Arcata City Council
April 15, 2026

CITY OF ARCATA

CITY COUNCIL MEETING
AGENDA

Wednesday, April 15, 2026, 6:00 p.m.

Council Chamber
736 F Street, Arcata
Special accommodations for the disabled who attend City meetings can be made in advance by contacting the City Clerk at 822-5953. Assistive listening devices are available. _____________________________________________________________________________________ Pursuant to Government Code section 54957.5, all writings or documents relating to any item on this agenda which have been provided to a majority of the City Council, including those received less than 72 hours prior to the City Council meeting, will be made available for public inspection in the agenda binder located on the counter in the lobby at Arcata City Hall, 736 F Street, during normal business hours, and on the City's website at www.cityofarcata.org.

PLEASE NOTE: Speakers wishing to distribute materials to the City Council at the meeting are requested to provide 10 copies to the City Clerk.
_____________________________________________________________________________________ How to Observe and Participate in the Meeting:

Observe:

Members of the public can attend the meeting in person or observe the meeting on Zoom (see below), on Access Humboldt Channel 10, online by visiting www.cityofarcata.org and clicking on the See Live Meetings, Agendas, and Archives button on the home page, or on the City’s YouTube channel at https://www.youtube.com/c/CityofArcataCA
Public Comment Participation in Person and on Zoom:

Members of the public may attend the meeting in person and give public comment. Or, they may access the meeting via Zoom to provide public comment.

Join from a PC, Mac, iPad, iPhone or Android device: Please use this URL:
https://us06web.zoom.us/j/86773627430

1. If you want to comment during the public comment portion of any item, click on raise your hand on the right-hand side of your screen. When it is time for public comment on the item on which you wish to speak, the Clerk will unmute you. You will have 3 minutes to comment (2 minutes for Early Oral Communications), subject to the Mayor’s discretion.

2. Or join by phone:

1. *67 1-669-900-6833

2. Enter Meeting ID: 867 7362 7430
If you are accessing the meeting via telephone and want to comment during the public comment portion of any item, press star (*) 9 on your phone. This will raise your hand. When it is time for public comment on the item on which you wish to speak, the Clerk will unmute your phone. You will

3. hear a prompt that will indicate your phone is unmuted. You will have 3 minutes to comment (2 minutes for Early Oral Communications), subject to the Mayor’s discretion.

1. LAND ACKNOWLEDGMENT

2. FLAG SALUTE

3. ROLL CALL

4. CEREMONIAL MATTERS
a. Proclamation in Recognition of World Tai Chi Day, Saturday April 25, 2026. b. Proclamation in Recognition of Bike Month, May 2026.

5. REPORT BY COMMISSION/COMMITTEE
a. Receive Annual Report from the Wetlands and Creeks Committee.

6. STAFF REPORTS
All reports shall be specifically limited to City business and shall not request or lead to action by the Council at this meeting.
a. Receive an Update Regarding the City's Paving Projects from City Engineer Netra Khatri. b. Receive an Update Regarding the City's Steel Waterline Replacement Project from City Engineer Netra Khatri.

7. ORAL AND WRITTEN COMMUNICATIONS [EARLY - TIME LIMITED] The City Council values your comments. The public comment period allows people to address the Council on matters not on the agenda. This early section of public comment is limited to 15-minutes and speakers are limited to 2 minutes each. If you prefer to have a full 3 minutes of time for your public comment, this item is continued at the end of the meeting under item 12 where speakers are granted 3 minutes. Please know that pursuant to the Brown Act, the Council cannot discuss or take action on items not listed on the agenda. The Council may respond to statements. There will also be a time to provide public comment specific to each item when that item is being reviewed by the Council.

8. N/A

9. CONSENT CALENDAR
All matters on the Consent Calendar are considered to be routine by the City Council and are enacted in one motion. There is no separate discussion of any of these items. If discussion is required, that item is removed from the Consent Calendar and considered separately. At the end of the reading of the Consent Calendar, Council members can request that an item be removed for separate discussion.

Members of the public may comment on any items remaining on the consent calendar in the comment period before the vote.
a. Approval to Waive Reading of the Text and Consent to Read by Title Only for Any Ordinance on this Agenda.
b. Approve the Minutes of the City Council Meeting of April 1, 2026. c. Bi-Weekly Report on Disbursements.

April 15, 2026 - City Council Agenda

d. Adopt Ordinance No. 1584, An Ordinance of the City Council of the City of Arcata Repealing Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration), of the Arcata Municipal Code. e. Approve the Purchase of Submersible Pumps and Controls from Xylem Water Solutions USA, Inc., in the Amount of $413,175.36; and Approve Necessary and Associated Related Actions.

