Fillmore reviews sewer enterprise debt, FEMA reimbursement and rate timing

Mayor Christina Villasenor and Fillmore City Council heard a detailed briefing on the city’s sewer enterprise fund and outstanding bonds during their April 8 meeting.

City staff explained that the sewer system is supported by two revenue bond series issued to finance a larger wastewater treatment plant after stricter Los Angeles Regional Water Quality Control Board discharge limits triggered the project. The city currently shows two bond payoffs: the earlier series is scheduled to end May 1, 2030, and the later refunding series will be paid off in 2047. Staff reported roughly $41,990,000 in remaining principal across the enterprise bonds (unaudited), and described how the 2017 refunding split the original debt into two pieces to lower near‑term interest costs.

The presentation also covered rate-setting and recent billing changes. Staff said the council adopted a five‑year flat residential sewer rate in 2023 that runs through 2027 (the packet showed a residential flat rate and a separate volumetric/nonresidential schedule), and that the utility is monitored for operations, maintenance and capital needs. Staff noted the city installed about 4,300 AMI water meters in the past two years; more accurate metering and a 2023 water rate implementation explained why some customers saw higher water (not sewer) bills.

Council members asked how the 2030 payoff would affect rates. Staff replied that once the first bond is retired and principal payments on the remaining series begin (May 2031), total annual debt service will rise and the city would need an updated analysis to determine whether rates should increase, remain flat, or be addressed through a refunding. Staff said they expect to begin the next rate study in 2027.

The briefing included the city’s FEMA reimbursement request after the recent sewer line collapse. Fillmore submitted roughly $10.9 million in claims split between Category B (emergency protective measures) and Category F (permanent repairs), with an additional ~$60,000 hazard mitigation proposal for epoxy coatings to reduce future corrosion. Staff described FEMA’s process: if approved, FEMA pays 75% of eligible costs, Cal OES administers state cost share on the remaining 25%, and the city pays the remainder. Staff said the FEMA review is pending and that administrative costs (Category Z) will be handled if the project is obligated by FEMA.

Council members asked for more specific year‑by‑year payoff numbers and for clearer projections of rate impacts after the 2030 payoff. Staff agreed to provide the detailed amortization schedule, a ballpark estimate of the likely rate effect in 2030–2031, and the updated 2024 audited financials when available. The council also asked staff to provide the full presentation slides and supporting graphs for public distribution; staff confirmed the finance website already hosts a more detailed timeline and will supply the presentation to council.

Council members discussed whether future development (Bridal area, Creekside) would spread costs. Staff said developers build required sewer connections but that aging mains and required repairs could still impose costs to accommodate new flows; large future projects would be evaluated as they move toward entitlements.

The council did not take an immediate formal action on rates or bond restructuring at the meeting; staff left with direction to return with more granular payoff schedules, updated audited balances, and analysis of possible rate outcomes when the 2030 payment is complete.

Ending: Staff said the next sewer rate evaluation will be in 2027 and committed to returning with the requested payoff tables and a clear explanation of possible customer impacts once more financial details are available.