News

Double-digit water rate increases on the way

Water use could cost at least 28 percent more in the next fiscal year

California's statewide drought is expected to hit the pocketbooks of Mountain View residents in the coming months, in part because of their own conservation efforts. Both of the city's water suppliers are strapped for cash because of lost revenue resulting from lower water sales, and are now considering double-digit increases on rates to make up for it.

It's a classic case of unintended consequences: The Santa Clara Valley Water District and the San Francisco Public Utilities Commission have been calling on residents and businesses to reduce water use to offset the harsh drought conditions and lack of rainfall. But now, as lower bill payments reflecting reduced water usage take their financial toll on the agencies, officials from both say they are forced to make cuts and increase rates to make up for the anticipated losses in the next fiscal year.

The SFPUC is proposing a 28 percent rate increase, which would affect a majority of the city north of Cuesta Drive. The SCVWD initially proposed a 31.5 percent, which would affect the remaining residents, although the district's staff is looking at ways to bring that number down to 15.8 percent.

Water rates help pay for operating and maintaining pipes and water treatment, as well as long-term improvements to the water system, according to Tyrone Jue, SFPUC director of communications. Budgetary needs are not going to change, Jue said, and to pay for these projects and infrastructure in full, the agency needs to make up about $6 million in lower water sales through increased rates.

Budget projections by the commission show water rates stabilizing in the years following the 2015-16 fiscal year rate hike, followed by modest increases by 2018-19. Rates are not expected to go down at any point before the 2019-20 fiscal year.

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On top of funding day-to-day operations, water rates help pay for expanding the SFPUC's pipe systems to Cherry Lake, repairing facilities that were damaged by the 2013 rim fire in the Yosemite area, and eight different seismic retrofitting projects that will make it possible for the agency to deliver water within 24 hours of a major earthquake, Jue said.

Mountain View's finance department was not able to provide a good idea of how much the rate hike would cost city residents by the Voice's press deadline, but there is a rate stabilization fund and emergency reserves available, according to Patty Kong, the city's finance and administrative services director.

The SCVWD is looking to recoup $27.8 million from ratepayers to make up for an expected $65 million drop in funds resulting from lost revenue and drought response measures. Rather than take up the proposed 31.5 percent rate hike at first glance, district board members sought ways to mitigate the harsh increase.

The water district could potentially bring that number down to just 15.8 percent, provided it sells off acres of district-owned land in the South County area, delay improvement projects at facilities like Anderson Dam, and "tighten" appropriations for capital improvement projects, according to a staff report.

While the measures would dull the sharp rate hike, they would effectively kick the can down the road. Rates are expected to increase by about 54 percent over the next four years no matter what, according to budget projections, and putting off projects now will mean an uptick in costs in later years.

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There was no clear consensus among board members at the April 14 meeting on which option would be better. Board member Linda LeZotte supported the 31.5 rate increase, saying it's a matter of deciding whether to "bite the bullet" now rather than later. People are going to end up paying about 54 percent more by the 2018-19 fiscal year either way, LeZotte said.

Board member Barbara Keegan has been a proponent of "smoothing out" rate increases over the coming years. Sudden, large increases can strain city resources, Keegan said, and forces cities to tap into reserves. While she acknowledged a 31.5 percent increase would send a strong message about the drought, she said it's important not to overburden cities.

"That's our challenge. It's finding that balance point between a huge increase that may be untenable to the public versus getting their attention to the fact that this drought is real (and) we are incurring real costs," Keegan said.

Board member Tony Estremera sided with LeZotte, saying the district would be "penny wise and a pound foolish" to put off financing and allow interest rates and construction costs to go up. Estremera, who represents an area of the South Bay including East San Jose, said bumping up costs might also be the best way to get people serious about conservation.

He pointed out that North County residents in cities like Mountain View and Palo Alto pay more for their water and are the "guys who are conserving the most." It's likely, he said, that costs are fueling the conservation.

