Newman Council accepts 2024 water-rate study, authorizes Proposition 218 process

The Newman City Council on Sept. 10 voted unanimously to accept a 2024 water-rate study and to authorize the city manager to begin Proposition 218 notice and protest procedures needed to change water rates.

Catherine, principal at Hansford Economic Consulting, told the council the study is designed to keep the water enterprise fund self-sustaining and to pay for operations, reserves and capital needs. "About 92% of water system annual costs in a typical year are supported by water rates," Catherine said. She projected that at the median residential use of 1,100 cubic feet per month a typical bill of $49.12 would rise to about $57.80 when the first increase takes effect in January 2025 and to $84.49 by January 2030 under the current multi-year schedule.

The study estimates roughly $4,000,000 in capital projects over the next six years and assumes a loan for chromium-6 regulatory compliance tied to Well 5; the model used a conservative example loan (1% interest, 40-year term) while acknowledging grants or other funding could change the outcome. Catherine also explained legal constraints for fees, noting that revenues "shall not exceed the funds required to provide the service" and fees must be used only for the purpose imposed.

Council members pressed staff on protections for seniors and low-income residents. One councilmember said, "these people are basically on fixed incomes," and urged the council to consider safeguards. Staff replied the city does not currently have a specific senior subsidy for water rates; a low-income program exists under the sewer fund but would require general-fund subsidy to apply to water rates. Staff said they will return with options and noted the council retains the authority to adjust rates downward in future years if funding or grant opportunities reduce capital costs—particularly the Well 5 remediation.

Under the Proposition 218 process outlined by staff, notices will be mailed to all property owners who receive water service and a public hearing is scheduled for Nov. 12; valid protests must be written, include the owner's name and parcel or service address, a statement of the rates being protested, a signature and date. Catherine said if owners of record representing 50% plus one of affected parcels file valid protests the city cannot proceed with the proposed maximum rates.

Unidentified Speaker 9 moved to approve the 2024 water-rate study and to authorize the city manager to initiate Proposition 218 proceedings; Unidentified Speaker 3 seconded. The motion carried 4-0.

The council directed staff to return with draft language to formalize a 2- to 3-year review schedule and to report back with funding details for Well 5 when more information is available.