Ukiah officials review five-year water-rate plan under new Ukiah Valley Water Authority

A consultant for the Ukiah Valley Water Authority laid out a five-year financial plan Tuesday that would raise the City of Ukiah’s water rates in a phased schedule to shore up reserves and fund an ongoing capital program.

Mark Hildebrand of Hildebrand Consulting told the Ukiah City Council that the city’s portion of the JPA financial plan assumes 3% rate increases in the first two years followed by 4% increases in years three through five, with a projected need for roughly 4% increases thereafter absent a new study. He said the city should aim to hold operating reserves near the adopted target and budget for average annual capital spending of about $1.9 million to $2.0 million.

The presentation explained that the Ukiah Valley Water Authority is a joint-powers authority consisting of the City of Ukiah, Calpella, Millview, Redwood Valley and Willow. Under the JPA the city will continue to provide operations and administrative services but each agency will initially maintain separate accounting. Hildebrand said shared operating costs will generally be allocated based on water usage, while billing and account-driven costs may be split by number of accounts; some plant-specific costs such as chemicals or electricity remain the responsibility of the individual agency that incurs them.

Hildebrand summarized the legal and procedural requirements: the city must comply with Proposition 218, which governs municipal rate increases and requires public notice and a protest opportunity (a mailed notice at least 45 days before a hearing); he also noted a related new state procedure (AB 2257) that the JPA plans to follow. He said the consultant team plans to seek executive-committee approval Nov. 6 to mail Proposition 218 notices in mid-November, hold a public hearing in early February and implement the first increases on March 1, 2026, if adopted.

Council members pressed for detail. Council member Roden asked how operating costs and on-call staff time will be allocated when one district requires more maintenance despite low usage; Hildebrand and Finance Director Dan Buffalo said the proposed methodology aims for stable, predictable pass-throughs rather than time-and-material invoicing, but the executive committee will finalize allocation methods and revisit them if inequities appear. Council members also asked about major debt drivers; staff cited a mix of prior plant upgrades, a recycled-water loan from the State Water Resources Control Board, and a portion of city lease-financing bonds allocated to water projects.

Several council members urged caution about timing. One member asked whether the council could stagger this increase so ratepayers do not face multiple utility adjustments close together; Buffalo and Hildebrand said staggering can be discussed but warned that delaying needed adjustments typically increases future percentage changes to make up lost revenue. Hildebrand added that a later 2030 study will reassess needs beyond the five-year window.

No rate ordinance was adopted at Tuesday’s meeting; the item was informational and staff said they will take council feedback to the UVWA executive committee and return with a recommended schedule and Proposition 218 notices.

Provenance: Presentation and Q&A on the Ukiah Valley Water Authority financial plan appear throughout the meeting transcript beginning at 00:24:31 (Mark Hildebrand introduction) and continuing through sustained council questions into the Q&A period. Two representative transcript excerpts used in this article are cited below in provenance.

Ending: The consultant expects to ask the executive committee for approval to mail Proposition 218 notices on Nov. 6 and to hold a public hearing in early February; council feedback will be incorporated before any final rate-setting action.