Cotati council directs water advisory representative to endorse Sonoma Water FY 2025–26 transmission budget

The Cotati City Council moved on March 11 to direct its water-advisory committee member to endorse Sonoma Water’s proposed fiscal year 2025–26 transmission system budget, voting 3–0.

Sonoma Water officials told the council the agency’s $82 million draft transmission budget responds to aging facilities and resiliency needs. Jake Spaulding, finance manager for Sonoma Water, said the budget includes roughly $18.3 million in capital work next year, nearly $10 million for resiliency projects and a multiyear tank recoating and operation-and-maintenance program. "We are proud of the transparent and the collaborative process that we undertake annually," Spaulding said during the presentation.

The council’s decision follows a staff report from Craig Scott, Cotati public works director and city engineer, who described Sonoma Water as providing about two-thirds of the city’s water supply and noted that payments to Sonoma Water make up about 30.5% of Cotati’s water utility budget. Scott told the council that Sonoma Water provided revised budget information to member contractors after Cotati staff finalized the city’s draft water and sewer rate study, limiting the city’s ability to incorporate the new wholesale projections earlier in its local rate work.

Why it matters: Sonoma Water serves roughly 600,000 residents and operates three primary aqueducts built between 1959 and 1963. The transmission system is facing higher operation, maintenance and capital costs as assets age; Sonoma Water staff told the council that about 40% of system assets have only 10–20% of useful life remaining. The proposed budget includes grant funding and fund balance offsets but also plans to issue about $33 million in new bonds over the next three years, and Sonoma Water said this would lift the Petaluma Aqueduct’s rate increase projection to about 10.76% for 2025–26.

What councilors asked: Council members pressed Sonoma Water staff on project timing, the lifespan benefits of tank recoating and the budget’s sensitivity to changing water deliveries. Spaulding and Lynn Roselli, Sonoma Water’s financial services division manager, explained that recoating preserves tanks and helps them reach their anticipated useful life (an engineering estimate discussed in the presentation was about 50 years for some tanks) but does not itself create indefinite life extension. Roselli and Spaulding also said the agency’s fully volumetric allocation method makes rates highly sensitive to delivered volumes: when deliveries fall, fixed operating costs are spread across fewer acre-feet and the per-acre-foot rate rises.

Council direction and vote: Council member motioned to instruct the city’s water-advisory committee representative to endorse Sonoma Water’s proposed FY 2025–26 water transmission system budget; a second was recorded and the motion carried 3–0. The motion text (as read aloud) was: "providing direction to the city water advisory committee member to endorse the proposed Sonoma Water fiscal Year 25–26 water transmission system budget." The council did not direct the city representative to request specific amendments to the Sonoma Water packet; rather, the motion sent a straightforward endorsement to the city’s WAC delegate.

Next steps: Sonoma Water’s board will consider final budget approval on April 22; the water advisory committee (WAC) and its technical advisory committee had already reviewed and recommended the draft budget for support. Cotati staff noted the city can revisit local rates and budgets in future years as Sonoma Water updates its long-range financial plan and as delivery volumes change.

Budget details noted in the presentation: Sonoma Water presented a composite transmission budget near $82 million, offset by about $21 million in grants, fund balance and bond proceeds, and noted a proposed $33 million new bond issuance to fund capital needs. Sonoma Water told contractors it had identified about $11.3 million in nonroutine lower-priority maintenance projects and roughly $94 million in capital projects that could be deferred to reduce near-term rate pressure.

Local context: Craig Scott told the council Cotati’s draft rate study was approved before Sonoma Water provided its FY 2025–26 projection, so Cotati’s local rate schedule locked in a course that staff said they would either absorb, adjust in a subsequent rate review, or seek to moderate with budget management and timing of capital work.

Evidence: Council debate and the motion are recorded in the meeting transcript, which includes the Sonoma Water presentation, the long-range financial plan slides, council questions and the recorded 3–0 endorsement vote.