Falling Demand Drives East Bay MUD Innovation Push; $380M Bond Plan Approved

East Bay MUD staff told the Board of Directors the utility is selling less water while paying more to deliver it, and pitched research, partnerships and data science as part of the answer. In its only substantive vote, the board approved a Fiscal Year 2027 financing plan by voice vote. The plan sets up about $380 million in new green bonds. Directors also heard the district's first economic impact report and a mixed read on workplace culture.

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• Innovation push: Staff cite about 170 research projects in five years as costs rise and demand falls.
• FY2027 financing plan approved: About $345M water and $35M wastewater green bonds, plus possible refundings.
• First economic impact report: $4.8 billion in three-year output, with 54% of procurement dollars staying local.
• Employee survey gains are small: Inclusion at 66% trails peer organizations by 11 points.
• Alamo developer disputes charges: He seeks a refund review and an applicant-install policy by Q1 2027.

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Doing More With Less Water

Why it matters: The district's revenue base is shrinking while its costs climb. Staff framed innovation as a way to manage that squeeze. Directors want proof the work pays off.

"Demand is going down, even not during drought years this year and last year, and costs are going up," said Sam Feldman, Budget Manager. He listed aging infrastructure, climate change, regulation and emerging contaminants as added pressures.

Where things stand: Principal Management Analyst Brent Rowe walked through about 170 research and innovation projects completed over five years. Some in-house research helped the district avoid costlier options. The portfolio includes:

• Wildfire research: A Water Research Foundation effort with the Los Angeles Department of Water and Power, San Jose Water and Contra Costa.
• UC Berkeley partnership: The Center for Smart Infrastructure is working on erosion at the Pardee spillway, aqueduct linings and pipe testing.
• Sewer leak detection: New technologies to find inflow and infiltration. That term means groundwater and stormwater seeping into sewer pipes, which raises treatment volumes.

The sewer work carries a legal mandate. "Since 2015, we've been part of a consent decree to continually look for sources of inflow and infiltration," said Rowe. A consent decree is a court-enforced settlement that requires specific actions.

The data turn: Two data scientists hired about eight months ago have already produced main-break heat maps and a simulation for routing repair crews. Staff's future priorities include three changes:

• Stage-gating: Moving projects forward only after they pass set decision checkpoints.
• Partnerships: Expanding work with outside research partners.
• A broader definition of innovation: Treating it as a culture across the district, not a single program.

The other side: Directors pressed for concrete deliverables and return on investment. One director asked for a copy of the wildfire playbook. Another sought assurance that new aqueduct linings would not affect water quality. Directors also asked that staff contributors be recognized.

Director Andy Katz (Ward 4) warned against chasing only large breakthroughs. "I also want to make sure that we don't lose track of small and medium-sized problems," said Katz.

Decisions and stakeholder impacts: No vote was taken. Ratepayers have the most at stake, since the case for innovation rests on holding down costs as water sales fall. UC Berkeley and peer utilities gain a deeper research partner.

What's next: Staff will refine priorities. Directors signaled they expect timelines and measurable returns in future updates.

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Board Clears $380M Green Bond Plan

Why it matters: Borrowing pays for East Bay MUD's capital projects, and interest costs flow directly into rates. "So our water system right now has about $3 billion in debt outstanding," said Robbie Hennay, Acting Finance Director.

The basics: About 92% of that water debt is fixed-rate revenue bonds, 7% is commercial paper (short-term borrowing) and 1% is state loans. Wastewater debt totals $356 million. The water system holds AAA, AAA and AA+ ratings from the three major rating agencies. A "refunding" replaces older bonds with new ones at lower interest rates.

Where things stand: Last year the district issued about $330 million in premium water green bonds and $37 million in wastewater green bonds. It also refunded $400 million in water Build America Bonds and $150 million in wastewater Build America Bonds, and retired $20 million of commercial paper. Staff explained premium bonds after questions at committee.

The FY2027 plan includes four pieces:

• Water bonds: About $345 million in new-money green bonds.
• Possible water refunding: Up to $460 million in 2017 bonds, if interest rates allow.
• Commercial paper: Paying down at least $10 million.
• Wastewater bonds: About $35 million in new-money bonds, with about $27 million potentially refunded.

All issuances are planned for the fiscal year's fourth quarter. "We plan to issue about $345 million in new money bonds, and that's the number in the budget," said Hennay.

Decisions and stakeholder impacts: "This plan was supported unanimously by the Finance Administration Committee this morning," said General Manager Chan. Director Ody moved approval and Katz seconded. The plan passed on a voice vote with no discussion and no tally announced. Ratepayers benefit if the refundings lower interest costs. Bond investors gain new green-labeled supply.

