Contra Costa tackles chemical cost spikes, golden mussels, and $32m canal pipeline in FY27-FY28 budget

Contra Costa tackles chemical cost spikes, golden mussels, and $32m canal pipeline in FY27-FY28 budgetThe California utility is navigating a 47% jump in chemical expenses and new environmental mandates as it ramps up capital spending for its multi-decade Canal Replacement Program.

Treated water rates will rise 6% annually across FY27 and FY28 to support an operating budget and a $70 million annual capital program.

Chemical costs are surging, driven by a 47% increase in aluminum sulfate prices and the expansion of EarthTec to combat invasive golden mussels.

The district is allocating $32 million to advance Phase 1 design of the Canal Replacement Program, adding five dedicated staff positions.

A massive single-year capital spike in the Water Resources department is entirely driven by new state habitat mitigation mandates.

The Contra Costa Water District (CCWD) is bracing for significant operational cost increases driven by soaring chemical prices, invasive species mitigation, and unfunded state mandates, according to the proposed FY27-FY28 budget presented on June 3. To support the budget, which features an annual capital program of approximately $70 million, CCWD is projecting rate increases of 6% for treated water and 4% for untreated water in both fiscal years. A major driver of the district's rising operating expenses is a 47% projected increase in treatment chemical costs. Director of Operations and Maintenance Matt Hobbs reported steep market escalations, including a 47% rise in aluminum sulfate prices, which will add $650,000 annually, and a 22% increase for sulfuric acid. Operational shifts are also compounding chemical expenses. The district recently converted its Randall-Bold Water Treatment Plant to sodium hypochlorite and liquid ammonium sulfate to improve safety and reduce regulatory risks, a move that adds roughly $500,000 a year in operating costs. Concurrently, the board authorized an immediate $850,000 budget transfer for FY26 to cover increased chemical usage, partly due to expanding the use of EarthTec at the Brentwood facility. EarthTec is being deployed for taste and odor control, but has also proven effective against invasive golden mussels. The golden mussel threat is rippling through CCWD's planning. The district is funding a dedicated Golden Mussel Study in its capital program and developing new operational strategies to balance source water quality and pump scheduling to mitigate the invasive species. On the capital side, the district's flagship initiative is the Canal Replacement Program, which will receive $32 million over the two-year budget cycle. The multi-decade project to enclose the unlined canal will advance significantly, with Director of Engineering Peter Stab noting the district will add five dedicated project positions to support Phase 1 pipeline design. The district aims to complete geotechnical investigations in FY27 and reach 30% preliminary design for the pipeline by the end of FY28. Meanwhile, regulatory compliance is forcing sudden capital expenditures. Water Resources Manager Lucinda Shi highlighted a massive single-year spike in her department's FY27 capital budget, which is required to purchase habitat mitigation land credits. The purchase is a mandatory condition of the district's 2024 Incidental Take Permit issued by the California Department of Fish and Wildlife. "This is a cost that was outside of our district control," noted the board president. "It is simply what is required for us to comply with state regulations in order for us to provide water to our customers." Despite these pressures, the district's long-term water supply outlook remains stable but cautious. A public hearing on the 2025 Urban Water Management Plan revealed that while overall demand projections have dropped 16% due to conservation and reduced industrial use, CCWD could face supply deficits by 2030 in the fifth year of a multi-year drought. To address future shortfalls, the district plans to rely on water transfers in the near term while evaluating alternative supplies, including expanded recycled water and potential partnerships for desalination.