Council moves forward with Prop 218 process to raise water rates to fund $68.5M plan

City finance and utilities staff presented the draft 2026 water rate study and a five‑year financial plan prepared by Black & Veatch that funds a $68.5 million capital program and phased staffing increases. The study moves the city to a uniform volumetric consumption charge and retains meter‑sized fixed charges, and staff presented refined revenue adjustments to lower near‑term rate pressure.

Staff requested council approval to initiate Proposition 218 proceedings and mail legally required notices to affected parcels. The staff presentation described a typical single‑family bill increasing from $44.50 to $69.31 under the proposed FY2027 rates for a 3/4‑inch meter using 16 units — an increase staff said helps the utility meet required debt service coverage and fund deferred maintenance.

Council approved initiating Prop 218 and setting a June 2 public hearing date; staff will mail notices no later than April 17 and post the final draft rate study and Prop 218 notice to the city website. The city will also provide information on its Low Income Rate Assistance (LIRA) program and a FAQ page for residents. Staff said the plan reduces a previously requested $2M general‑fund loan to $1M and slightly lowered some revenue adjustments while preserving the full capital program and staffing plan.

Council members asked whether the up‑front increases could be smoothed; staff said legal debt‑service requirements limit flexibility and that the plan is designed to meet coverage ratios and fund preventative maintenance.