After a series of public meetings on the subject, the Zone 7 Water Agency Board of Directors is scheduled to vote on proposed water rates for the upcoming four years at their regular meeting Wednesday night.
Though a few different options are still on the table, staff has whittled down various proposals to one recommendation, based on feedback from board directors, community members and retailers.
The final recommendation would provide $3 million for water supply reliability projects and fully fund three reserves at target levels. It would also account for a consumer price index (CPI) rate increase and gradually increasing the fixed charge component from 35-45% by 2022, as did all the options previously evaluated.
This option would increase water rates by about 3.7% per year, plus the 3% CPI adjustment, for 6.7% increase per year overall.
While staff recommends that directors adopt a four-year rate schedule, the board could also decide on a two or three-year plan.
The proposed water rate increases have raised some concerns from the community, including residents and the city of Pleasanton, one of the agency's retailers. As Zone 7 serves as the potable water wholesaler for southern Tri-Valley water service providers, the cost of purchasing water is passed through to residential and commercial customers via local providers, such as the city of Pleasanton.
Pleasanton city officials, though, believe there should be more time for water providers and residents to review the latest proposal. The City Council is considering a resolution Tuesday night asking Zone 7 to delay its vote.
The options presented over the past few months were crafted based on a recent cost study by utility consultant Raftelis, hired by Zone 7 to determine treated water rates for 2019-22. The different scenarios would have different implications for the agency's reserve funds and ratepayers -- some options would be more expensive for consumers but provide more money for operating, emergency and drought reserves, in addition to funding water supply reliability projects.
At Zone 7's Sept. 19 board meeting, staff presented two scenarios that would fund water supply reliability projects between $9 million and $15.2 million over the next four years. But since then, they have revised this suggestion, now proposing to reduce this amount to $3 million, until more information is available.
"While this is a reasonable approach to reduce customer impacts, it's recommended that the Agency fund water supply reliability projects in the future and review reserve fund requirements and fund reserves based on industry standards and practices," staff wrote in their report.
The rate increases would affect residents differently, depending on water usage -- measured in centum cubic feet (ccf), which is equivalent to 748 gallons of water. According to the U.S. Environmental Protection Agency, an average American uses 100 gallons of water per day.
Initially, staff evaluated rates for a household using 10 ccf of water per month, but after directors and community members pointed out that many Livermore and Pleasanton residents use more than this, they assessed the rate increases for other usage amounts as well.
Under the proposed recommendation, customers at the 10 ccf water rate would see a $1.50 increase in their monthly bills next year, up to a $2.31 increase in 2022. Those using 20 ccf of water per month would pay an additional $2.99 monthly next year, up to an extra $4.63 by 2022.
There is one alternative option being presented Wednesday. The other scenario would only fund two reserves at target levels, capping the water rate increase at 3% per year (or 6% per year when the additional CPI increase is factored in).
Under this alternative scenario, those at the 10 ccf water usage level would see their bills only go up by $1.31 next year up to $1.95 by 2022; those using 20 ccf would pay an extra $2.63 per month next year and an additional $3.90 by 2022.
Some residents have posed concerns about the pending rate increases. Resident Vin Poh'ray wrote the board and staff, critiquing that a "zero rate increase" option was never considered.
"Reserves are being attempted to be funded directly at 'Target' levels vs. examining reaching 'minimum needed' levels first," he wrote.
The board is also considering approving 2019 rates for untreated water, a service Zone 7 provides to 81 people in their jurisdiction. Proposed rates for untreated water come out to a delivery charge of $167 per acre-foot for all metered water delivered per month, while the temporary untreated water service monthly rates come out to a charge of $860 per acre-foot, or $2.64 per 1,000 gallons. The non-scheduled untreated service rates would also be $860 per acre-foot.
The meeting is scheduled to begin at 7 p.m. at the Zone 7 administration building, 100 N. Canyons Pkwy. in Livermore.
In other business
* Directors will also consider approving proposed 2019 municipal and industrial water connection fees for new developments.
Currently, the Alameda County fee is $28,170 per dwelling unit equivalent while Dougherty Valley's fee is $27,030. The proposed fees would see the Alameda County fee going up to $29,070 and Dougherty Valley's increasing to $27,900.
* During closed session before the open meeting, the board will confer on labor negotiations with local employee unions.
Also in closed session, directors will confer with legal counsel on one case of potential litigation, and one case of existing litigation the agency faces, filed by Edwin and Ginger Belshe.