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Committee endorses UAC’s 8% water rate recommendation, rejects staff’s 10% proposal pending further reserve review
Summary
Staff had recommended a 10% FY27 water rate increase; the Utilities Advisory Commission recommended 8% (5–2). After extended debate about SFPUC wholesale costs and reserve policy, the Finance Committee voted to forward the UAC’s 8% recommendation and a smaller immediate reserve transfer.
The Palo Alto Finance Committee on March 17, 2026, recommended that the City Council consider an 8% FY27 water rate increase after a lengthy staff presentation and committee debate on whether to adopt staff’s 10% proposal.
Audriana Arola, senior resource planner for water, told the committee that staff’s proposed FY27 increase was 10% and that the proposal reflected updated SFPUC wholesale cost assumptions and the need to restore reserve levels. Arola said the SFPUC wholesale assumption increased substantially since the preliminary forecast — to roughly 7.4% for FY27 — a change staff flagged as a major driver of the higher proposed…
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