South Bay water officials consider wholesale rate hike

Tuesday evening, the Board of Directors heard options to increase rates for its water wholesalers, which would ultimately affect 1.8 million people in Santa Clara County.

The Water District staff lowered their initial recommendation for the maximum possible increase of 32 percent instead to a 20 percent rate hike for water wholesalers. That would translate to about 5 dollars more a month for residents living in North Santa Clara County, which encompasses San Jose and Northwards.

The proposal would mean an additional $1.34 a month for people in South Santa Clara County, which includes Morgan Hill and Southwards.

The only member of the public to speak on the top spoke against the hike, and questioned if the Water District was making enough of its own cuts.

"I'm the face of your rate-payer," said Ruth Callahan of San Jose. "I have been rate increased to the max."

"We recognize the impact of the rates on the customers and community," said Santa Clara Valley Water District CEO Beau Goldie. "We take every rate extremely seriously."

The Water District says in a normal year, it pays up to $170 dollars per acre foot of water. Tuesday night, staff revealed the District just signed a contract to pay for up to $750 dollars per acre foot of imported water.

They anticipate if the drought continues, the price will skyrocket to $7,000 dollars per acre foot.

Still, some leaders hesitated passing such a large hike without first looking at the District's $557 million in reserves.

"I think we have an affirmative obligation to look at the totality of our program and not just say here are some costs and we're going to directly pass them on," said Board Director Barbara Keegan.

After three hours of discussion, the Board decided to review its reserves and vacancies. The Water District expects the moves to drop the proposed 20 percent rate hike even lower.

The Board will hear back from staff in April and will begin public hearings that month, and plans to officially set new rates in May.