"I more than anybody, who represents people who are not at the top of the list in income in this Valley, am pretty sensitive about this. But I don't think I'm going to help any of my constituents by putting everything off," Estremera said. "These rates have to reflect reality."

District staff also explored the possibility of allowing companies to advertise at district facilities and sell naming rights to sponsors. While staff recommended against doing both, some board members felt there was potential for extra funds to be had.

Board president Gary Kremen said he'd be interested to see if the district could have companies and other sponsors add their name to the water district's facilities, similar to the Oracle Arena in Oakland and the SAP Center in San Jose. Stan Yamamoto, the district's legal counsel, cautioned against it because the district would have a hard time rejecting sponsors and controlling messages sent out in newsletters.

"I guess if I was an attorney representing Major League Baseball I might have a different view, but I don't," Yamamoto said.

Pressure from the state

Gov. Jerry Brown announced earlier this month that the state is imposing a 25 percent restriction on water use. The move was a step up from the usual response of urging people to voluntarily reduce water use, and was a clear indication that the State Water Resources Control Board was going to start taking compliance seriously.

Following the announcement, the state board issued details of a tiered system that puts greater conservation targets on cities and water retailers that use more water per person than others. Low-use cities like San Bruno will have to reach a target of 8 percent water use reduction because the city's residents, on average, only use only about 56 "gallons per capita day."

On the other end of the spectrum is the California Water Service Company's Bear Gulch district, which provides water to mid-peninsula residents in Atherton, Portola Valley, Woodside and parts of Menlo Park. In some of those areas, residents use over 252 gallons of water per day on average, and are faced with a conservation target of 36 percent.

The city of Mountain View must reduce usage by 16 percent, as residents clocked in at 83 gallons of water used per day between July and September of last year. This is a step back from earlier this month when the city was slapped with a preliminary 20 percent water use reduction goal by the state board, according to Elizabeth Flegel, Mountain View's water conservation coordinator.

While it may seem natural to demand greater conservation from high-use residents, the "gallons per capita day" measure does not take into account local rainfall, temperature, population growth, population density or average income, which all have an effect on water use, according to the State Water Resources Control Board website.

Flegel said the city still has to wait until early May for the finalized reduction targets, but it's not waiting until then to start developing new reduction plans for the city. She said there will be a big "outreach component" that will include providing information on the drought and the kinds of programs that are available to people looking to bring down their water usage.

She said the city's conservation department will continue to encourage residents to consider replacing lawns with low water-use landscaping and drought-resistant plants, and pointed out that the Santa Clara Valley Water District has cranked up its rebate program for re-landscaping from $1 to $2 for every square foot of irrigated turf or swimming pool replaced.

Plans also include creating a "demonstration garden" at the Mountain View Public Library to give the public an up-close look at the kinds of low water-use plants they could install in their own gardens.

"Sometimes it's nice to see what the plants look like when they're fully grown," Flegel said.

Residents in Mountain View appear to be very aware of the harsh drought conditions the state has been faced with in the last four years, and are watching out for water wasters across the city. Flegel said the water conservation hotline has been hit with a barrage of drought-related messages -- about 400 so far this year, and 140 in March alone -- through phone calls, submitted reports to [email protected] or the "Ask Mountain View" function on the city's website.

But while it may seem counter-intuitive, residents might want to hold off on sending a report if they see a geyser of water shooting out of a fire hydrant at 500 gallons per minute. The city is going through a months-long process of flushing out its water system, which city officials say is a necessary process that has the appearance of flagrant water waste.

Gregg Hosfeldt, Mountain View's assistant public works director, said delays in cleaning out the system and lower water use have combined to lower the city's water quality in recent months, prompting complaints from residents about water odor and taste. To do a good job getting rid of the accumulated sediment, Hosfeldt said, it's necessary to blast water out of a hydrant at the highest rate possible to kick everything up and clean out the water.

"We're at a point now where we need to do that," he said.