What's next: Sales are slated for the fourth quarter of FY2027. The $460 million refunding depends on market rates at that time.

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District Measures Its Economic Footprint

Why it matters: The district's first economic impact report puts a dollar figure on what ratepayer spending does for the regional economy. It also shows where contracting equity falls short.

Where things stand: Laser Management ran the analysis for FY2023 through FY2025 using IMPLAN, a standard economic modeling tool. The key findings:

• Spending and output: $1.1 billion in direct spending in FY2025 and $4.8 billion in output over three years.
• Tax revenue: An average of $251 million a year.
• Jobs: 3,600 jobs from infrastructure work plus 2,600 from operations.

"For every dollar that's spent in economic activity for the district yields $1.50 of output," said Darryl Moten, Manager of the Office of Diversity, Equity, and Culture.

Procurement totaled about $793 million across roughly 1,500 contractors. "54% of every dollar we spent stayed local," said Beverly Johnson, Contract Equity Administrator. Here, local means Alameda and Contra Costa counties.

The other side: Small businesses received about $244 million, and minority- and women-owned firms received $106 million. By share of total spending, Hispanic-owned firms received 4.8%, Asian-owned 4.5%, Black-owned 1.6% and Native American-owned 0.2%. "It shows we still have work to do in terms of promoting more diversity in terms of our contract awards," said Johnson. Local hiring reached 56% over two years and 55% in FY2026, both above a 50% goal.

Decisions and stakeholder impacts: No vote was taken. Directors asked why San Francisco is excluded from the local definition. They also asked how the report will be publicized, and staff cited a press release, mayors' conferences and briefing lists. One director suggested a future study of the economic costs of drought. Local small businesses and minority-owned contractors now have baseline numbers to press for a larger share of contracts.

What's next: Staff promised data on where district workers live.

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Survey Up Slightly, but Inclusion Lags

Where things stand: The EX25 employee survey, run by Qualtrics, asked 62 questions and drew a 66% response rate. Results improved 1 to 3 points from 2024 on every indicator:

• Engagement: 82%
• Experience matching expectations: 87%
• Intent to stay: 85%
• Well-being: 72%
• Inclusion: 66%

Inclusion ran 11 points below peer organizations with 1,000 to 5,000 employees. Engagement and intent to stay were above peers. Only 58% of staff said they feel energized at work. Employees praised benefits and training in written comments. They flagged inconsistent experiences across the district, leadership communication, internal systems and change management.

The other side: Director Marguerite Young (Ward 3) questioned whether the gains are statistically meaningful. "1% and 2% feels like noise to me," said Young. Directors also asked about tracking disability data and about response rates among bargaining-unit members.

What's next: Action planning will happen at the district, department and team levels. Staff promised the requested data.

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Alamo Developer Challenges Connection Charges

Mike Khan, a residential developer, told the board he paid more than $120,000 for a meter upgrade and new lateral line in Alamo. "I paid over $120,000 to East Bay MUD to upgrade an existing water meter," said Khan. That total included more than $80,000 in sewer capacity charges. He said the same charges would now cost $20,000.

Khan also described an actual-cost contract with a $40,000 estimate and a later $25,000 demand. He said his bill was reduced by more than $12,000 after he challenged it. He questioned how the district allocates overhead. He pointed to PG&E, a sanitary district and Comcast, which let applicants install their own connections.

He made three requests:

• Evaluate the disparity: Review the gap between what he paid and the lower current charge.
• Independent review: Order an outside review of his costs.
• Applicant-install policy: Refer the idea to committee for study and implementation by the end of the first quarter of 2027.

Board President Luz Gómez said staff were already in discussions with Khan. When asked how the board would be updated, staff said an update could be provided. Gómez raised the idea of a transition policy for applicants in similar situations. She said the matter may go to a future committee. No action was taken.

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Minor Items

• Consent calendar: Items 1 through 5 passed by voice vote, moved by Katz and seconded by Director Joey Smith (Ward 1).
• Public comment: Alexandria Bell alleged she was wrongfully released from an HR job after 23 days. "I do want to let you know that that's not the culture that I believe I joined," she said. She said she does not plan legal action. The claims are unverified, and the board took no action.
• Emissions: "We are fully on track to meet our net emissions goal," said Young, reporting for the Sustainability Committee.
• Recognition: The district's H2Flo en Español video, made with Alphabet Rockers and Gina Madrid, won a statewide Star Award from the California Association of Public Information Officials. The video has 3.4 million views. Employee Beverly Johnson was honored for 40 years of service.
• STEAM Discovery Day: About 500 fourth and fifth graders from five Title I schools attended at Siesta Valley, at about $60 per student. A director suggested making the event a regular program.

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Looking ahead: The board's next regular meeting is Nov. 10 at 1:15.