January 25, 2017
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Things to Know about Zone 7's Water Rates

Zone 7’s mission is to provide “a reliable supply of high quality water…in a fiscally responsible…way.” Sensible rates are critical to accomplishing that mission, as is assuring the financial health of the public agency serving this community.

1. Background/History. In 2008, with the economy crashing, Zone 7 began a program to focus on cost controls. Doing more with less became a way of life at Zone 7. In October 2014, as the first summer of the drought drew to a close, the Board considered staff recommendations for a rate increase and decided, instead, to utilize reserves, adopt a much smaller increase and save the public the impacts of a higher increase. However, as the state’s drought emergency was extended into 2015, financial impacts became even more significant and Zone 7 brought in a consultant, Raftelis, to conduct a “Cost of Service” study.

2. Cost Controls and Cost-Cutting Measures have been implemented but have not been enough for financial sustainability without rate increases. Cost-cutting and cost-control measures in recent years include participation in a chemical consortium, various energy-use efficiency and reduced power cost programs, an ongoing soft hiring freeze, delayed hiring for critical positions, maintaining the relatively low pension program (1.49% at 55), continuing employees’ full payment of their share of pension contributions, adding staff only when there is a permanent need and it is less expensive than using contract labor (for example, adding Supervisory Control and Data Acquisition specialists), no employee cost-of-living pay increases during a couple years of the economic crash and having employees begin contributing 10% towards their medical costs. As a result, for the 2015-16 fiscal year that just ended, operating expenses were $3.7 million under budget.

Each year, the projects planned in Zone 7’s Capital Improvement Program (CIP) are reviewed and, if possible, projects are downsized or deferred. However, sometimes external conditions change and Zone 7 must add new projects or accelerate projects already in the Program. For instance, during the drought when imported supplies were nearly cut off, two major projects were accelerated to improve water supply reliability. Because of the financial impacts of accelerating these projects, Zone 7 applied for (and received) grants to partially fund these projects and reduce impacts on ratepayers.

Upcoming Meetings:

Public Informational Workshop with Staff on Water Rates 

Date: Mon., Jan. 30, 2017, 5 p.m.
Where: Zone 7 Water Agency, 100 North Canyons Parkway, Livermore

Finance Committee Meeting 

Date: Mon., Feb. 6, 2017 at 1 p.m.
Where: Zone 7 Water Agency, 100 North Canyons Parkway, Livermore

Board of Directors Meeting

Date: Wed., Feb. 15, 2017, 7 p.m.
Where: Zone 7 Water Agency, 100 North Canyons Parkway, Livermore

Flood Preparedness

  • To learn about Zone 7's flood protection program, click here.
  • For the state's flood preparedness website, click here.


The Tri-Valley Water-Wise Gardening website provides water-efficiency tips for landscaping and gardening based on climate and other factors specific to our region. To learn more, visit

Check the websites of your local retailer:
- City of Pleasanton
- City of Livermore
- California Water Service Co. - Livermore
- Dublin San Ramon Services District

For rebate information, click here.

Report a Spill or Dumping

Zone 7 owns many flood control channels and creeks in the Cities of Livermore, Pleasanton and Dublin, and in unincorporated areas of Eastern Alameda County. If you see a spill or dumping in any waterway, follow the directions below to report it:

1. If a spill is currently happening, call 911.

2. If the situation is not urgent, call: 

  • Zone 7 Administrative offices at (925) 454-5000 during business hours, Monday-Friday, 8 a.m. to 5 p.m.
  • Water Treatment Plant Operator at (925) 447-6704, ext. 1, during non-business hours

Another example was when the state adopted new chromium standards and a project had to be added to the CIP to treat the water from certain wells. In an effort to control costs, staff considered whether alternative solutions might be available; after hydraulic modeling and negotiations with the regulatory agencies, Zone 7 received approval for an alternative project to blend water that cost a fraction of what it would have cost to treat the water.

3. Zone 7’s rates have three components – a fixed charge, a volume-based charge and a temporary surcharge due to sunset at the end of 2017. In October 2015 the Board approved a three-year rate increase to help the Agency recover from financial losses and better ensure adequate revenues and financial health in the future. In addition, a temporary surcharge of 57 cents was approved for 2016. The 2015 decision to increase the wholesale water rates over a three-year horizon was done to provide greater predictability and stability for our customers and for Zone 7; to improve the ability of Zone 7 to plan for and finance deferred and badly-needed equipment replacements and capital projects; to begin to restore the financial health of the agency; and to streamline the rate-setting process for improved efficiency by reducing administrative staff time spent on water rates.

In October 2016, the Board considered a proposed temporary surcharge of 62 cents for 2017 and decided instead to repeat the 2016 level of 57 cents for one more year. The 57-cent Temporary Surcharge sunsets on December 31, 2017. In October 2016, the Board also adjusted the water rate structure to break into a fixed component and a volume-based component. For the average user (10 ccf/month), this structural change will not have any impact on rates. With the one-year extension of the 57-cent Temporary Surcharge, the rate increases for the average user are still based on those adopted by the Zone 7 Board in October 2015. However, the rate increases are probably most evident when rate payers see the increased bills for higher summer demands when outside irrigation is in use; after the drought, a return to outside irrigation occurred for the first time in 2016.

