REPORT TO COUNCIL
SUBJECT
Title
Public Hearing: Action on Adoption of Resolutions Amending Water, Sewer and Recycled Water Rate Schedules to be Effective July 1, 2026
Report
BACKGROUND
In November 1996, California voters approved Proposition 218, amending the State Constitution to establish a new category of "property-related fees and charges" and to create specific procedural requirements for their adoption. Under Proposition 218, proposed fees or charges for water, sewer, and recycled water services must be preceded by a written notice to customers and a public hearing held no sooner than 45 days after the notice is mailed. The notice must also describe the process for customers to submit a formal protest.
At the public hearing, all protests received are counted. If written protests are submitted by a majority of affected utility customers (50 percent plus one), the proposed fees or charges cannot be adopted. If a majority protest is not received, the City Council may consider and act on a motion to approve the proposed rate adjustments. For the current process, 11,886 protests are required to constitute a majority and prevent Council action on rate increases.
The City reviews and updates its water, sewer, and recycled water rates annually. Each of these utilities operates as a self-sustaining enterprise, and rates are set to recover the revenue necessary to fund operations and maintenance (O&M), capital improvement program (CIP) needs, and, when feasible, reserves for each utility system.
Staff is requesting approval of the attached resolutions establishing updated water and recycled water rates (Attachment 1) and sewer rates (Attachment 2), effective July 1, 2026.
To support this rate-setting process, the Water & Sewer Utilities Department engaged Black & Veatch Management Consulting, LLC (Black & Veatch) to conduct an ongoing cost-of-service study for the City's water, sewer, and recycled water utilities.
DISCUSSION
In Fall 2021, the City conducted ...
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