Water rates for 1.3 million East Bay customers will increase beginning July 1.
The East Bay Municipal Utility District board of directors unanimously agreed Tuesday afternoon to raise rates by 6 percent in fiscal year 2012 and 6 percent in fiscal year 2013.
Board members said the two-year increase is necessary to cover rising expenses as well as a 15 percent drop in revenue due to lower water sales. They added that the rate hikes will help pay for much-needed projects and keep the district's bond ratings high.
"We have a fiduciary responsibility to our ratepayers to provide good, clean reliable water. This will help us do that," said board member Frank Mellon, whose district represents Castro Valley and parts of San Leandro, San Ramon and Hayward.
EBMUD officials said the average residential customers who use 270 gallons of water a day will see their monthly water bill rise from $38.66 to $40.98 on July 1. Next summer, that bill will jump from $40.98 to $43.45.
The board also approved an increase in its wastewater service charges. The average bill for those customers will rise from $15.10 to $16.94 over the next two years.
The water rate hike is part of the district's $372 million budget for fiscal year 2012 and its $395 million budget for fiscal year 2013. The current year's budget is $369 million.
Four members of the public spoke against the rate increases during Tuesday's hearing.
Sonia Diermayer said the district should look at revising its rate schedule rather than raising rates. She said she favors a rate plan that encourages customers to use less water and punishes those who use a lot.
"I would support a rate increase that supported a well-designed plan," Diermayer said.
Her words were echoed by David Nesmith. He said customers conserved water during the drought and now are being charged more when the water supply crisis is over.
"They feel like they are being penalized," said Nesmith.
He said customers should be rewarded when they use less water. He said wasting water hurts everybody.
"Water used in this district is water that can't be used in the environment."
Board members acknowledged the difficulty of raising rates while the economy is still struggling.
"Nobody on the board likes to see rate increases," said board chairman John Coleman, who represents Danville, Alamo and Lafayette as well as part of San Ramon, Walnut Creek and Pleasant Hill.
Coleman noted that district employees have accepted a pay freeze for the past two years to help cut costs. He also said one-third of the rate hike is being used to pay for projects to improve facilities. He said those programs will help avoid water rationing in the future.
He noted that keeping the district's bond rating at a high level saves the agency $1 million a year.
Director Katy Foulkes said the board wanted to keep the rate increase under 5 percent. However, it needed to institute the 6 percent hike if it wanted to maintain services.
"We would have been endangering our infrastructure," said Foulkes, who represents Piedmont, Orinda, Moraga and El Sobrante, as well as parts of Oakland, Pinole and Richmond.
Mellon made the motion to approve the budgets with the rate hikes. Foulkes seconded the motion and it was approved 6-0. Director Doug Linney was absent.
The hikes were approved after the board was told its water supply is well above normal this year because of the rainy weather in Northern California. The East Bay has received 112 percent of normal rainfall this year.
There is also 44 inches of snow at the district's main water supply station in the Sierra Nevada, an amount described as "unheard of at this time of year."
The board was told that the Sierra snowpack has started to melt only within the past few days as the weather finally warmed up.
Despite the late snow melt, Pardee Reservoir is at 101 percent of capacity and has been releasing water for several months now.