Title
Hold a public hearing and consider an ordinance amending the Code of Ordinances Chapter 30, Water, Sewers and Sewage Disposal, to amend residential and commercial water rates and residential sewer rates.
Body
DATE: September 1, 2026
TO: Kent Calge, Interim City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Water and Sewer Ordinance Rate Amendments
BACKGROUND AND FINDINGS:
On July 7, 2020, City Council received the results of the 2020 Water and Sewer Rate Study. The study found that the City’s water revenues were insufficient to fully fund the projected expenses over the next five years. City Council deferred a rate adjustment at the time due to the pandemic.
A recent five-year Water and Sewer rate analysis recommended a phased approach to adjusting commercial water base rates by meter size to align with American Water Works Association (AWWA) recommendations. The first phase was included in the FY 2023 Budget, followed by additional adjustments in the FY 2024, FY 2025, and FY 2026 Budgets. The proposed FY 2027 Budget includes the fifth and final phase of the commercial water base-rate adjustments, as follows:
|
Commercial Monthly Water Base Rates by Water Meter Size |
|
Water Meter Size |
Current Rate |
Proposed Rate |
|
5/8 and 3/4 inches |
$15.52 |
$15.52 |
|
1 inch |
$21.50 |
$23.37 |
|
1-1/2 inch |
$40.19 |
$46.73 |
|
2 inch |
$62.62 |
$74.77 |
|
3 inch |
$114.96 |
$140.20 |
|
4 inch |
$189.74 |
$233.67 |
|
6 inch |
$376.67 |
$467.33 |
|
8 inch |
$600.99 |
$747.73 |
The proposed FY 2027 Budget also includes a 5% increase to residential water base rates and increases to the three-tier residential water volumetric rates, as follows:
|
Residential Monthly Water Base and Volumetric Rates |
|
Rate Category |
Current Rate |
Proposed Rate |
% Increase |
|
5/8 and 3/4 inches |
$15.54 |
$16.32 |
5% |
|
1 inch |
$16.99 |
$17.84 |
5% |
|
1-1/2 inch |
$20.63 |
$21.66 |
5% |
|
2 inch |
$24.98 |
$26.23 |
5% |
|
3 inch |
$35.15 |
$36.91 |
5% |
|
4 inch |
$49.70 |
$52.19 |
5% |
|
6 inch |
$87.11 |
$91.47 |
5% |
|
8 inch |
$129.60 |
$136.08 |
5% |
|
Volumetric (2,001-15,000 gallons) |
$3.49 |
$3.66 |
5% |
|
Volumetric (15,001 - 30,000 gallons) |
$4.46 |
$4.68 |
5% |
|
Volumetric (Over 30,000 gallons) |
$5.57 |
$6.13 |
10% |
Additionally, the proposed FY 2027 budget includes a 3% increase to residential monthly wastewater base rates as follows:
• an increase to the single-family residential monthly wastewater base rate from $21.59 to $22.24 minimum charge for the first three thousand (3,000) gallons, plus three dollars and eighty cents ($3.80) per one thousand (1,000) gallons thereafter, not to exceed ten thousand (10,000) gallons.
• an increase to the two-family and multifamily monthly wastewater base rate from $21.98 to $22.64 minimum charge for the first three thousand (3,000) gallons, plus three dollars and eighty cents ($3.80) per one thousand (1,000) gallons in excess of minimum thereafter.
• an increase to the mobile home parks wastewater base rate from $21.15 to $21.78 per unit minimum charge for the first three thousand (3,000) gallons per unit, plus three dollars and eighty cents ($3.80) per one thousand (1,000) gallons in excess of minimum, not to exceed ten thousand (10,000) gallons per unit.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
This item conforms with state and local policies.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
There is no financial impact in the current fiscal year. Beginning in FY 2027, the proposed water and wastewater rate adjustments are estimated to generate approximately $537,000 in additional annual revenue. This estimate includes revenue from the residential water base and volumetric rate increases, the residential wastewater base-rate increase, and the fifth and final phase of the commercial water base-rate adjustments. The additional revenue is incorporated into the FY 2027 Proposed Budget.
Is this a one-time or recurring revenue/expenditure?
This is recurring revenue.
Is this revenue/expenditure budgeted?
Yes. The additional revenue is incorporated into the FY 2027 Proposed Budget.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes
RECOMMENDATION:
City Council approve the ordinance amending Chapter 30, Water, Sewers, and Sewage Disposal, of Code of Ordinances, to amend residential and commercial water rates as well as residential sewer rates.
DEPARTMENTAL CLEARANCES:
Public Works
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Ordinance
Presentation