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Board recommends FY 2025–26 water, wastewater and stormwater budgets to City Council
Summary
The Board of Public Utilities recommended the city’s proposed FY 2025–26 water, local wastewater and stormwater budgets to City Council, citing an 8.68% Sonoma Water wholesale rate increase and planned salary costs among the key assumptions.
The Board of Public Utilities unanimously recommended that City Council approve the City of Santa Rosa’s proposed fiscal year 2025–26 operations, maintenance and capital appropriation requests for the Water Fund, Local Wastewater Fund and Stormwater & Creeks Fund.
Deputy Director Nick Harvey told the board the proposed budgets reflect assumptions used during the rate‑setting process, including a Sonoma Water wholesale price increase of 8.68 percent and a budgeting assumption of 9 percent for salary increases to reflect upcoming MOU adjustments and class and compensation study outcomes. Staff budgeted water purchases at approximately $21,600,000 for the coming fiscal year — about $1.9 million higher than the current year — driven by the wholesale rate increase and modest demand growth.
Harvey summarized that the water fund is budgeted with an operating deficit of about $5,100,000 for 2025–26 in line with rate‑setting financial planning, and the local wastewater fund is budgeted with a deficit of about $6,900,000; both figures reflect planned capital investment and previously modeled financial strategies. Staff said the proposed budgets restore planned CIP appropriations after multiyear reductions: staff presented cash‑funded CIP plans that include investments in water mains and services, groundwater, pump stations and reservoirs for the water fund and investments in sewer mains, trunks and lift stations for the wastewater fund.
Key lines mentioned by staff include a proposed water purchase budget of roughly $21.6 million; major O&M increases attributable to utilities, billing services and citywide overhead allocations; and sewer operating increases largely driven by insurance and utility costs and pump warranty expirations at some facilities. Stormwater and Creeks operations were presented with a modest 1% O&M increase, with master planning and targeted storm drain/creek investments included in the capital program.
Board Member Mullen urged staff to explore creating a drought contingency reserve over the five‑year planning horizon so the utility can avoid asking ratepayers for further emergency revenue if usage falls during drought periods. Deputy Director Harvey noted the rate‑setting work included planned increases to catastrophic reserves that would provide additional flexibility, and staff said they would continue to examine reserve policies and the timing of any required reimbursements.
The board’s motion to recommend the budgets to city council was moved by Board Member Wright and seconded by Board Member Mullen. The roll call vote was unanimous among present members: Wright (Aye), Mullen (Aye), Bartholow (Aye), Bedingford (Aye), Vice Chair Arononi (Aye), Chair Galvin (Aye). Board Member DeWitt was absent.
The proposed budgets will be reviewed at City Council study sessions and are scheduled for adoption hearings in June as part of the city’s budget calendar.
No public comments were made during the board’s review of the budgets.
