Santa Rosa Water proposes $21.6M budget boosting water purchase amid rising costs

In the heart of Santa Rosa's city hall, the Board of Public Utilities convened on April 17, 2025, to discuss the city's operational and maintenance budgets for the upcoming fiscal year. The atmosphere was charged with anticipation as board members prepared to navigate the complexities of financial planning that would impact the community's water, wastewater, and stormwater services.

The meeting revealed a significant increase in the water purchase budget, projected to reach approximately $21.6 million, marking a $1.9 million rise from the previous year. This increase is largely attributed to an 8.68% hike in wholesale water rates and a modest growth in water usage, expected to rise by 1%. Additionally, the board approved rate increases of 6% for water and 5% for wastewater services, set to take effect on July 1, 2025.

Salary adjustments were also a focal point, with a proposed 9% increase across the board to accommodate new labor agreements and equity adjustments. This decision reflects the city's commitment to maintaining a competitive workforce amid rising operational costs, which also include anticipated increases in electricity expenses due to higher consumption from new facilities.

The budget discussions highlighted a projected operating deficit of $5.1 million for the water fund, a figure that raised eyebrows among board members. However, officials reassured attendees that this deficit aligns with the financial modeling conducted during the recent rate-setting process. In contrast, the local sewer fund is expected to face a larger deficit of approximately $6.9 million, a situation that has prompted careful scrutiny and planning.

As the meeting progressed, board members expressed their concerns about rising insurance costs, which have surged by 75%. The lack of clarity regarding the factors driving these increases left some members seeking further information from the finance department.

Despite the challenges, the board celebrated a return to normalcy in capital improvement project (CIP) funding, with planned appropriations of $15.5 million for water, $14.3 million for sewer, and nearly $3.4 million for stormwater and creeks. This funding is crucial for maintaining and upgrading the city’s infrastructure, ensuring that essential services remain reliable for residents.

As the meeting drew to a close, the board prepared to recommend the proposed budget to the city council, with final discussions scheduled for June. The outcome of these deliberations will shape the future of Santa Rosa's utilities, reflecting the delicate balance between fiscal responsibility and the need for sustainable community services.