Menlo Park council authorizes Prop 218 notices for three-year water-rate plan, adopts AB 2257 procedures

Menlo Park staff presented a water-rate study on March 10 and asked council to authorize Proposition 218 notification for proposed rate increases across three fiscal years. Public Works Director Azalea Mitch and Black & Veatch consultants explained that Menlo Park Municipal Water serves about 4,400 connections, relies entirely on the San Francisco Public Utilities Commission for supply, and faces capital needs — most notably a lower-zone reservoir identified in the water-system master plan. The study modeled conservative and aggressive CIP and debt scenarios.

Staff recommended a three‑year (rather than five‑year) rate cycle to allow adjustments once recycled-water availability and capital phasing are clearer; Option 1 (which includes debt financing to smooth immediate impacts) was presented as the lowest-impact path. The staff presentation noted the city has been operating on a pay‑as‑you‑go basis and would consider long-term debt (revenue bonds or loans) to fund large projects; one scenario modeled issuing debt to avoid large near-term rate spikes.

Council authorized staff to mail Proposition 218 notices and to adopt a resolution establishing procedures required under Assembly Bill 2257 (which creates a formal objection handling process for water rates). Staff said notices would be mailed and objections must be received by April 30; the public hearing is set for May 12. Council approved the motion by roll call (Yes: Schmidt, Combs, Taylor, Mayor Nash; Vice Mayor Wise absent). If adopted after the hearing, the new rates would be introduced July 1.

Council asked about debt levels (the water enterprise currently carries no debt and the city has other general-obligation obligations), the location options for the lower-zone storage site (Seminary or Park Lane were noted as evaluated locations), and the need to add operator-in-training positions to build workforce capacity.