Council authorizes Prop 218 process for proposed water‑service increases; staff warns delays will deplete reserves

The Simi Valley City Council authorized staff to begin the Proposition 218 process and set a public hearing for Nov. 17, 2025, to consider proposed water‑service rate adjustments that would tentatively average 3.5% annually for five years, plus annual pass‑throughs tied to wholesale water costs.

Public Works Director Ron Fuchiwaki and Principal Engineer Mark Mitchell Kadda presented projections for the waterworks fund. Staff reported roughly $35.1 million in capital projects beginning in the current fiscal year, then roughly $10 million in annual capital spending in subsequent years. The presentation showed that imported water costs, staff said, make up about 61% of the water fund’s annual costs, operations and maintenance are about 24%, and only 15% is available for capital projects under current revenue.

Staff said a five‑year plan that starts with the proposed rate increases keeps the fund’s emergency reserves and cash on hand at targeted levels, while one‑ or two‑year delays would create structural shortfalls that would drain unencumbered cash and likely require larger rate hikes later (staff presented scenarios showing a one‑year delay would require an eventual 5.5% increase to restore reserves; a two‑year delay would require still larger increases). The staff presentation also noted the Prop 218 mailing is a required step for property‑related fees and provides a maximum notice of proposed increases; the council must finalize rates at the public hearing following the Prop 218 process.

Councilmember Joseph Ayala voted against the motion approving the Prop 218 initiation. No other councilmember requested altering the timeline; the motion passed by majority vote. Staff will mail the Prop 218 notices with the maximum proposed rate schedule and pursue public outreach ahead of the Nov. 17 hearing.