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Council directs staff to finalize water/wastewater rate studies and begin Prop 218 process
Summary
Utilities staff outlined aging water and sewer systems serving 20,000 and 16,000 connections, projected rising O&M and debt needs, and recommended a five-year rate schedule. Council directed staff to finalize the studies and mail Prop 218 notices to customers to begin the protest period.
Utilities staff presented draft water and wastewater cost-of-service studies and a proposed five-year rate schedule designed to align revenues with operating, debt and capital needs.
Staff noted the systems serve more than 20,000 water connections and 16,000 sewer connections, and that much of the infrastructure dates to the 1969–1972 construction era. Projected needs include increased O&M (water O&M rising from roughly $13.9M to $16.5M by 2030), rising debt service and approximately $8M/year in capital improvements for water and $7.9M/year for wastewater. Staff emphasized reserve policy targets (90 days operating reserve and CIP reserves) and warned that continued deficits would increase regulatory and emergency risk.
The staff recommendation was to finalize the studies and start the Proposition 218 process: mail a 45-day notice to customers, conduct outreach and hold a public hearing where rate increases could be adopted unless a majority protest is filed. Council discussed industrial-user impacts and CPI indexing; the city attorney explained a five-year study sets a cap and council can adopt rates below that cap if desired.
Council directed staff to finalize the studies and place Prop 218 action on the March 17 agenda to start the formal protest process.
