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ADOPT A RESOLUTION TO APPROVE A CORRECTION TO THE RESOLUTION ADOPTING THE 2024 WASTEWATER RATE STUDY
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RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve a correction to Exhibit 2 to Resolution No. 2024-11-12-1605 (Exhibit 1 to the Resolution).
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
The Municipal Utilities Department (MUD) operates and maintains the Regional Wastewater Control Facility (RWCF), an advanced tertiary sewer treatment facility with a 55 million-gallon per day capacity located adjacent to the San Joaquin River.
Following the November 12, 2024 Wastewater Rate Study Public Hearing, the City Council adopted Resolution 2024-11-12-1605 to establish maximum wastewater service charges and effective dates. Staff later identified an administrative error in Exhibit #2 of the Resolution, resulting in monthly undercharges, affecting Multi-family Residential sewer rates. A correction was later approved by the City Council to correct the Multi-family residential wastewater monthly unit rates for only Fiscal Year 2025-2026.
If approved by the City Council, this action will approve an additional correction to Exhibit #2 to Resolution 2024-11-12-1605 including all 2024 Wastewater Monthly Rates associated with Multi-family Residential Units through the end of Fiscal Year 2028-2029.
DISCUSSION
Background
It is a best practice to review customer rates for sewer utility service every five years to confirm whether rates will adequately cover service costs over the following five years, and that the utility maintains adequate financial resources to provide this essential public health service to the community.
In accordance with California Constitution article XIII D, Section 6 (commonly referred to as Proposition 218), the MUD completed the 2024 Wastewater Rate Study and mailed Notices of Public Hearing on September 20, 2024, to 81,847 affected record owners and wastewater utility customers directly responsible for payment of wastewater charges.
On November 12, 2024, the City Council held a public hearing on proposed wastewater rate adjustments. No majority protest was received from affected property owners or customers. The Council then adopted Resolution No. 2024-11-12-1605, approving the 2024 Wastewater Rate Study in compliance with Proposition 218 and establishing maximum charges and effective dates.
Sometime after the adoption of the new rates, MUD discovered administrative errors in the wastewater rates associated with Multi-family Residential units. The errors resulted in monthly wastewater rate undercharges for Multi-family Residential units within the City and outside of the City, respectively. An adjustment was approved to correct the Multi-family residential wastewater monthly unit rates under Resolution 2025-08-12-1214.
Present Situation
Prior to implementing annual rate adjustments this year, MUD staff again reviewed revenue requirements and associated rates and found additional under charges listed in Exhibit #2 to Resolution No. 2024-11-12-1605. While Fiscal Year 2026 Multi-family rate under charges were previously corrected, Multi-family sewer rates for Fiscal Years 2027 through 2029 must also be updated to correct the under charges and ensure accuracy through the remaining Fiscal Years 2028-2029, as shown below.
|
Customer Class |
Current Rates |
July 1, 2026 |
July 1, 2027 |
July 1, 2028 |
|
|
|
|
|
|
|
Multi-Family (City) |
|
$56.97 |
$59.25 |
$61.62 |
|
Multi-Family (Non-City) |
|
$51.11 |
$53.15 |
$55.28 |
|
Corrected Rates |
|
|
|
|
|
Multi-Family (City) |
$54.97 |
$57.17 |
$59.46 |
$61.84 |
|
Multi-Family (Non-City) |
$49.32 |
$51.29 |
$53.34 |
$55.47 |
If approved by the City Council, this action will adopt a resolution approving an administrative correction to the Wastewater Monthly Rates associated with Multi-family Residential Units through Fiscal Year 2028-2029.
FINANCIAL SUMMARY
This action has no impact on the General Fund or any other unrestricted funds.