From: Gregory Dagget
To: Meredith Matthews; Stacy Atkins-Salazar; Alex Stillman; Kimberley White; Sarah Schaefer; City Manager"s Office; Tabatha Miller; David Loya; Rhea Varley
Subject: b. Adopt Resolution No. 256-18 Authorizing Staff to Initiate the Proposition 218 Process for Adjustments to the City of Arcata’s Water and Wastewater Rates.
Date: Monday, November 3, 2025 4:42:10 PM
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Dear Mayor and Council members, and Leadership team.
I am writing regarding Resolution No. 256-18, which authorizes staff to initiate the Proposition 218 process for adjustments to the City of Arcata’s water and wastewater rates. As a resident and ratepayer, I respectfully request clarification and accountability before new rate adjustments are considered.
My first and most pressing question is: How were the funds allocated from the in-depth Water and Wastewater Cost of Service Rate Study conducted in 2020, which was approved and implemented by the City Council on July 1, 2020? That study was intended to provide a transparent financial plan and establish fair, sustainable rates for the period FY 2021 through FY 2025.
According to the City’s adopted Annual Master Fee Schedule Resolutions, the increases were implemented for the average user’s monthly bills.
These increases represented a significant financial commitment from the community, particularly the 37% water rate increase in FY 2021 and the compounded wastewater increases of 10% annually for three years. Ratepayers were assured that these adjustments were necessary to ensure the financial sufficiency of the City’s water and wastewater enterprises, maintain compliance with Proposition 218, and fund critical infrastructure needs.
As the Council now considers initiating another round of rate adjustments through the Proposition 218 process, I believe it is essential to provide the public with:
1. A detailed accounting of how the 2020 study funds were spent, including consultant costs, staff time, and any infrastructure projects or system upgrades that were prioritized as a result.
2. An evaluation of whether the projected financial outcomes of the 2020 study were achieved, including revenue stability, infrastructure improvements, and system reliability.
3. A clear explanation of why additional increases are necessary at this time, given that ratepayers have already borne substantial increases over the past five years.
Transparency and accountability are critical to maintaining public trust. Before moving forward with new rate adjustments, I urge the City to publish a comprehensive report that addresses these questions and demonstrates how past ratepayer contributions have been used to improve Arcata’s water and wastewater systems.
Wastewater Financial Overview – $51.4 Million in CIP Needs
1. Project Breakdown: Please provide a detailed list of the specific wastewater Capital Improvement Program (CIP) projects that make up the $51.4 million identified need over the next five years.
• What are the project names, scopes, and estimated costs for each? • Which projects are considered “critical,” and what criteria were used to define them as such?
2. Grant Funding vs. Ratepayer Burden: Since the City secured significant state and federal grant funding for the $67 million Wastewater Treatment Plant Upgrade, what portion of the $51.4 million in new CIP needs is expected to be covered by outside funding versus ratepayer increases?
3. Debt Financing Strategy: The overview notes that issuance of future debt will help limit rate increases.
• How much of the $51.4 million is planned to be financed through debt versus direct ratepayer contributions?
• What are the projected debt service obligations, and how will they affect wastewater rates in years 3–5 of the rate study period?
Water Financial Overview – $36 Million in CIP Needs
1. Project Details: Please provide a breakdown of the $36 million in identified water CIP needs.
• What are the specific projects, their estimated costs, and their expected timelines? • Which projects address infrastructure that has “exceeded its useful life,” and what condition assessments were used to determine this?
2. Debt Financing and Ratepayer Impact: The Bartle Wells Draft Rate Study assumes most project costs will be financed by issuing new debt.
• What percentage of the $36 million will be debt-financed versus paid directly by ratepayers? • What are the projected annual debt service costs, and how do they compare to current reserves?
Please provide a transparent, detailed accounting of past and future water and wastewater expenditures before approving additional rate adjustments.
Sincerely
Gregory Daggett,