Council adopts sewer rate increases after hearing; staff says Cal Poly reclamation will affect future revenues

The City Council adopted sewer rate increases at the June 17 meeting, approving a 6.5% increase in fiscal year 2025–26 and another 6.5% in 2026–27 after a public hearing. The council’s vote was 5–0.

Utilities staff presented a rate study update and said the sewer fund’s cost drivers mirror the water fund: regulatory requirements (notably upgrades at the Water Resource Recovery Facility), rising capital needs, inflation and efforts to limit long‑term debt. Staff reported $7.4 million in sewer‑related grant funding secured over the last seven years and an outstanding application of about $5.4 million to federal programs that, if received, could be used for projects (for example, biogas projects) intended to reduce costs over time.

As with the water hearing, staff reported 430 submitted protests, with 30 invalid and 31 duplicates, leaving 369 valid protests—statutorily insufficient to block adoption. Staff also noted the city has balanced enterprise fund forecasts with full reserves and that the rate study informed the recommended increases.

Staff emphasized that Cal Poly’s new wastewater treatment and planned on‑campus reclamation facility (WARF) will shift some flows and revenue away from the city; staff estimated the WARF’s revenue impact on the sewer rate forecast at roughly 2 percentage points. They said the city will monitor the WARF schedule and could revisit rates if the university’s timeline changes.

Councilmember Boswell moved to approve staff’s sewer recommendation; Vice Mayor Shoresman seconded and the motion carried 5–0 in roll call (Councilmembers Francis, Boswell, Marks, Vice Mayor Shoresman and Mayor Erica A. Stewart voting yes).