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Santa Rosa Water seeks to restore capital program; council hears rate-driven cost increases
Summary
Santa Rosa Water presented a proposed FY25–26 budget that restores CIP spending cut last year, adds water-purchase increases tied to Sonoma Water's wholesale rate, and requests council acceptance of a multi-year regional wastewater funding plan.
Santa Rosa Water presented its fiscal 2025–26 operating and capital budgets to the council, and leaders described a return to more typical capital spending after intentional reductions the prior year.
Director Jennifer Burke said the utility reduced capital appropriations in the prior year to balance a budget that had absorbed steep increases in Sonoma Water’s wholesale rate and in electricity costs. For 2025–26 the water enterprise is proposing a return to planned capital appropriations roughly in the $15.4 million range and the local wastewater fund plans roughly $14.2 million in CIP appropriations; regional wastewater partners agreed to increase the regional cash-funded CIP by $1 million per year, Burke said.
Deputy Director of Administration Nick Harvey summarized the operating impacts: the water purchase budget includes a roughly 8.7% wholesale increase from Sonoma Water (about $1.9 million for the city), and salary, benefits and other operating costs reflect the recently adopted labor settlements. In addition to the larger capital program, the regional wastewater budget shows an increased O&M project budget for critical plant consumables and a planned rehabilitation of a belt press at the Laguna wastewater treatment plant.
Burke and Harvey said the water and wastewater funds remain compliant with reserve targets but noted the city’s broader need to stabilize long-term finances. The Board of Public Utilities reviewed and recommended the rate proposals and the regional partners endorsed the regional CIP increase.
On operations and accomplishments, Santa Rosa Water noted its production and reuse metrics (about 400 million gallons potable water produced at Farmers Lane and reuse of about 88% of recycled water production this year), compliance testing and lab work, stormwater and creek cleanup activity, and continued investments in UV disinfection work at the Laguna Plant. Director Burke said the utility has completed a citywide fleet electrification plan and completed a storm-drain master-plan draft.
Council members and staff discussed the ongoing need for regional project financing and whether federal or state grant timing could affect near-term budgets. No action was taken; Santa Rosa Water’s budget and rate recommendations will be returned to council in the normal budget-adoption process.
