Kingsburg council accepts water rate study, authorizes Prop 218 notice with drought rates removed

The Kingsburg City Council on March 19 accepted a final water rate study, authorized staff to mail a Proposition 218 notice to property owners and set a public hearing for May 21 — but directed staff to remove proposed drought-rate provisions from the notice before mailing.

The rate study, prepared for the city by L & T consultants, recommends a multi-year rate schedule to cover rising operating and capital costs at the city’s water utility, municipal staff said. Public Works Director Daniel Galvez told the council the study would be posted on a dedicated project web page and that staff would proceed with the Prop 218 notification process if council approved the study.

The study says Kingsburg’s water rates have not changed since 2019 and attributes the proposed increases to new regulatory and capital costs, including upgrades to granular activated carbon (GAC) treatment, ongoing costs tied to the Sustainable Groundwater Management Act (SGMA), and a planned $3.9 million list of capital improvements. Consultant Allison Lihovich said the study’s proposed plan would cover operating and capital costs without new debt while building reserves.

“All of these costs are intended to be recovered in rates,” Allison Lihovich said during the presentation.

Under the proposed structure, the city would phase out the previous practice of including an 11,000-gallon allotment in the base fee and convert to a volume-based billing approach with fixed meter fees scaled by meter size. The consultant told council the draft notice uses Proposition 218’s five-year maximum schedule format, which calls the mailed figures “legal maximum rates” that the council could adopt but later lower if conditions change.

Councilmembers questioned meter-size audits, metering of multifamily accounts and the high projected cost for SGMA-related recharge obligations. Galvez said staff had audited commercial meters and found many were recorded as 2-inch but were actually 1-inch; correcting the inventory raised the projected base fee by about $1 per month in the consultant’s revised draft. He also said the city’s share of anticipated groundwater recharge work is an estimated allocation to the Groundwater Sustainability Agency (GSA) and may change as projects are defined.

Council discussion focused on the optional “drought rates,” a separate schedule that would allow council to increase volume rates during a declared water shortage emergency. Multiple councilmembers said they did not want the council to have open-ended authority to raise drought rates without a separate process. After discussion, the council directed staff to remove the drought-rate language from the Prop 218 notice that will be mailed.

The council’s action at the meeting accepted the rate study report and authorized staff to proceed with the Prop 218 notification and outreach process with the drought-rate provision removed. The city will mail notices to property owners, observe the mandatory 45-day protest period, and hold the public hearing on May 21 at 6 p.m. If there is no majority protest at the hearing, the council may vote to adopt rates at or below the mailed maximums.

Next steps: staff will post the final study and the presentation online, send the Prop 218 mailer, and prepare materials for the May 21 public hearing. If the council adopts rates after the hearing, the proposed effective date in the study is July 1 to align with the fiscal year.

Votes and formal action: The council voted to proceed with the mailing and public hearing with the drought-rate language removed. The motion was made and seconded on the record; the motion carried. (The transcript records “All in favor? Aye. Motion carries.” but does not record individual roll-call votes.)