Rather than take questions to the city, residents have been sending images and video to print and television media, and Hosfeldt said they've had to respond to four different stories on television news in the last couple of months regarding the water maintenance. The reality is, he said, that it's an essential part of maintaining water quality, and it doesn't use up that much water in the grand scheme of things.

Hosfeldt estimates that it takes about 3 to 4 million gallons of water each year to flush the whole system, compared with the 9 million gallons used across the city each day. That amounts to less than 1 percent of the total water used annually, and a fraction of the volume of water the city and residents have conserved in recent years.

Hosfeldt said the extra attention on water use and conservation in light of the drought can be seen as a positive thing, as people put a critical eye on how water resources are spent throughout the city.

"It's an opportunity to educate people in how you run a water system," he said. "These are things that go on all the time, but it's getting visibility now."

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Double-digit water rate increases on the way

Water use could cost at least 28 percent more in the next fiscal year

by / Mountain View Voice

Uploaded: Thu, Apr 23, 2015, 10:53 am

California's statewide drought is expected to hit the pocketbooks of Mountain View residents in the coming months, in part because of their own conservation efforts. Both of the city's water suppliers are strapped for cash because of lost revenue resulting from lower water sales, and are now considering double-digit increases on rates to make up for it.

It's a classic case of unintended consequences: The Santa Clara Valley Water District and the San Francisco Public Utilities Commission have been calling on residents and businesses to reduce water use to offset the harsh drought conditions and lack of rainfall. But now, as lower bill payments reflecting reduced water usage take their financial toll on the agencies, officials from both say they are forced to make cuts and increase rates to make up for the anticipated losses in the next fiscal year.

The SFPUC is proposing a 28 percent rate increase, which would affect a majority of the city north of Cuesta Drive. The SCVWD initially proposed a 31.5 percent, which would affect the remaining residents, although the district's staff is looking at ways to bring that number down to 15.8 percent.

Water rates help pay for operating and maintaining pipes and water treatment, as well as long-term improvements to the water system, according to Tyrone Jue, SFPUC director of communications. Budgetary needs are not going to change, Jue said, and to pay for these projects and infrastructure in full, the agency needs to make up about $6 million in lower water sales through increased rates.

Budget projections by the commission show water rates stabilizing in the years following the 2015-16 fiscal year rate hike, followed by modest increases by 2018-19. Rates are not expected to go down at any point before the 2019-20 fiscal year.

On top of funding day-to-day operations, water rates help pay for expanding the SFPUC's pipe systems to Cherry Lake, repairing facilities that were damaged by the 2013 rim fire in the Yosemite area, and eight different seismic retrofitting projects that will make it possible for the agency to deliver water within 24 hours of a major earthquake, Jue said.

Mountain View's finance department was not able to provide a good idea of how much the rate hike would cost city residents by the Voice's press deadline, but there is a rate stabilization fund and emergency reserves available, according to Patty Kong, the city's finance and administrative services director.

The SCVWD is looking to recoup $27.8 million from ratepayers to make up for an expected $65 million drop in funds resulting from lost revenue and drought response measures. Rather than take up the proposed 31.5 percent rate hike at first glance, district board members sought ways to mitigate the harsh increase.

The water district could potentially bring that number down to just 15.8 percent, provided it sells off acres of district-owned land in the South County area, delay improvement projects at facilities like Anderson Dam, and "tighten" appropriations for capital improvement projects, according to a staff report.

While the measures would dull the sharp rate hike, they would effectively kick the can down the road. Rates are expected to increase by about 54 percent over the next four years no matter what, according to budget projections, and putting off projects now will mean an uptick in costs in later years.

There was no clear consensus among board members at the April 14 meeting on which option would be better. Board member Linda LeZotte supported the 31.5 rate increase, saying it's a matter of deciding whether to "bite the bullet" now rather than later. People are going to end up paying about 54 percent more by the 2018-19 fiscal year either way, LeZotte said.

