From: Tabatha Miller
To: Merritt Perry; Netra Khatri; Emily Sinkhorn
Cc: Rhea Varley; Beth Redfern
Subject: Oct. 1st Staff Report - Water & Wastewater Rate Study Date: Saturday, September 27, 2025 3:19:58 PM
Attachments: BWA Presentation - City of Arcata W+WW Rate Study Draft 9.25.25.pdf image002.png
Hello City Council Members (BCC):
The Bartle Wells Associates presentation for the October 1st City Council meeting contains a significant amount of information. I wanted to ensure you had an opportunity to review the draft (attached) in advance.
Please note there will be a few updates by Wednesday, including the addition of a slide summarizing wastewater rate revenues over the 5-year period and a couple of minor revisions.
As this is agendized as a Staff Report, no Council action will be requested at this meeting. Your informed feedback and questions will help staff prepare for the October 15th meeting.
Water Rates
The proposed water rates reflect substantial increases (see p. 10). Bartle Wells has prepared two scenarios:
one concentrates the increases in the first year, while the other phases them in over five years. We recognize that either approach will be challenging and unpopular.
Wastewater Rates
To lessen impacts on customers, the proposed wastewater rate adjustments—which are considerably lower —would not begin until the third year of the plan.
Drivers of the Increases
As presented last fall, the water rate increases are primarily driven by the need for significant capital infrastructure investments. Reducing the level of increases would reduce future investment in Arcata’s water system. Staff is not recommending this, but it is ultimately Council’s decision.
For further insight into the City’s capital needs and the potential consequences of either investing or deferring investment, I encourage you to reach out to Netra Khatri and Emily Sinkhorn. Please note that Netra will be out of the office from October 10 to October 24.
Historical Under-Investment
A major factor behind the system’s current needs is decades of under-investment. Below is a comparison the net capital asset values (noncurrent assets, net of depreciation) of the water agencies included in Bartle Wells’ water rate survey (see p. 15). Arcata’s value is the lowest of any entity in the comparison, underscoring the necessity of reinvestment in our system.
Please let me know if I can answer any questions or provide additional information.
Thank you,
Tabatha Miller | Assistant City Manager
City Of Arcata - www.cityofarcata.org
736 F Street
Arcata, CA 95521
(707) 825-2120