Saint Helena council weighs pausing water and sewer increases, directs staff to expand low-income aid and return with options

City of Saint Helena officials on April 22 reviewed updated financial forecasts and rate alternatives for the city’s water and wastewater utilities, heard public comment about affordability and cost allocation, and directed staff to pursue targeted affordability and administrative changes rather than immediate rate relief.

Consultant Raftelis presented updated assumptions and four alternatives for each utility: keep the adopted multi‑year rate plan; pause the next year’s increase and keep later increases (a one‑year pause); pause for two years; or enact a one‑time reduction of 5–10% in year one. Raftelis staff said deeper pauses or one‑time reductions would create debt coverage shortfalls and risk the city’s ability to finance planned capital projects. The consulting presentation said a one‑year pause (Alternative 1) was the least risky compromise but still reduces coverage and draws on reserves more than the adopted plan.

City staff and the consultant emphasized that rate revenue supports a multi‑year capital improvement program (CIP) and debt coverage requirements. Staff said water O&M is budgeted near $6.8 million and wastewater O&M around $4.1–4.4 million for FY 2026, and that planned water borrowing for 2027 remains in the model. The presentation showed that more aggressive pauses or rate cuts would require annual O&M reductions on the order of $300,000–$1,000,000 or would make borrowing infeasible.

Public commenters urged relief for neighbors, highlighted long‑term maintenance needs for mains and other infrastructure, and pressed that enterprise funds not subsidize general government services. Several speakers requested a forensic review of prior enterprise expenditures and compliance with Proposition 218 principles on rate use.

Council members said they did not favor broad rate reductions at this time. Instead the council gave these directions to staff: return with a proposal to expand the city’s low‑income assistance (the CARES program), including options and proposed funding; continue work on an updated cost allocation plan (staff said an initial update shifts roughly $218,000 from the utilities to the general fund and will be refined over the summer); implement monthly billing if operationally feasible on July 1, 2025; present options for conducting a full rate study earlier than previously scheduled; and provide more detail on CIP timing and funding alternatives (including the $2.9 million of CIP moved to the city GoBond). Staff said it will report back to the Water & Wastewater Advisory Committee and the council with specific proposals and budget requests.

Mayor and councilors praised the clarity of the report but said the city’s limited fiscal flexibility and capital needs make immediate rate relief difficult without identifiable offsetting savings or outside funding. Staff also warned that reducing reserve minimums or delaying increases could affect future creditworthiness and borrowing costs.

Next steps: staff will develop an expanded low‑income assistance proposal (including potential general‑fund subsidy levels), refine the cost allocation work, return with a timeline for monthly billing implementation, and bring a recommendation on whether to initiate an earlier rate study.