EBMUD approves two-year budget with six percent water and wastewater rate increase

The East Bay Municipal Utility District Board of Directors, approved a two-year operating budget of $372 million in FY12 and $395 million in FY13. It represents a modest increase over this year’s $369 million water system budget despite rising debt service and anticipated increases in operating expenses for facilities and infrastructure maintenance and petroleum-based products such as paving materials.

The budget remains relatively flat due to a continuing hiring freeze, delay in some capital projects, sharp cuts in discretionary spending and savings from foregoing union-negotiated employee raises for two years. The proposed wastewater system operating budget of $89 million in FY12 and $93 million in FY13 also represents a modest increase over this year’s $86 million budget. In addition to the operating budget, EBMUD is investing in critical capital improvements of $262 million in FY12 and $215 million in FY13.

Under the rates and charges approved today, water and wastewater customers will pay six percent more each of the next two years. The typical EBMUD residential water customer who uses eleven units or 270 gallons of water a day will see an increase in their bill from $38.66 per month to $40.98 per month in FY12 to $43.45 per month in FY13. EBMUD’s average residential wastewater customer’s bill would go from $15.10 to $16.00 in FY12 to $16.94 in FY13.

EBMUD’s budget has been enhanced by savings from its successful energy efforts, particularly in its Wastewater Division. The District generates most of the power used to run its main wastewater treatment plant from methane gas it captures and processes on the site. That facility will soon be completely self-sufficient and generate enough power to sell back to the grid and save customers money in the process.

he District has faced a number of challenges since emerging from a drought two years ago, including less revenue from water sales which have declined about 15 percent. EBMUD has strived to maintain its vast infrastructure and continue to meet or exceed all regulatory standards while cutting back throughout the District.

Board President John A. Coleman said the increases are necessary to keep the District’s strong bond rating, key to holding down ratepayer costs on major construction projections and paying for infrastructure maintenance necessary to operate facilities to provide reliable water and wastewater services. For example, Coleman said one third of the rate increase pays debt service for major construction projects such as the Freeport Water Project, which protects the District in the event of a drought.

“We know our customers are going through difficult economic times and we have done all we can not to add to that situation,’’ said Coleman, “but at the same time, our customers are counting on the reliable water and wastewater service they are accustomed to and we have tried very hard to meet both challenges.”

The rates will be effective on July 1, 2011 and July 1, 2012.