Board member Barbara Keegan has been a proponent of "smoothing out" rate increases over the coming years. Sudden, large increases can strain city resources, Keegan said, and forces cities to tap into reserves. While she acknowledged a 31.5 percent increase would send a strong message about the drought, she said it's important not to overburden cities.

"That's our challenge. It's finding that balance point between a huge increase that may be untenable to the public versus getting their attention to the fact that this drought is real (and) we are incurring real costs," Keegan said.

Board member Tony Estremera sided with LeZotte, saying the district would be "penny wise and a pound foolish" to put off financing and allow interest rates and construction costs to go up. Estremera, who represents an area of the South Bay including East San Jose, said bumping up costs might also be the best way to get people serious about conservation.

He pointed out that North County residents in cities like Mountain View and Palo Alto pay more for their water and are the "guys who are conserving the most." It's likely, he said, that costs are fueling the conservation.

"I more than anybody, who represents people who are not at the top of the list in income in this Valley, am pretty sensitive about this. But I don't think I'm going to help any of my constituents by putting everything off," Estremera said. "These rates have to reflect reality."

District staff also explored the possibility of allowing companies to advertise at district facilities and sell naming rights to sponsors. While staff recommended against doing both, some board members felt there was potential for extra funds to be had.

Board president Gary Kremen said he'd be interested to see if the district could have companies and other sponsors add their name to the water district's facilities, similar to the Oracle Arena in Oakland and the SAP Center in San Jose. Stan Yamamoto, the district's legal counsel, cautioned against it because the district would have a hard time rejecting sponsors and controlling messages sent out in newsletters.

"I guess if I was an attorney representing Major League Baseball I might have a different view, but I don't," Yamamoto said.

Pressure from the state

Gov. Jerry Brown announced earlier this month that the state is imposing a 25 percent restriction on water use. The move was a step up from the usual response of urging people to voluntarily reduce water use, and was a clear indication that the State Water Resources Control Board was going to start taking compliance seriously.

Following the announcement, the state board issued details of a tiered system that puts greater conservation targets on cities and water retailers that use more water per person than others. Low-use cities like San Bruno will have to reach a target of 8 percent water use reduction because the city's residents, on average, only use only about 56 "gallons per capita day."

On the other end of the spectrum is the California Water Service Company's Bear Gulch district, which provides water to mid-peninsula residents in Atherton, Portola Valley, Woodside and parts of Menlo Park. In some of those areas, residents use over 252 gallons of water per day on average, and are faced with a conservation target of 36 percent.

The city of Mountain View must reduce usage by 16 percent, as residents clocked in at 83 gallons of water used per day between July and September of last year. This is a step back from earlier this month when the city was slapped with a preliminary 20 percent water use reduction goal by the state board, according to Elizabeth Flegel, Mountain View's water conservation coordinator.

While it may seem natural to demand greater conservation from high-use residents, the "gallons per capita day" measure does not take into account local rainfall, temperature, population growth, population density or average income, which all have an effect on water use, according to the State Water Resources Control Board website.

Flegel said the city still has to wait until early May for the finalized reduction targets, but it's not waiting until then to start developing new reduction plans for the city. She said there will be a big "outreach component" that will include providing information on the drought and the kinds of programs that are available to people looking to bring down their water usage.

She said the city's conservation department will continue to encourage residents to consider replacing lawns with low water-use landscaping and drought-resistant plants, and pointed out that the Santa Clara Valley Water District has cranked up its rebate program for re-landscaping from $1 to $2 for every square foot of irrigated turf or swimming pool replaced.

Plans also include creating a "demonstration garden" at the Mountain View Public Library to give the public an up-close look at the kinds of low water-use plants they could install in their own gardens.

"Sometimes it's nice to see what the plants look like when they're fully grown," Flegel said.

Residents in Mountain View appear to be very aware of the harsh drought conditions the state has been faced with in the last four years, and are watching out for water wasters across the city. Flegel said the water conservation hotline has been hit with a barrage of drought-related messages -- about 400 so far this year, and 140 in March alone -- through phone calls, submitted reports to [email protected] or the "Ask Mountain View" function on the city's website.

