sustain the economy of Santa Clara County. We can’t control the drought.”

The board of the East Bay Municipal Utility District will also reportedly meet later this month to discuss rate hikes. According to the Times, the agency lost $25 million when Alameda and Contra Costa county residents cut their water use by 12 percent this year. Part of the agency’s losses came from having to import federal water from Sacramento and Placer County. EBMUD already increased its rate by 9.5 percent in March, but will discuss an additional 8 percent raise plus another 8 to 25 percent “drought surcharge” to be voted on in April.

“We’ve gone through these first years of drought with minimal financial impact on our customers,” EBMUD spokeswoman Abby Figueroa told the paper. “But with another year of drought, the water reserves are down, and the financial reserves are down. And customers are going to have to cut back and foot more of the bill.”

Some private water companies, and even some small towns, are not buying the agencies’ reasoning for rate hikes. Tim Guster, vice president of the private Great Oaks Water Co., told the Times that agencies should find other ways to cut costs, like delaying costly construction projects, to avoid passing on rate increases to consumers.

“It’s too easy to say that their costs are all fixed,” Guster said. “The truth is they’re not. It’s the duty of this and other government agencies to control their own costs.”

Residents of the town of Cantua Creek in Fresno County opened up a new front in the battle against agency rate hikes this week when they told the Fresno County Board of Supervisors they do not want to pay a higher rate for delivery, even if it means the town stops receiving water altogether. The county has reportedly proposed a 30% rate increase, bringing base water bills for Cantua Creek’s 450 residents to $102 per month.

At a recent meeting, 30-year Cantua Creek resident Antonio Mendoza told county supervisors that the area’s families just cannot afford a rate hike.

“Our community is a poor community and every day it gets more difficult to maintain our families and pay our utilities,” Mendoza told officials at the meeting, according to the Fresno Bee. “The majority of people in our community work in agriculture, many of them earn minimum wage with a family to support and children….We understand water has gone up in price and and we want you to understand we cannot pay that.”

If the town’s residents and the county board of supervisors cannot come to a solution, the town could become the first county service area to have its water completely shut off.

Meanwhile, the San Francisco Public Utilities Commission, the largest water agency in the Bay Area, will hold a vote in May to decide whether to raise rates by 32 percent to the 26 cities and private companies it provides water for. Like the other agencies, the SFPUC lost about $25 million due to residents cutting back their water use.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, told the Times that under certain circumstances, the water rate hikes could be overturned in court.

“If the water rates need to be increased to secure the water for their customers, they can probably justify that,” Coupal told the paper. “If it’s just for bloated overhead, then someone should look into that. I do know that the special districts in the Bay Area have a reputation as being, shall we say, not very careful with taxpayer dollars.”


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