10. OLD BUSINESS
a. Conduct a Public Hearing and Consider Resolution No. 256-52 Adopting Water and Wastewater Rate Adjustments for FY 2025-26 through 2029-30 and Finding that Adoption of the Rates is Exempt from the California Environmental Quality Act (CEQA).

11. NEW BUSINESS
a. Introduce Ordinance No. 1586, An Ordinance of the City Council of the City of Arcata Amending the Arcata Municipal Code Relating to Cannabis Consumption Lounge Permits, Standards, and Restrictions.
b. Public Hearing to Approve Annual Engineer's Report and Declare City's Intention to Continue to Levy and Collect Assessments of Three Existing Landscape Maintenance Assessment Districts.
c. Public Hearing to Consider Adopting Resolution No. 256-53, Updating the Master Fee Schedule for Fiscal Year 2026-2027.
d. Hold a Public Hearing to Consider Abatement for the Properties Located at 4600 West End Rd, Arcata, CA 95521, Assessor's Parcel No. 507-081-055; and Adopt Resolution No. 256-55 Ordering the Abatement of a Nuisance Regarding 4600 West End Rd.

12. ORAL AND WRITTEN COMMUNICATIONS [CONTINUED]
The City Council values your comments. The public comment period allows people to address the Council on matters not on the agenda. Speakers will be limited to 3 minutes each. Please know that pursuant to the Brown Act, the Council cannot discuss or take action on items not listed on the agenda. The Council may respond to statements.

13. CITY MANAGER'S REPORT

14. COUNCIL REPORTS
All reports shall be specifically limited to items relating to City business and shall not request or lead to action by the Council at this meeting.

15. DATES OF FUTURE MEETINGS AND FUTURE AGENDA ITEMS
a. Confirm a Fiscal Year 2026/2027 Budget Study Session for April 29, 2026, at 3:30 p.m. in the Council Chamber.

16. CLOSED SESSION

17. CLOSED SESSION REPORTS

18. ADJOURNMENT
Other than items continued or tabled to a date certain, the Council may, by majority vote, continue all matters not completed by 10:30 p.m.

April 15, 2026 - City Council Agenda

Proclamation
in Recognition of
World Tai Chi Day Saturday, April 25th, 2026
WHEREAS, World Tai Chi Day is now celebrated in hundreds of cities in over 80 nations annually; and
WHEREAS, Tai Chi has been called “medication in motion” by Harvard Health Publication for the myriad of health benefits it offers; and WHEREAS, numerous studies have pointed to the benefits of Tai Chi for stress relief, improved balance and coordination among the elderly as well as improved behavior for adolescents with attention deficit hyperactivity disorder; and WHEREAS, World Tai Chi Day is meant to bring the community together to learn more about this gentle exercise—a series of mindful, relaxed movements that people of all ages and fitness levels can practice to improve health by boosting the immune system, increasing vitality, longevity, and well-being, NOW, THEREFORE, BE IT PROCLAIMED that the City Council of the City of Arcata hereby recognizes World Tai Chi Day in the City of Arcata, Arcata Plaza, at 10 AM on Saturday, April 25th, 2026 and encourages all residents to attend and to visit worldtaichiday.org to learn more.

Dated: April 15th, 2026
________________________________
Kimberley White
Mayor

Proclamation
in Recognition of
BIKE MONTH May 2026
WHEREAS, whether you’re bicycling to make essential trips to work, school, or shopping, or for fitness or recreation, you are part of the movement for safer streets, connected communities, a healthier planet, and happier commuters; and
WHEREAS, bicycling addresses the global problems of climate change, car dependence and air and noise pollution. It reduces traffic, parking congestion and noise, and increases physical activity and public health, such that investments in active transportation make communities healthier, more vibrant, and more family-friendly; and
WHEREAS, after earning a bronze level Bike-Friendly Community by the League of American Bicyclists in 2016, the City of Arcata earned the silver-level award in 2019, and in 2020 Arcata City Hall earned a Bicycle Friendly Business Bronze Award. The City is committed to providing safe, accessible, and equitable bicycle transportation facilities to our community to reach the gold and platinum level; and
WHEREAS, the City of Arcata has adopted Complete Streets policy and goals to advance a bicycle-friendly, active-transportation network throughout town, investing in active infrastructure such as the Humboldt Bay Trail, Arcata Annie & Mary Trail, and designated bike lanes, as well as Arcata’s Bike Share Program; and
WHEREAS, the month of May is National Bike Month; May 6 is “Bike & Roll to School Day,” and May 11–17, 2026, is “Bike to Work/Bike to Wherever Week”; and WHEREAS, the City and the Bike Month Humboldt Coalition (BikeMonthHumboldt.org) encourage residents and visitors to join the community in supporting and enjoying Bike Month activities in May, namely the annual Arcata Kids’ Bike Rodeo, happening on Saturday, May 30, 10am to noon, at the Fuente Nueva Charter School playground (on Janes Road); and NOW, THEREFORE, BE IT PROCLAIMED by the City Council of the City of Arcata that May 2026 is BIKE MONTH throughout Arcata. The Council encourages everyone to participate in Bike Month activities, encourages the installation of bicycle parking and other facilities to support Arcata’s growing number of bicyclists, and encourages people to bicycle as a means of transportation this and every month.

