Kingsburg council signals preference for Option 1 in water rate study; staff to finalize Prop 218 notice

On Feb. 19, 2025, Kingsburg's City Council heard a detailed presentation on a five-year water rate study from consultant Lehovich and Zeng Municipal Consultants and public-works staff. The study recommends ending the current base fee that includes the first 11,000 gallons, scaling fixed base charges by meter size and billing all water usage at a per-thousand-gallon volume rate, and adopting a five-year revenue plan to cover operating costs, capital needs and debt service.

Consultant Allison said the city's water rates "have not been increased in a few years since 2019," and explained Proposition 218 notice and protest requirements, including a mailed notice to property owners and a 45-day minimum protest period before adoption. Allison presented three rate-package options: two that avoid new debt and a third that models a $2 million debt issuance. She told council that, over five years, Option 1 produces about a 93% cumulative revenue increase and that all three options place the utility in a healthier reserve position by year five.

Public Works Director Daniel Galvez and the consultant outlined the current financial picture: approximately $2.5 million in annual water revenues, a projected near-term shortfall of roughly $200,000 under existing rates, and current reserves of about $1.2 million. The study lists capital needs including well and pipeline projects and contributions to groundwater recharge (South Kings GSA). Staff noted that the system changed materially since 2019 with new treatment (GAC tanks) and additional regulatory requirements.

Council members questioned customer impacts, meter sizes and billing for multifamily properties. Daniel said the majority of city connections are 1-inch meters and that the city's records show "approximately about 141 2 inch meter connections," with one residential property listed as a 2-inch meter that staff will verify. The council discussed methods to notify businesses and ratepayers who would see larger base charges under the new meter-size scaling and staff said notices will advise customers to contact the city if they are unsure of their meter size.

The council, noting a preference from the Finance Committee, signaled support for Option 1 and asked staff to incorporate council feedback into a final narrative report to return on March 19. Staff was directed to prepare Proposition 218 notices, carry out outreach, and schedule the public hearing sequence to permit rates (if adopted) to take effect July 1, 2025, with billing appearance in August.

No final rates were adopted on Feb. 19; council provided policy direction and asked staff to follow the Prop 218 notice and protest procedures before any formal adoption.