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Public Utilities chief warns water and sewer reserves would shrink without rate action; presents FY27 budget
Summary
The Department of Public Utilities presented a $490 million FY27 budget and warned that, without a rate adjustment, water reserves could be drawn down in the next few years and capital projects deferred; staff will deliver a rate study and affordability proposals later this year.
Paul Amico, director of the Department of Public Utilities, presented the utilities budget to the council, describing a proposed FY27 appropriation of roughly $490 million across water, wastewater and solid waste operations and capital programs.
Amico said the water budget is roughly $208.6 million with a capital program of about $80.3 million and the wastewater appropriation is about $206 million with a capital program of roughly $138 million. He said neither the water nor the wastewater budgets include a rate increase for FY27 and warned that drawing on reserves to meet operating needs would be unsustainable.
"On the water side, we will pay our operating costs always," Amico said, "but if we don't act on water, we will erode our fund balance and could be at risk of defaulting on SRF loans by 2028–2029 unless a rate action is taken." He reported operating reserves of about $32.6 million for water and $15.3 million for sewer and said capital deferrals have contributed to an increase in emergency repair spending (he cited roughly $25 million in recent emergency repairs to trunk sewers and regional plant work).
Council members queried the director about conservation enforcement, automated meter alerts, purple-pipe recycled water expansion, and how Measure C/other revenue sources could affect transit or utilities planning. Amico said staff will return with the rate study, policy choices and an affordability-credit program and that the department is examining options like automated enforcement for wasteful outdoor irrigation and a master plan for shade at stops tied to public-health needs.
Why it matters: Fresno's utilities are enterprise funds whose operations and capital programs underlie public health, firefighting and economic activity. The director asked the council to weigh timing and structure of any rate adjustments, and to consider user classes and affordability credits to protect vulnerable customers while preserving capital programs.
