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Santa Cruz council adopts multi‑year wastewater rate increases and updates sewer connection fees
Summary
The City Council approved a five‑year wastewater rate plan averaging 8% increases for three years and new sewer connection (capacity) fee adjustments to achieve cost recovery and support $50M+ in capital work at the wastewater treatment plant.
The Santa Cruz City Council on Tuesday adopted revised wastewater user charges and updated sewer connection fees after receiving a public presentation from the Public Works Department and consultants.
Council members voted to adopt a five‑year rate plan that staff and Bartle Wells & Associates recommended to fund system operations, meet reserve targets and pay for a multi‑million dollar capital program at the city's regional wastewater treatment plant. The plan calls for average increases of about 8% in each of the first three years and roughly 7% in the final two years of the five‑year schedule.
City Assistant Public Works Director Kevin Crosley told the council the utility faces more than $50 million in capital needs over the next five years — including a $20 million project underway at the plant and major electrical upgrades — and historically lower average annual spending. Crosley said the department will combine pay‑as‑you‑go funding with debt financing to carry out the program and noted the utility treats wastewater for the city and roughly 50,000 county residents.
Crosley also described outreach steps: a mailer to more than 31,000 property owners and renters, Spanish translation of the mailer, public open house and review by the Public Works Commission. He noted an existing customer assistance program that provides a $25 monthly credit for qualifying customers and that staff plans to expand assistance to multifamily customers in 2026.
Council member O'Hara moved adoption of the revised user charges and rescission of Resolution NS29520; the motion was seconded by Council member Brunner and passed on roll call. The city clerk reported 13 protests were received on the proposed rates, one invalid, leaving 12 valid protests — well below the threshold needed to block the rate adoption.
On a separate but related item the council also adopted updated sewer connection (capacity) fees intended to recover the cost of adding capacity to the system for new or upsized service connections. Crosley said the adjustment aligns with a goal of 100% cost recovery for connection charges and reflects development activity in the community.
Council members thanked public works staff for the outreach and emphasized the need to protect public health and environmental compliance. Several members also urged continued strengthening of the low‑income assistance program.
What happens next: the rate schedule and new connection fees will take effect as set out in the staff report and are intended to fund current operations, workforce needs and the multi‑year capital program. Staff said they expect to return with additional design and delivery‑method recommendations for major projects, including the electrical upgrades, later this year.