But while it may seem counter-intuitive, residents might want to hold off on sending a report if they see a geyser of water shooting out of a fire hydrant at 500 gallons per minute. The city is going through a months-long process of flushing out its water system, which city officials say is a necessary process that has the appearance of flagrant water waste.

Gregg Hosfeldt, Mountain View's assistant public works director, said delays in cleaning out the system and lower water use have combined to lower the city's water quality in recent months, prompting complaints from residents about water odor and taste. To do a good job getting rid of the accumulated sediment, Hosfeldt said, it's necessary to blast water out of a hydrant at the highest rate possible to kick everything up and clean out the water.

"We're at a point now where we need to do that," he said.

Rather than take questions to the city, residents have been sending images and video to print and television media, and Hosfeldt said they've had to respond to four different stories on television news in the last couple of months regarding the water maintenance. The reality is, he said, that it's an essential part of maintaining water quality, and it doesn't use up that much water in the grand scheme of things.

Hosfeldt estimates that it takes about 3 to 4 million gallons of water each year to flush the whole system, compared with the 9 million gallons used across the city each day. That amounts to less than 1 percent of the total water used annually, and a fraction of the volume of water the city and residents have conserved in recent years.

Hosfeldt said the extra attention on water use and conservation in light of the drought can be seen as a positive thing, as people put a critical eye on how water resources are spent throughout the city.

"It's an opportunity to educate people in how you run a water system," he said. "These are things that go on all the time, but it's getting visibility now."

Comments

And you thought rent was high
Monta Loma
on Apr 23, 2015 at 6:32 pm
And you thought rent was high, Monta Loma
on Apr 23, 2015 at 6:32 pm

And you thought rent was high, wait till this trickles down on renters.


And you thought rent was high
Monta Loma
on Apr 23, 2015 at 6:32 pm
And you thought rent was high, Monta Loma
on Apr 23, 2015 at 6:32 pm

And you thought rent was high, wait till this trickles down on renters.


Mister Tee
Cuesta Park
on Apr 24, 2015 at 4:38 am
Mister Tee, Cuesta Park
on Apr 24, 2015 at 4:38 am

Just great, conserve and get penalized.

Time to hire a Rain Maker.


BD
Cuesta Park
on Apr 24, 2015 at 7:12 am
BD, Cuesta Park
on Apr 24, 2015 at 7:12 am

"This water brought to you by Nestle" -- Gary Kremen. Sheesh. Give me a break.


Peter Boyd
another community
on Apr 24, 2015 at 8:32 am
Peter Boyd, another community
on Apr 24, 2015 at 8:32 am

You get what you vote for, 25 years and counting.............

Peter
San Francisco


JoeCommentor
another community
on Apr 24, 2015 at 8:45 am
JoeCommentor, another community
on Apr 24, 2015 at 8:45 am

Sure glad we're building more houses to protect us from the drought...


Here we go agail
Rengstorff Park
on Apr 24, 2015 at 10:42 am
Here we go agail, Rengstorff Park
on Apr 24, 2015 at 10:42 am

I was expecting this. Same thing happened last drought. Save water, use half as much, and your utility wants to increase your bill. It was supposed to be temporary. It wasn't. In the late 1970's, California had a severe drought and the cost of water was increased to cover the amount lost due to conservation efforts. The utilities were supposed to use the money for water system improvements. The increases were supposed to be reversed when the shortage was over.
Neither happened. The water districts then came up with legislation to spend billions of tax dollars for the improvements. Since the improvements were voted down, the utilities never had to make improvements. And the per unit cost never went back to the original value.
So, that's what's going to happen this time as well.
BTW: there has to be a better way to clean out the water mains than "flushing" millions of gallons of water down the drain. Like using robots. Or smart "pigs". Give the problem to a High School Robotics team - they'll come up with a solution.
Maybe this time, they can spend our money on actual improvements.


