EBMUD General Manager recommends two-year rates and charges to Board

Hopeful that the East Bay Municipal Utility District, with the help of its employee unions that volunteered to pass on pay raises over the next two years, has borne the worst of the spiraling economic crisis, General Manager Alexander R. Coate presented his two-year rate proposal Tuesday to the Board of Directors.

The two-year water system operating budget is a recommended $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 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, less discretionary spending and money saved 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 to the tune of $262 million in FY12 and $215 million in FY13.

Under the rate proposal presented today, water and wastewater customers would 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 would see their bill increase from $38.66 per month to $40.98 per month in FY12 and $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.

The 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 across the board. Coate, who became EBMUD’s general manager in February, believes the worst may be behind the District.

“These are really difficult times for the District and for our customers,” said Coate. “We are doing everything that we can to make it through this budget crisis and maintain the best service we can for our customers. This budget will help.”

The Board of Directors will hold a public hearing during its regularly scheduled meeting on June 14. The Board will vote on the budget and rates at that meeting and if approved, the new rates will take effect July 1, 2011 and July 1, 2012.