Safe Drinking Water Requires Ongoing
Investments
ACWD must make significant, ongoing investments to ensure the reliable delivery of safe drinking water to
your tap. Over the years, the costs of these investments have increased significantly. We have streamlined our
operations and cut costs wherever possible, but after years of drought, reduced revenue and the need to
revive important infrastructure projects, the financial pressure on operations is greater than ever. That is why
we are proposing a water rate increase to bridge the revenue gap.
Conservation is needed, but costly
Water utilities in California face a unique challenge. A record drought required substantial reductions in water
use. Less water used means less water sold, and therefore revenues are lower than forecast. Because many
of the costs associated with water delivery are fixed costs – they remain the same regardless of how much
water is sold. For example, costs associated with sourcing water and ensuring its purity cannot be cut to
offset falling revenue.
For ACWD, this has resulted in a 21 percent decline in water use since 2013 and a projected $60 million
revenue shortfall.
The Need for a Meaningful Solution
The decision to propose a rate increase is not something we take lightly. But, a
revenue gap of this size won’t be closed with stop-gap measures. In recent
years, we have taken every opportunity to reduce costs and avoid a rate increase. These steps include:
Reducing full-time staffing levels
Using reserve funds to reduce pressure on rates
Deferring in excess of $30 million in capital projects
Saving $4 million by decommissioning Mission San Jose Water Treatment Plant
Using our diverse supply portfolio to maximize the use of our least-expensive
water
www.acwd.org
Data and information as of January 2017
Financial Challenges
High fixed operating costs leaves little room to trim expenses — we have, where we can. Reduced
water sales have left revenue in a steady decline and there will not be an immediate bounce back from
the drought.

Pre-Recession Water Demand (FY 2007) : 44.7 million gallons daily (MGD)

Pre-Drought Water Demand (FY 2013): 41.7 MGD

Est. Demand (FY 2017): 32.8 MGD (~21%) Reduction from FY 2013
$60 million in revenue impacts as a result of the drought
Crucial Projects Can’t Wait Any Longer
ACWD postponed many capital improvements and retrofits to ease the pressure on customer rates. At this
point, however, some of these vital projects can’t wait any longer. Important retrofits are needed to ensure
our water supply is safe in the event of earthquake damage, and upgrading aging infrastructure is
something the district simply has to do.
Over time, neglecting infrastructure projects doesn’t save money, it costs money. It is far more expensive
to fix broken water mains and restore interrupted service than it is to perform scheduled maintenance and
upgrades.
These projects include:

$10 million per year to replace mains along our 900 miles of pipeline and to improve seismic reliability

$40.3 million to pay ACWD’s share of the Alameda Creek Fish Restoration Project

Investments in water supply reliability to address climate change and the vulnerability of the
Sacramento/San Joaquin Delta
The Proposed Water Rate Increase
ACWD proposed rate compared to 30 other Bay Area agencies
To offset this revenue gap, ACWD staff has suggested
the Board of Directors adopt a rate increase of about 40
cents per day for the average single-family residence.
Over our two month billing period, this would amount
to an increase of about $23.87 per bill.
Current Bill
New Bill
$95.51
$119.38
Proposed Rate: Avg.
ACWD Bi-monthly bill
$119.38
$0.00
$50.00
$100.00
$150.00
$200.00
Voice Your Opinion
A public hearing regarding the proposed rate increase will be held:
When: February 9, 2017 at 6 p.m.
Where: ACWD Headquarters
43885 S Grimmer Blvd, Fremont
For more information on the proposed rate increase, visit: www.acwd.org/rateproposal or call 510.668.4200