Dated: April 15, 2026
Kimberly White
Mayor

1 CITY OF ARCATA WETLANDS AND CREEKS COMMITTEE
2025 ANNUAL REPORT TO THE CITY COUNCIL
For Presentation to the Arcata City Council
April 15, 2026
Committee Members:

Justin Hawkins, Chair
Steven Railsback, Vice-Chair (January to June 2025)
Bob Brown
Emma Held, Vice-Chair (July to December 2025)
Chris McAuliffe
Jeremy Svehla
Nathanael Pope (Resigned March 2025)
Staff Liaison(s):

Morguine Sefcik, Environmental Programs Manager, Environmental Services Department 33 Years
1992-2025

2 The Wetlands and Creeks Committee was established in 1992. The Committee serves in an advisory capacity to the City Council, City Manager, and City staff in matters related to policies, management and projects affecting creeks, wetland, and tideland resources in Arcata.

Additionally, the Wetlands and Creeks Committee considers the perspective of open space and agricultural values since the Open Space and Agriculture Committee was dissolved. The Wetlands and Creeks Committee has seven members, appointed by the City Council, that serve overlapping three-year terms and represent various areas of expertise, knowledge, and interest.

The City’s Environmental Programs Manager, Morguine Sefcik, serves as the staff liaison for the Committee. The Committee held four regular meetings and one special meeting during 2025.

Meetings are held in the Council Chamber on the 4th Thursday of every odd month.

The Committee reviewed and/or made recommendations on the following items:

A. Wetlands and Creeks - Policies/Ordinances/General Plan Elements

1. Community Development Director David Loya presented information to the Committee about the City’s Local Coastal Program (LCP) and updates to the Local Coastal Element at their March 27, 2025 meeting. At the Committee’s May 22, 2025 meeting they made a recommendation to the Planning Commission and the City Council to approve the updates to the LCP.

B. Management of City-owned Wetlands and Creeks

1. The Committee received regular updates from staff on progress of creek and wetland restoration and management projects and programs, including:
a. Annie & Mary Trail Connectivity Project status: construction started on 9/22/2025.

The creation of a wetland at the City’s Happy Valley property that the Committee visited in Fall of 2024 will be used to satisfy some of the mitigation requirements.

In addition, removal of non-native invasive species, particularly reed canary grass in portions of North Fork Janes Creek along West End Road and Aldergrove Road will be conducted. A CA Conservation Corps (CCC) crew started removing the reed canary grass along West End Road in late August. (3/27/2025, 9/25/25) b. Arcata Sea Level Rise (SLR) Vulnerability Assessment & Capital Improvement Projects (CIP) Adaptation Plan grant from the Coastal Commission is moving forward. The CIP Adaptation Concept Plan is expected to be completed by the end of the year. (9/25/25)
c. The City submitted a grant application to the Ocean Protection Council (OPC) SB1 Grant Program to implement a SLR Adaptation Pathways Plan including advancing concept adaptation designs. (9/25/25)
d. Jolly Giant Creek restoration planning efforts updates – Early 2025 saw renewed momentum by City staff to pursue planning grant funding for Jolly Giant Creek.

