Greenfield council approves sewer rate study, selects worst‑case funding option and begins Proposition 218 process

The Greenfield City Council on Oct. 14 adopted a sewer utility rate study, selected the study’s Option 2 (no state grant funding) and directed staff to proceed with the Proposition 218 process required to raise sewer utility rates.

City project manager Tony Nissich and consultant Anthony Ylowski presented the study, telling the council the city’s wastewater treatment plant is at “critical” condition and that recent changes in state funding eligibility mean Greenfield can no longer rely on full grant coverage. The study estimates a full, single‑phase replacement of the plant at about $111,000,000 and lays out revenue options to repay debt and build reserves.

Under the option the council approved, staff recommended rate increases designed to generate sufficient revenue even if no state grant money is awarded. The consultant said the plan would require a substantial first‑year increase (the study projects an immediate increase in the first implemented year to align cash flows) and annual adjustments over a five‑year planning horizon; the presentation said the study models an initial increase on top of previously adopted adjustments and described a 65 percent increase figure for the current fiscal year scenario used in the financial projections. The study also proposes a new capacity (buy‑in) fee of $7,286 per equivalent residential unit (ERU) for new development, up about $3,712 from the current residential buy‑in.

The council discussion focused on three lines of concern voiced repeatedly by members and attendees: (1) the ability of low‑income and fixed‑income residents to absorb higher monthly bills; (2) timeline and certainty for state grant decisions; and (3) the practical mechanics of reducing rates if grant funds are later awarded. Council members asked whether the city could subsidize senior bills; staff and the city attorney advised that Proposition 218 limits using sewer rate revenue to subsidize one customer class with another, so any targeted subsidy would have to come from another fund (for example, a general‑fund allocation) if the council chose to provide it.

Consultant Ylowski and staff said the city needs the study and the Prop. 218 maximums in place to be eligible for state funding. They described the State Revolving Fund (SRF) loan program as the most favorable debt source but said SRF availability and grant amounts are uncertain. Staff said they expect to continue applying for other grants and to re‑evaluate rate levels if the city receives grant awards: if a funding agreement arrives, the council would review that agreement and could reduce projected increases for years 2–5 without a new Proposition 218 notice.

The rate design explained by staff would introduce a variable charge tied to metered water use (capped for single‑family residential accounts at 5,000 gallons per month to avoid charging for irrigation) and a fixed monthly charge. The capacity fee methodology uses a “hybrid” buy‑in (current system value divided among existing customers) plus an incremental fee for growth‑related capital, producing the recommended $7,286 ERU fee.

After questions and public comment, a councilmember moved to approve Option 2 and proceed with the Proposition 218 process; the motion carried. The council vote followed customary aye/nea voice voting and was recorded as passing at the meeting.

What the council approved at the meeting is a direction to adopt the rate study and set the maximum rates under Proposition 218; specific billing changes, notices and effective dates will be set through the Prop. 218 noticing and subsequent hearings required by state law. Staff said the city expects to continue outreach, to pursue available grants, and to return to council with any funding agreements and recommended rate adjustments should grant awards materialize.

The vote clears a major procedural step for Greenfield’s attempts to secure state funding and to move a long‑planned wastewater treatment plant replacement toward construction.