Rio Vista committee forwards water and sewer rate studies to council after staff Q&A and public concern over loan treatment

The Rio Vista Municipal Rates and Utility Committee voted unanimously on Feb. 27 to recommend that the City Council approve proposed water and sewer rate studies and to direct staff to begin the Prop. 218 notice process and public outreach that would lead to a public hearing and, if adopted, rates effective July 1, 2025.

The decision follows a presentation from staff that laid out the financial plan, cost-of-service analysis and a five-year rate design for water and for two sewer systems (Northwest and Beach). Staff told the committee the outreach schedule would include community presentations and online materials, with an anticipated public hearing on May 20 so, if council approves, rates could be effective July 1 to align with the fiscal year and budgeting cycles.

Why this matters: the studies determine how much residential and commercial customers will pay, how costs are allocated among customer classes, and how future capital projects might be funded. Staff said they updated reserve balances with recent actuals, which flattened the proposed increases across the five-year period compared with a prior draft.

During the presentation staff explained that the cost-of-service methodology allocates network and treatment costs across customer classes by usage and meter size, which is why changes can appear different in dollars but are proportional across classes. Consultant Jeremy (first name used in the presentation) explained the allocation: "we go through a cost allocation based on commodity usage... fixed capacity charges, as well as customer billing components," and showed proposed fixed and volumetric charges by meter size.

Public comment and SRF loan questions

Public attendees pressed staff for clarity about how a potential State Revolving Fund (SRF) loan would be handled in the rate study. A resident, Fred, challenged whether the SRF funds exist and how the city would repay any loan, saying, "There is no CRF loan funding. ... Where is that loan?" He warned that if reserves were being built to anticipate a loan that is not secured, those actions could lead to legal challenges.

Committee members and staff responded that the city has submitted an SRF loan application and that the rate study does not assume SRF-funded project costs in the first four years; rather, staff said the model anticipates that the first year of debt service, if a loan is obtained, would appear in the fifth year of the five-year plan. As one committee member summarized: "The city is seeking a state revolving loan. The application has been submitted ... the project cost for the consolidation of the two plants is not factored into this study [in the first five years]. However, the first year of the debt service is factored in to this rate study in the fifth year." The committee also noted that SRF interest rates are typically below market, which is a reason the city is pursuing the loan.

Outreach and transparency commitments

Staff said they will post detailed rate tables and materials to riovistarates.com after council approval and will provide summarized materials, short videos and targeted presentations for community groups to help residents understand what they will pay and what capital projects are proposed. Committee members asked that staff include abbreviations spelled out (for example, "SRF" = state revolving fund) and provide high-level maps or summaries of proposed capital projects so the public can see what projects would be supported by rates.

Vote and next steps

A motion to forward the rate studies to the City Council passed on a unanimous roll-call vote by the committee members present. If the council approves the studies, staff will mail Proposition 218 notices at least 45 days ahead of the public hearing; property owners or ratepayers may submit written protests, and a majority protest of ratepayers would prevent adoption. The committee also agreed informally to advance the outreach plan so staff can finalize presentation dates and materials.

The committee adjourned at approximately 7:16 p.m. The report and rate tables will be the next items for the City Council to consider and, if council directs, staff will proceed with Prop. 218 notices and the public hearing schedule.