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Salinas committee recommends rate schedule raising sewer charge to $16.35 monthly for FY25-26; 10-year plan proposed
Summary
After a consultant-led rate study, the Finance Committee recommended approval of a sewer rate schedule that raises the single-residential-equivalent monthly charge to $16.35 in FY 2025-26 with a 2% annual escalator to fund $115 million in capital improvements and close an estimated $400,000 shortfall.
The Salinas Finance Committee on April 8 voted 3-0 to recommend approval of a sanitary sewer rate study that would raise the residential-equivalent monthly sewer charge to $16.35 in fiscal year 2025-26, then escalate rates 2% annually over a 10-year planning period.
DTA consultant Andrea Res summarized the study and said the utility faces an immediate shortfall and a large program of capital needs. Res said the city's system covers "over 280 miles of gravity sewer pipes, 11 lift stations" and that the 10-year capital improvement program incorporated into the financial plan totals about $115,000,000. She said the system had not had a rate increase since 2012 and staff is projecting "a shortfall of $400,000 for this fiscal year." The proposed rate scenario raises the monthly single-equivalent residential charge from just over $5 to $16.35 in FY 25-26, with a 2% escalator producing a rate just under $20 by FY 2034-35.
Funding approach and constraints: Res said the city will use a mix of pay-as-you-go revenues and debt sales depending on timing and market conditions and that part of the rate rationale is to strengthen the city's bond position before issuing additional bonds. Staff noted an active repair need at Lake Street and said that the capital improvement program will guide prioritization and funding timing.
Equity and mitigation: Committee members asked about assistance for hardship and fixed-income residents; Adriana (Community Development staff) said conversations have started with the city manager and finance staff to design an assistance program for residents who have difficulty paying the increased rates. Staff also said notices will be mailed following council approval and that outreach is planned before the public hearing.
Process and timeline: staff said the item will be taken to City Council on April 22; a public hearing is scheduled for June 14 and, if adopted, rates would become effective July 1. A motion to recommend the rate study and schedule passed unanimously with Councilmember D'Arrigo, Councilmember De La Rosa and Mayor Donahue voting in favor.
Next steps: staff will present the rate schedule to council for direction on whether to initiate Proposition 218 proceedings (as referenced in the meeting), proceed with outreach and schedule the June public hearing and subsequent implementation steps.
