On June 11, 2013, the East Bay Municipal Utility District (EBMUD) Board of Directors will decide whether to raise water rates for the utility’s 390,000 customers (106,000 in Oakland).

The rate increase will phase in over two years:  9.75% in FY2014 and 9.5% in FY2015, for a cumulative increase of about 20%.  EBMUD’s website translates this, for the typical customer, to an additional $3.96 per month the first year and $4.19 more the second year.  Once the proposed increases are phased in, customers could see their water bills increase by almost $100 per year.

“What’s difficult is communicating the sum of all our budget pressures,” said Andy Katz, President of the EBMUD Board of Directors.  Both Katz and EBMUD’s Finance Chief Eric Sandler pointed to four factors leading to the need for this rate increase:

  • Deferred maintenance: during years of recession, EBMUD has instituted a hiring freeze leading to a backlog of projects.
  • Reduced water usage:  EBMUD customers conserve water at drought levels, using 20% less than before the last drought. “Regardless of whether you turn the tap on or use a high efficiency washing machine, the pipe that brings water to your house still needs to be maintained,” said EBMUD Spokesperson Abby Figueroa.
  • The decline in new construction:  “A large portion of our cash flow comes from service capacity charges,” said Katz.  Sandler noted that the charges levied on new development have declined by 80%.
  • Increases in energy and chemical costs: the inputs needed to turn river water into the East Bay tap water have gone up by a third.
Comparison of  EBMUD rates with 13 Bay Area water utilities

Comparison of
EBMUD rates with 13 Bay Area water utilities

Fifty percent of the EBMUD’s 4200 miles of water pipes are 50 years old or older.  Many of the oldest pipes are in Oakland. Although Oakland accounts for less than 25% of the system, almost 37% (236 out of 638) of water main breaks in the past 12 months occurred in Oakland.

“We have an aging infrastructure,” said Katz.  “Priority number one for EBMUD’s next budget is to replace water mains so that we can prevent water mains from breaking.”

If EBMUD replaces 10 miles of pipe per year, as called for in the proposed budget (up from 8 miles now), it will take 210 years to replace the 50% of they system that are currently over 50 years old. “We’re catching the problem before the infrastructure falls apart,” Katz insisted.  He added that viability of the infrastructure replacement schedule was “an important question that I intend to ask on Tuesday.”

Figueroa reported that the utility had received 167 letters of protest in response to this rate hike.  By contrast, EBMUD received 847 letters of protest for a smaller rate increase in 2011.

“EBMUD is, at least theoretically, accountable to the voters,” said Stuart Flashman, a former EBMUD Director and an environmental and land use attorney.  “The problem with EBMUD, in my opinion, is that the elections are so low profile that there is rarely a contested election.”  Mindy Spatt of The Utility Reform Network (TURN), a consumer watchdog for privately owned California utilities, noted that “this points to a need for a consumer advocate” for municipal utilities.

“EBMUD is one of your more responsive water agencies, if not the most in California,” said Adam Scow, California Campaigns Director for Food and Water Watch.  He sees the infrastructure problem as bigger than one utility:  “A lot of cities and water agencies are facing really old infrastructure.  The whole country is.”  Scow added, “Water infrastructure is a federal, state and local responsibility.  It shouldn’t just fall on ratepayers.”

What do you think about EBMUD’s rate increase?  Let your board member know.

The Board Meeting is open to the public: Tuesday, June 11, 2013 at 1:15 p.m. in the EBMUD Board Room, 375 11th Street, Oakland, CA.

 

About The Author

Laura McCamy, is a freelance writer, editor and researcher, and a contributing production editor at Oakland Local. Her work also appears in Momentum Magazine and the Intuit Small Business Blog. Follow Laura on twitter @lmcwords

11 Responses

  1. Aaron Parr

    Raising rates makes sense given the pressures that the agency is under. However, we need to pressure EBMUD to do a better job maintaining the water system.

    EBMUD needs to demonstrate that the rate increase will make up the difference to enable them to avoid deferring maintenance.

    Reply
  2. michelle tanaka

    Compare to OPD and in general , city of Oakland, EBMUD is a black box. Worker’s salary? Director’s salary? Efficiency? All unknown to me as a rate payer. The break downs are not on their website or their financial reports. Does anyone know?

    If Oakland has the oldest pipes around, doesn’t that mean we have been paying the longest and has been helping other regions pay for their newer pipes in years back. I am assuming all customers in different cities pay the same rate and share the cost in a mutual way. Is that correct?

