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ADOPT A RESOLUTION TO APPROVE AN ADMINISTRATIVE CORRECTION TO THE 2024 WASTEWATER RATE STUDY RESOLUTION EXHIBIT 2 AND AMEND THE FISCAL YEAR 2025-26 FEE SCHEDULE
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve the administrative correction to Exhibit 2 to Resolution No. 2024-11-12-1605 (Attachment A).
2. Amend page I-8 of the Fiscal Year 2025-26 Fee Schedule for Multi-family rate class (Attachment B).
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) is comprised of three enterprise funds including Water, Wastewater, and Stormwater Utilities. The Wastewater Utility includes a sanitary sewer collection system of approximately 900 miles of gravity sewer main, 554 miles of lower lateral pipe, 27 pump stations, and 30 miles of pressurized force main that route sewage to the Regional Wastewater Control Facility (RWCF) for treatment. The system collects sewage from properties within the City, special districts outside the City, and certain areas within San Joaquin County. The RWCF is an advanced tertiary treatment facility with a 55 million-gallon per day (MGD) capacity and is located adjacent to the San Joaquin River.
Following the completion of the 2024 Wastewater Rate Study and public hearing held on November 12, 2024, the City Council adopted, by Resolution No. 2024-11-12-1605 (Resolution), the 2024 Wastewater Rate Study, the maximum wastewater services charges, and the effective dates. After the adoption of the new rates and their effective dates, an administrative error was discovered in the sewer rates associated with Multi-family Residential units listed in Exhibit 2 of the Resolution. This error resulted in monthly rate undercharges of $0.19 and $0.18 for Multi-family Residential units within the City and outside of the City, respectively.
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 and page I-8 of the Fiscal Year 2025-26 Fee Schedule.
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 sanitary sewer 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), MUD staff completed the 2024 Wastewater Rate Study review work and mailed Notices of Public Hearing on September 20, 2024, to 81,847 affected record owners or affected sewer utility customers directly responsible for the payment of sewer service charges.
On November 12, 2024, the City Council held a public hearing to consider testimony and written protests on the adoption of proposed rate adjustments to the City of Stockton wastewater or sewer rates. At the close of the public hearing, the City did not receive written protests from a majority of the affected property owners or affected sewer utility customers directly liable for the payment of the sewer service charges. By Resolution No. 2024-11-12-1605, the City Council adopted the 2024 Wastewater Rate Study that met the requirements of Proposition 218 and the maximum sewer service charges and effective dates.
Present Situation
Prior to implementing the approved rate adjustments each fiscal year, MUD staff review the revenue requirements and the rates necessary to meet those revenue requirements during the Annual Budget process. After notices of rate adjustment were mailed to customers on May 27, 2025, it was discovered that the rates listed in Exhibit 2 to Resolution No. 2024-11-12-1605 (Attachment A) for Multi-family Residential units contained two errors which created undercharges in these rates.
The rates for Multi-family Residential units within the City and outside of the City in Exhibit 2 to Resolution No. 2024-11-12-1605 effective July 1, 2025, were listed at $54.78 and $49.14 per month. However, the correct rates as shown in the 2024 Wastewater Rate Study were $54.97 and $49.32 per month. This discrepancy resulted in a $0.19 cent and $0.18 cent revenue decrease per Multi-family Residential unit within the City and outside of the City respectively, which totaled a $3,220.74 loss in revenue (see table).
|
Customer Classification |
Customers |
Adopted Rate Effective July 1, 2025 |
Correct Rate |
2-Month Billing Impact |
|
Multi-Family (City) |
7,623 |
$54.78 |
$54.97 |
$(2,896.74) |
|
Multi-Family (Non-City) |
900 |
$49.14 |
$49.32 |
$(324.00) |
|
|
|
|
|
$(3,220.74) |
Staff recommend the City Council approve the corrected Wastewater Monthly Rates associated with all Multi-family Residential Units and page I-8 of the Fiscal Year 2025-26 Fee Schedule.
FINANCIAL SUMMARY
Revenues received from multi-family customers are deposited into the Wastewater account 6511-000-442002-610-000-00-65-000-000.
There is no impact to the General Fund, or any other unrestricted funds, from this action.
Attachment A - Exhibit 2 to Resolution No. 2024-11-12-1605
Attachment B - Page I-8 of the Fiscal Year 2025-26 Fee Schedule