Council authorizes Prop 218 notices for proposed sewer-rate increases to fund $115M capital plan

The Salinas City Council on April 22, 2025, voted to proceed with Proposition 218 public-notice steps for a proposed sewer-rate schedule designed to address aging infrastructure and a multi-year capital-improvement program.

Consultants told the council the sewer master plan update identified roughly $115 million in needed sewer system work over the next decade, including repairs to gravity mains, force mains and lift stations. Staff and the consultant said the city's current basic charge of about $5.45 per equivalent dwelling unit (EDU) would leave an approximate near-term shortfall; the proposed rate schedule raises the monthly single-family equivalent to $16.35 in FY 2025-26 and applies a 2% annual escalation over a 10-year projection to support the capital program and reserves.

The council voted to accept the rate study, adopt the proposed schedule for notice, and direct staff to distribute Proposition 218 notices to affected property owners and ratepayers so the city can hold required public hearings (the process requires mailed notices and a public hearing if the city receives protests under Prop 218). The motion passed on the same 5-2 split as the earlier housing vote: Councilmembers Barajas, D'Arrigo, De La Rosa, Salazar and Mayor Donahue voted yes; Councilmembers Barrera and Sandoval voted no.

Staff said the proposed increase is structured to combine pay-as-you-go spending with planned bond financing to fund capital projects. Consultants explained that the rate model divides the system's revenue needs by the number of equivalent dwelling units (about 60,000 EDUs in the model) to produce a per-EDU charge; nonresidential accounts would be billed at EDU-equivalent rates.

City staff noted additional complications specific to Salinas: unlike some cities that control both water and sewer billing, Salinas sewer customers are served by multiple water purveyors, which complicates approaches that rely on actual water consumption to estimate wastewater. The staff report included a proposed customer-assistance approach modeled after a neighboring agency's program; city staff said they would return with details and potential funding for an assistance program if the Prop 218 process proceeds.

What happens next: staff will mail Proposition 218 notices as required by state law, schedule required hearings and report back with protest results and recommended next steps. If a majority of ratepayers submit written protests at the public hearing (per Prop 218 rules), the rate increase cannot proceed. If the protest threshold is not met, the council may adopt the new rates and the city will proceed with financing and capital work planning.