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Environmental Utilities projects negative net cash flow in FY26; cites $37.6M in grant funding and a proposed 3–4% rate increase
Summary
Environmental Utilities staff told council the FY26 budget shows a negative net cash flow tied to larger capital projects, while reporting about $37.6 million in grant funding (including expected IRA funds) and a proposed rate increase of roughly 3–4% for average residential customers.
Environmental Utilities Director Sean Bigley and staff presented the proposed fiscal year 2026 budget to the City Council on April 16, describing a year with negative net cash flow attributed to unusually large capital spending and a rate‑setting process that would propose modest increases over two years.
Bigley said the department is focused on maintaining infrastructure, long‑term water supply reliability and wastewater capacity. He told the council the city has secured or is in process of securing about $37,600,000 in grant funding, with roughly $29,000,000 expected from the Inflation Reduction Act and the remainder from state sources such as the California Natural Resources Agency and CalRecycle.
Shane Whittington, EU business services manager, characterized FY26’s negative net cash flow as a timing issue related to larger than typical capital projects and compared it to a homeowner replacing a roof—spikes in one year offset over longer planning horizons. Whittington said about 80% of the utility’s revenues are rate funded and capital spending drives year‑to‑year volatility.
Bigley and Whittington said the department is undertaking a regular two‑year rate setting process; staff presented a preliminary proposal of about a 3–4% increase for the average residential customer in FY26 and a similar increase in FY27. Whittington showed a regional comparison indicating Roseville would remain competitive with neighboring utilities under the proposed adjustments.
Other details: Bigley said Roseville has secured 76,000 acre‑feet of annual water supply through contracts with the Bureau of Reclamation and Placer County Water Agency, provides about 1.2 billion gallons of recycled water annually (primarily to the western portion of the city), treats roughly 10.1 billion gallons annually at its Barton Road water treatment plant and maintains about 715 miles of water main. The wastewater system treats about 7.3 billion gallons annually across two regional plants and maintains about 900 miles of sewer infrastructure.
Public process: this item was presented as information only; staff said a formal rate proposal will be presented to the council in May and that ongoing outreach is part of the rate case timeline.