Steve
Shoreline West
on Apr 24, 2015 at 12:06 pm
Steve, Shoreline West
on Apr 24, 2015 at 12:06 pm

@Peter Boyd

"You get what you vote for, 25 years and counting"

You voted for a drought?


Steve
Shoreline West
on Apr 24, 2015 at 12:08 pm
Steve, Shoreline West
on Apr 24, 2015 at 12:08 pm

The increase should not apply to Tier 1. Everybody's problems are solved.

btw - the percentage decrease mandate is idiotic. It penalizes those who were already conserving. It should be a flat gallons-per-person.


True
Registered user
Blossom Valley
on Apr 25, 2015 at 11:28 am
True, Blossom Valley
Registered user
on Apr 25, 2015 at 11:28 am

So we are threatened with fines by the city, state and the water district if we don't conserve water....and then when we do the Water Company raises our rates.

This situation sits squarely on the head of anyone who was involved in the blocking of dam projects in CA in the 70's.

We needed additional storage then. They blocked the projects. Our population has grown ~2x since then with no increase in storage.

So you have indeed got the state that you voted for.


Tom
North Whisman
on Apr 27, 2015 at 8:36 am
Tom, North Whisman
on Apr 27, 2015 at 8:36 am

@Steve: the water district did the same thing in the '87-'95 drought: compute reductions based on a year where people had been asked to reduce, thereby penalizing the water-thrifty. That's why I've ignored the requests for voluntary water reduction. I knew I'd only get burned if I cut back.

@True: we have plenty of water in this state for its residents, and would continue to have plenty of water if agriculture was more sensible in its use. Why should the state build more dams if that water is just going to be used to grow alfalfa for export to China?


True
Registered user
Blossom Valley
on Apr 27, 2015 at 9:15 am
True, Blossom Valley
Registered user
on Apr 27, 2015 at 9:15 am

@Tom

Because Agriculture is a global industry that contributes ~$1.9B to our economy and employs (direct and indirect) about 3 million people in the state.


Tom
North Whisman
on Apr 27, 2015 at 11:18 am
Tom, North Whisman
on Apr 27, 2015 at 11:18 am

@True: why should the state be building more dams to subsidize such a small portion of our economy ($1.9B out of $2,200B that is the CA state economy)?


True
Registered user
Blossom Valley
on Apr 27, 2015 at 2:46 pm
True, Blossom Valley
Registered user
on Apr 27, 2015 at 2:46 pm

@Tom

Ag isn't going away. Nor should it.

More storage means that in wet years we'll be able to sock away water to get us through the dry and mitigate negative impact on the economy and food costs, w/o rationing residential use and maintain stream flows allowing river spawning fish (salmon & steelhead etc) stocks to remain robust.

Those dam projects cancelled in the 70's were sorely needed then. With CA population now roughly double it's long past time to revive them.


Hydro
Cuesta Park
on Apr 29, 2015 at 6:01 am
Hydro, Cuesta Park
on Apr 29, 2015 at 6:01 am

Increasing the supply will just mean farmers will continue to expand to their water thirsty crops because they would have more water.
The argument that simply building dams will save us is the same argument that printing money will fix out debt. We need to curb "Spending"

If we do not have ag restrictions on use and crop designated areas(no almond groves allowed in desert areas), if we do not have a limit on new sewer permits issued (more residents coming in) we'll simply use up all the reserves and be I the exact same boat we're in now.


True
Registered user
Blossom Valley
on Apr 29, 2015 at 8:45 am
True, Blossom Valley
Registered user
on Apr 29, 2015 at 8:45 am

@Hydro

I've not asserted that there shouldn't be a push to encourage more efficient water use by agriculture. I don't however think that should come in the form of blanket mandates on what crops should/shouldn't be grown.

All users should be looking for ways to use water more efficiently. The bottom line though is that we didn't have enough storage for our needs 40yrs ago. The doubling of the state population since then has exacerbated that problem.

We had an opportunity to build in a buffer for the dry years and we were misguided in passing it up. It's long past time to rectify that error.


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