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Council adopts utility rate framework but opts to implement a lower initial increase for water and sewer rates
Summary
After a multi‑year study, city staff and consultant Willdan presented two rate scenarios to fund capital needs and chromium‑6 compliance; the council adopted the formal maximum rates in the study (scenario 1) but voted to implement the lower, deferred option (scenario 2) to reduce the initial rate shock.
Vacaville City Council continued a public hearing on water and sewer rate adjustments June 24 and, after extended presentations and public comment, adopted the rates authorized in the Prop 218 notice but directed staff to implement the smaller initial increases described in the alternative scenario.
Background and two scenarios
Utilities staff and consultant Willdan presented a revised rate study and two scenarios to restore utility reserves, fund capital replacement and address compliance with the state’s hexavalent chromium (Cr(VI)) maximum contaminant level. Director of Utilities Justin Cole and project manager Larissa Morris summarized the water fund needs, including a multi‑decade pipeline replacement backlog and the need to fund rehabilitation and new supply. Morris said the water fund faced an estimated fiscal gap and stressed the importance of capital transfers for system reliability.
Willdan’s Chris Fisher said Scenario 1 is the recommended approach: it “prioritizes the chromium‑6 treatment projects as well as the other capital system rehabilitation and replacement projects” and brings the utilities closer to target reserve levels. Scenario 2 reduces near‑term increases by deferring some projects, spreading the cost over later years and increasing risk to cash reserves and the ability to deliver projects on schedule.
Key numbers and compliance risks
Staff and the consultant showed that replacing all critical older mains could cost an order of magnitude (hundreds of millions) and that treating chromium‑6 at affected wells contributes significantly to near‑term revenue needs. Willdan’s analysis modeled bills for representative low, medium and high users. For an average bimonthly customer the model showed an existing bill of about $2.10 and an increase to roughly $2.75 under Scenario 1 in year 1; Scenario 2 would limit the year‑one increase to about $2.50 for the same customer.
Public comment and council questions focused on affordability and distribution of impacts; staff highlighted the city’s low‑income discount program and existing assistance funds. Several residents urged the council to limit near‑term increases for households on fixed incomes.
Council action
Council voted to adopt the study’s Scenario 1 rates as the maximum authorized by the Prop 218 notice but to implement the lower Scenario 2 increases — a compromise staff had presented as an option to retain legal flexibility while reducing the initial customer impact. The roll call was: Stockton, Ritchie and Silva in favor; Freeman and Mayor Carley opposed; Wiley and Vice Mayor Chapman in favor. Councilmembers who supported the compromise emphasized the uncertainty of litigation over state chromium‑6 rules and the desire to reduce the initial rate burden on vulnerable customers while preserving the city’s legal options to raise rates later if required.
Next steps
Staff said implementation details will follow and that the adopted structure preserves the city’s ability to scale increases later if court or regulatory outcomes change. Staff also reminded the public about the low‑income discount program (phone: (707) 449‑5128) and upcoming pilot and treatment work on wells.