    Reply
    • Laura McCamy

      I wondered the same thing when I started researching the story. From what I have found, it appears that EBMUD does a better job than most water agencies of making new developments pay their way and not subsidizing new pipes laid in the eastern suburbs.

      You raise good questions about transparency. I found the agency was very forthcoming in providing me with information, but their data is not available on the internet the way data is, for example, on the City of Oakland website.

      When I asked about accountability, I was told that, because the board members are elected, they are accountable to the voters. If you want more public information, you can contact your board member and talk to him or her about it.

      Reply
    • Emanuelle

      Pretty funny, seeing how one of the Directors lives in a rent-controlled apartment and is fighting a rent increase. Glad to see he’s ok with raising rates on everyone else.

      Reply
    • Kevin Chooch

      I was easily able to find the salary ranges for each position on their website, in the jobs section. Seems pretty transparent to me.

      As for the new development – they have to pay into the system. They could conversely say, “why do we have to increase the rates to pay for Oakland’s breaks when our pipes are nice and new.” It balances out.

      Reply
  3. Damian Park

    Rate increases are fine to pay for things. But, why not structure the increase in such a way to discourage peak use? If peak use in the summer is responsible for a larger share of the costs, then change the block-rate scheme to reflect this by bumping up the second tier price.
    I imagine this would put more of the burden on eastern communities however…

    And as for salaries, all public agencies pay well. But given shortages of money, they have not shown any desire, like the rest of the country, to cut salaries as that is very difficult. Therefore, the reality is that starving them will not encourage salary cutting but rather hiring freezes as they did before.

    Reply
    • Laura McCamy

      Good points.

      I have to say that every EBMUD employee I have dealt with – both for this story and in dealing with a water main break last year – has been pleasant, professional and helpful. I don’t begrudge them their salaries. I want the guy fixing the broken water main at 3 am to be paid well.

      The missing piece might be federal funding. As Adam Scow of Food and Water Watch pointed out, the feds contributed to the initial building of the water system but have not stepped up to help fund infrastructure repairs. EBMUD did not get any of the stimulus funds that were distributed by the feds a couple of years ago. There is a national epidemic of crumbling infrastructure.

      Reply
      • Damian Park

        I disagree with Adam here about federal funding. It is not good policy to rely on the feds to pay for something that only benefits us in Oakland. Why should Boston residents pay for our water infrastructure, and why should we pay for theirs? If our infrastructure was really crumbling, then we should step up to fund it and we have in countless cases. But we should not exaggerate the issue in order to attract federal funds to pay for things that we ought to pay for ourselves. And we should not simply fund infrastructure as if it is always a good idea. Doing so has tradeoffs, and those tradeoffs could mean fewer libraries, police, etc. when using public dollars.

        Salaries – I am happy when people are paid well too. But public agencies that have the ability to tax mean that they have less of an incentive to keep costs down. All managers like to give raises, and none like the unpleasant experience of firing a worker or cutting their salary. But public agencies, or even large corporations, often face less pressure to keep costs in line because they cannot go bankrupt like smaller private companies. But this really isn’t much of an issue here as you point out. The main issue is funding repairs

  4. michelle tanaka

    Hi Kevin

    I still cannot find salary information for managers on their website. I see salary information for current job openings which is few.

    Nor does it have information on salary trend of previous years.

    Not transparent at all to me.

    I don’t see how it is that resident can determine this organization’s efficiency if these basic financial information is not available EASILY accessible.

    Reply
  5. Lorena

    I would like to see the rates, average monthly bills per household size for EBMUD vs. other water utility companies in the Bay Area. I keep hearing from “official” sources such as EBMUD and this article that they charge a fair rate however when I speak to other Oakland EBMUD customers their bills seems to be all over the place.

    When I spoke to an EBMUD customer svc rep he let me know that in Oakland my bill will never be less than $100/billing cycle because of the set charges that are included in the bill regardless of how much water I use. I was also told by EBMUD that rates vary according to the city in which I live and that Oakland rates are higher.

    Raising rates for budget for infrastructure improvements makes sense BUT it makes me wonder what I’ve been paying for this whole time (?!?!) If Oakland rates are higher and there is a minimum of $100/billing cycle for service charges then why does Oakland have the least maintained pipelines. I repeat the vote for transparency not so much for salary info but for efficiency and overall use of revenue.

    Reply

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