San Ramon residents may have to pay more for water services next year thanks to a vote Tuesday night to raise the maximum amount the local water district is allowed to charge its customers.
The Dublin San Ramon Services District after a two-hour public hearing voted to up a bimonthly fee from $18 to a possible $30 for 5,500 customers in the Dougherty Valley.
In a separate vote, trustees approved a rate increase for its sewer customers, 5,100 of whom are from southern San Ramon. On average, that rate hike will amount to 13 percent. But for bigger customers, like schools, that increase could total more than 50 percent.
The district needs the money to improve its credit rating so it can refinance from a variable to fixed interest rate some $38.5 million in bond debt – money used from 2003 to 2008 to pay for a reservoir and pipelines for new subdivisions.
If the fees and rates remained the same, the agency would risk defaulting on its loans and its budget gap next year would widen from $800,000 to $1.5 million, said district finance manager Lori Rose. Also, investors may sue the district for repayment.
"We have a long-standing policy to use debt only to build things, like the infrastructure that allows Dougherty Valley and eastern Dublin to exist," said Director Richard Halket. "We have a long-standing policy to have developers pay for debt. However, when there is no development, this falls to the rate payers. I hate this charge, but we can't default on our bonds."
Before the recession, the district paid off its debts with water hookup fees, most of those for new subdivisions, including many in Dougherty Valley and eastern Dublin. But with construction at a standstill, and those connection fees virtually gone, the district said it has no alternative but to shift the burden to customers.
"We've told customers for years that growth pays for itself, never knowing that in 2008, the world would collapse," said Georgean Vonheeder-Leopold, a member of the district's board of directors.
More than 40 people attended the meeting, several of them from San Ramon, including one of the city's parks commissioners. Five people spoke against the higher charge and rate increase. The district received 55 letters protesting the sewer rate increase and 67 against the higher infrastructure charge.
All but one speaker during the public hearing opposed the fee and rate hikes. The one in favor works for the district as an analyst. He drew jeers for voicing support for the fee increase, a sacrifice he said is necessary in a sickly economy.
Windemere resident Sandeep Harigopal, 40, said he doesn't understand the logic behind taxing customers in an attempt to get a loan at a higher interest rate.
Others said they worry that the so-called "temporary infrastructure charge" isn't actually temporary, that it seems indefinite. The district said it plans to do away with the charge once it starts generating revenue from water connection fees again.
Harigopal and one of his neighbors, who also spoke at the meeting, asked why the district is upping the charge just a year after putting it in place and whether that's because of lack of foresight.
The actual rate increase won't happen until later this year, when trustees revisit the issue with a separate vote. The wastewater rate change will come in two stages, with two-thirds of the increase taking effect Jan. 1 and the rest on July 1 next year.
The agency has already slashed operating expenses by $4.3 million and laid off 17.5 percent of its workforce in the past year. Employees have taken unpaid furlough days and given up cost-of-living increases along with some benefits.
The district serves 145,000 people by supplying potable and recycled water to Dublin and the Dougherty Valley and sewer collection and treatment to southern San Ramon, Dublin and the City of Pleasanton.