The Santa Clara Valley Water District is proposing a rate hike again this year, significantly increasing water costs for municipal and industrial users, including farmers.

In its 2008 report, the district proposes a 6.4 increase in agricultural farm rates, from $15.75 per acre foot to $16.50. The district proposes a 7.8 percent increase for residents, or about 69-cents per month for a family of five.

Some South County farmers say the rise in rates is just another of a barrage of skyrocketing production costs that has squeezed them lately - but that this is one increase they won't take lying down.

Agricultural Water Committee past chair and longtime board member Joe F. Gonzales said the proposed increase shows the district is better at directing cash flow than water flow.

"The water district is top heavy, too much management," he said.

The district has an annual budget of $312 million, and about 750 employees.

Gonzales said he's been fighting with the district for years about rate increases.

"I fight them all the time," he said. "I disagree with them raising the prices."

"It hurts," was Santa Clara County Farm Bureau board member Kip Brundage's initial reaction to the rising price.

The South County farmer is already faced with rising costs of diesel fuel, electricity and fertilizer.

Brundage said he planned to attend the April 10 meeting. He referred to recent district programs aimed at agricultural water conservation, which was coupled with reduced rates for participants.

He said the district has been good about showing farmers how to save water, but now it's time for the district to start saving money.

Rosemary Kamei, District 1 water district board member, said she welcomes ideas people have to keep prices low.

"It's sometimes very simple to say yes, keep it down, but not to have any solutions on how," she said.

Kamei said that for the first time in a long time, the board is looking at cutting costs in one place the community won't mind - they're looking at eliminating top-level positions.

"We have new leadership at the water district," she said, referring to interim Chief Executive Officer Olga Steele. "And right now, the district is going through an analysis of priorities. We're looking at consolidations, and whether we can integrate positions into different departments."

Kamei said that she, Steele and other board members are looking at a number of vacant top level positions to streamline and consolidate.

"It's an analysis that we have not done before," she said.

Susan Siravo, district public information officer, said the district has indeed undergone an official study to determine which positions were critical for top management. There are about 30 top management positions, of which several were vacant, Siravo said.

Kamei was careful to note that not everything can be downsized.

"It isn't just a matter of removing positions," she said. "We need to say, if we're not going to do that anymore, then what are the effects of not doing that anymore?"

Kamei said that putting off projects now in order to keep water rates the same isn't a good long-term plan.

"Water rates would be less now, but would they be more later?"

Bob Cerutti, San Martin resident and frequent water district critic, was skeptical that South County residents were getting much out of the projects they're paying for now.

"They're not doing anything near what they say they're doing down here," Cerutti said. "What we're doing is, we're giving them a cost of living increase."

The new rate will take effect in July if approved following public comment next week. The new rates wouldn't immediately impact residents or farmers, but would affect water retailers like Gilroy and Morgan Hill, which usually later pass the increases on to consumers.

The proposal means Gilroy would be charged $275 per acre foot for water come July 1, compared with the $255 per acre foot it pays now. An acre-foot of water equals an area roughly the size of a football field filled to a depth of one foot. It is enough water to supply two families of five for about a year.

Gilroy Co-Finance Director Christina Turner said water district rate increases don't always translate into rate increases to consumers. But for the past six years, it has translated that way - although not at a rate as high as the water district passes down. The city has been able to absorb some of the rising charges by saving money other ways, like saving electricity by pumping water at off-peak hours, she said, noting that in 2007, the water district increased rates by 7 percent, but the city only increased its rates by 4.5 percent.

Cerutti said he'd like to see more checks and balances in the water district. Instead of coming up with figures on what operating costs will be in the future, he said officials should look back at what they've spent the previous year and see where they could save. One place to start, he said, was salaries.

"The water district has never taken a reduction in salary and benefits, never requested to take a reduction to make numbers coordinate with actual expenses," Cerutti said. "They need to take a hard look at a 10 or 15 percent reduction there."

Cerutti pointed out that water district employees have three unions that fight for their high salaries, and get them. Meanwhile, South County residents have to be their own advocates, showing up at meetings and writing letters of protest in efforts - so far unsuccessful - to keep water prices low.

"It's their protocol to take questions, to have residents come to public hearings and read a letter opposing increases," he said. "Then they go and raise the rates anyway."

Municipal water rates (per acre foot)

■ 2001 $130

■ 2002 $140

■ 2003 $160

■ 2004 $200

■ 2005 $215

■ 2006 $230

■ 2007 $255

■ 2008 $275 (recommended)

■ 2009 $300*

■ 2010 $325*

■ 2011 $355*

■ 2012 $385*

■ 2013 $420*

* Projected

Source: Santa Clara Valley Water District