Many of the costs of operation, routine and planned maintenance remain the same no matter how much water customers buy. Similar to a mortgage on a home, the monthly cost is the same regardless of how many nights are spent in the home; this is a fixed cost. In contrast, the cost of staying in a hotel is based on the number of nights spent in the hotel; this is a variable cost. Recovering fixed costs is critical to Zone 7’s financial sustainability and ability to continue providing clean, reliable water to its customers. Stable revenues allow for planned maintenance activities that, if deferred, would likely cost much more should emergency repairs be required and could risk service interruption.  Forgoing upkeep on the maintenance of the water systems that the Tri-Valley depends upon is not an option. Last week DSRSD spokeswoman Sue Stephenson was quoted in the Pleasanton Weekly stating that “They’re billing us differently than they used to, and it’s smarter,” Stephenson said. “The drought got a lot of agencies to look at their rate structures and realize that when people cut back on water use, the cost of providing service remains.”

Zone 7 was forced to use $16 million in reserves in the 2014-15 fiscal year, and another $9 million in FY 2015-16 to cover the Agency’s drought-related expenses and reduced revenues from water sales to cover largely-fixed costs. The adopted rates for 2017 will help continue to balance revenues and expenses. Reserves will be slowly rebuilt; projections are that Zone 7 will restore its reserves to minimum target levels in 2-3 years.

4. Producing high quality, reliable water is becoming ever more expensive.  The world of water is changing. New contaminants are often discovered. For many decades, Zone 7 planned to add ozone to its two surface water treatment plants to reduce seasonal tastes and odors from algae. However, the impact of algal toxins was highlighted in August of 2014, when the City of Toledo, Ohio, issued a “Do Not Drink” order to the entire community when water samples tested positive for microcystin, an algal toxin. This impacted over 500,000 residents in the Toledo area. In December of 2015, and again in December of 2016, toxic levels of blue-green algae were detected in Lake Del Valle prompting the East Bay Regional Park District to close the lake to swimming and any bodily contact especially for children and dogs. Blue-green algae is appearing more frequently in water bodies such as the Delta and Lake Del Valle, which can supply water to Zone 7. After a study of Zone 7’s source water, ozone was identified as the only effective treatment of such cyanotoxins and it became clear that accelerating the ozone projects was needed. Accomplishing this will require borrowing money and borrowing money requires a demonstration of financial health.

5. Zone 7 is not alone in its financial challenges. According to the Association of California Water Agencies, water suppliers throughout the state are having to raise rates in response to:

  • Extra costs and reduced revenues as a result of the drought, including lost revenues from increased conservation despite largely fixed costs of operations.
  • Rising water treatment costs.
  • Aging water infrastructure.
  • Cost of increasing reliability by developing new water supplies.
The water rates paid by the Valley’s residents and businesses is comparable to others in the Bay Area. Despite all the financial challenges and adopted rate increases, water from the tap costs less than a penny a gallon – and it is delivered to your home under pressure, available at all hours of the day or night for all household, gardening and utility purposes. 
Find out more about Zone 7’s water rates by attending an informational workshop at Zone 7 on January 30th.
Mission Statement:
Zone 7 Water Agency is committed to providing a reliable supply of high quality water
and an effective flood control system to the Livermore-Amador Valley. In fulfilling our present and future commitments to the community, we will develop and manage the water resources in a fiscally responsible, innovative, proactive, and environmentally sensitive way.

Vision Statement:
To be recognized as the platinum standard water and flood control district in which to live, work and do business by enhancing the quality of life, economic vitality and environmental health of the communities we serve.

OPEN AND TRANSPARENT -- The Board's meetings and communications shall be open and public, except when the Brown Act authorizes otherwise.
CUSTOMER SERVICE -- Our commitment to the community requires prompt, respectful and courteous relations with our customers, both internal and external, as well as pursuing community partnerships and collaboration with     other area public agencies when beneficial to the public.
INTEGRITY -- We practice the highest ethical standards and maintain open, honest communications at all levels of the organization at all times.
FISCALLY RESPONSIBLE -- We will operate in a productive, cost effective, transparent and efficient manner to ensure sound financial stability.
ENVIRONMENTALLY SENSITIVE -- In carrying out our mission, we are dedicated to preserving and enhancing the environment while complying with regulations.
INNOVATIVE/PROACTIVE -- We encourage innovation, creativity and ingenuity, seeking constant improvement and keeping up with the latest economical technologies and management practices.
SAFETY -- We are committed to public and employee safety to maintain a healthy work environment.  We work safely and provide safe products and services.
EMPLOYEE DEVELOPMENT -- We foster a respect for diversity, equality, a spirit of performance-based accountability and productivity along with personal and professional growth for all team members so as to achieve excellence through the collective energy that comes from a work environment where each employee can flourish and succeed to their highest potential.
Copyright © 2013 Zone 7 Water Agency, All rights reserved.

Contact Information:
Zone 7 Water Agency, 100 North Canyons Parkway, Livermore, CA 94551
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Zone 7 Water Agency · 100 North Canyons Parkway · Livermore, CA 94551 · USA

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