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The East Bay Municipal Utility District on Tuesday, June 9, adopted a two-year budget amidst financial constraints which will raise rates by 7.5 percent for each of the next two years. 

The increase will go into effect July 1. 

EBMUD provides drinking water for 1.3 million customers in Alameda and Contra Costa counties.  

The average residential water bill for all East Bay residents, including Berkeley, will increase by $2.88 to $35.95 per month for the financial year 2010, and by $2.71 to $38.66 per month for financial year 2011. 

Wastewater rates will increase by 5 percent in 2010 and 2011, according to the new budget. The average single family residential wastewater charge will be hiked by 62 cents per month in 2010 and 72 cents per month in 2011. 

A statement from EBMUD said the agency had adjusted the overall 7.5 percent rate increase for every customer in order to ensure that all groups were paying their share of total costs. 

The results of a required cost service study in 2009 by EBMUD show that single-family residential customers were not paying their entire percentage of costs and that other groups were paying more than their share. 

In 2010, rates for single-family residential customers will increase by 8.7 percent, and those for commercial and industrial customers by 5 percent. 

EBMUD customers are currently paying drought rates because of a water supply shortage declared almost a year ago. However, adequate rainfall and snow last winter, along with conservation, made the EBMUD board declare an end to the drought emergency, starting July 1. 

EBMUD officials hope that with the end of drought rates and adoption of the new rates starting next month, most customers will not see a significant change in their water bill. 

It is estimated that the average single-family residential customer will pay about 2 percent more this year compared to the drought rates. Customers who paid drought surcharges last year, agency officials said, may see their bill go down. 

Revenues for the water agency took a $30 million hit from the housing slump—fewer connection fees for new homes—and reduced water use. Making the situation worse, EBMUD said, are additional expenses for debt service for capital projects and increased costs for chemicals, self-insurance, employee salaries and health care among others. 

“This has been the most difficult budgeting process in years,” EBMUD Board President Doug Linney said in a statement. “To keep the rate increase as low as possible, we instituted a hiring freeze, delayed numerous capital projects, restricted travel and conferences, and deferred scheduled replacements of vehicles and equipment. However, EBMUD cannot cut back service to the point where it might impede our ability to provide our customers with the high-quality water and reliable service they expect from EBMUD.”