City staff will incorporate coastal resilience planning into the broader restoration

3 planning outline that was developed in 2024 with a goal of applying to the CA State Coastal Conservancy’s (SCC) Climate Bond Funding in 2026. (2/4/25, 9/25/25) e. City staff met with staff from Humboldt County and the Humboldt County Resource Conservation District (HCRCD) about the next phase of the Jacoby Creek Restoration Planning Project in early 2025. The City supported the submission of a grant application by HCRCD to the SCC in late 2025. (2/4/25, 9/25/25) f. The City approved an Adopt-a-Park application for the Grotzman Creek Detention Basin from Sunny Brae Middle School staff Asia Brunell that the Committee had heard about during public comment at their May 22, 2025 meeting. (9/25/25) g. City staff and community member, Scott McBain, identified a location in Jolly Giant Creek for installation of a data logger to measure water level, turbidity, dissolved oxygen, temperature, and conductivity. The data logger equipment was purchased with Measure A funding and installed in spring 2025. A link to the data was shared with the Committee members. (2/4/25)
h. The City’s Engineering Department and Environmental Services Department partnered with two Cal Poly Humboldt capstone classes this semester: 1) An Environmental Resources Engineering student capstone design class is looking at Jolly Giant Creek flooding issues, and 2) An Environmental Science and Management capstone class will survey ponds at the Arcata Marsh for the presence of the invasive plant South American spongeplant, map, and report their findings. (2/4/25)
C. Public Outreach

1. The Committee was informed about and invited to attend a Watershed Stewards Program (WSP) member led public volunteer workday in Shay Park on April 5, 2025 to remove invasive non-native plants along Jolly Giant Creek and plant native plants. (2/4/2025)

2. Committee Vice-Chair, Steve Railsback, attended the City Council Study Session with Committee Chairs on February 12, 2025 in the Council Chamber.

3. The Committee received a presentation from Cal Poly Humboldt Fisheries Professor Darren Ward on fish and water quality monitoring studies in Jolly Giant Creek and Janes Creek, which is funded by Measure A. A variety of fish species were found during sampling efforts, including juvenile Coho salmon. (9/25/25)

4. Committee member Railsback shared Darren Ward’s recent fish sampling efforts in lower Beith Creek on the City’s Baylands property and reported that juvenile coho and cutthroat trout were found. In addition, juvenile coho were found in Janes Creek near the Janes Creek Meadows Park, during another sampling effort. (11/13/2025)

5. The Committee received a presentation from Wiyot Tribe staff Marisa McGrew on sampling efforts in local waterways for the chemical 6PPD-quinone (6PPDQ) a tire antidegradant that is lethal to coho salmon. The Tribe sampled the following creeks in Humboldt County in 2025: Jolly Giant Creek (Arcata), Powers Creek, Salmon Creek, Strongs Creek, Elk

4 River. Sampling methods, results, data gaps, and recommendations were shared with the Committee. (11/13/2025)
D. Measure A - Open Space, Parks, and Trails Special Tax Updates

1. The Committee received a report on the Open Space, Parks, & Trails Special Tax (Measure A) 2024/2025 priorities and outcomes and made recommendations for Fiscal Year 2025/2026 at their February 4, 2025 meeting. In addition, they selected two representatives for the Measure A Ad Hoc Group, which met February 15, 2025.

E. Developed the Following Committee Goals for FY 2025/26 at their February 4, 2025 meeting:

1. Support City staff in implementation of the Municipal Separate Storm Sewer System (MS4) Permit as updated, including stormwater education and outreach.

2. Maintain presence on the Measure A Ad-Hoc Group and revisit priority funding list twice per year.

3. Continue to review and provide policy recommendations to support habitat, water quality, and climate resiliency in the City of Arcata.

4. Explore Cal Poly Humboldt partnership opportunities focused on improvements to Arcata’s wetlands and creeks resources.

5. Support City staff in sea level rise adaptation planning and implementation efforts.

6. Provide support for development and updates to local restoration plans, e.g., Jacoby Creek Gannon Slough Wildlife Area complex and Jolly Giant Creek Rehabilitation Plan.
a. Pursue funding for a Jolly Giant Creek Rehabilitation Plan. b. Engage Committee and solicit feedback on the concept designs for the Jacoby Creek Enhancement Project.
c. Better define restoration opportunities in Janes Creek through continued data collection partnerships with Cal Poly Humboldt.

7. Focus on control and management of invasive species that are affecting Arcata’s wetlands and creeks.
a. Removal of high/“A” rated invasive species, e.g. South American spongeplant at the Arcata Marsh and Wildlife Sanctuary and the Aldergrove Marsh

8. Explore options for inter-committee information sharing and idea exchange with the Wetlands and Creeks Committee, e.g. share goals with other Committees, invite other Committee members, and/or provide updates to other Committees.

9. Explore subcommittee formation to support staff as needed and feasible, e.g. grant proposals.

1 CITY OF ARCATA

CITY COUNCIL MEETING

MINUTES
April 1, 2026, 6:00 p.m.

Council Chamber
736 F Street, Arcata

Present: Mayor White, Vice Mayor Atkins-Salazar, Councilmember Schaefer, Councilmember Stillman

Absent: Councilmember Matthews
Staff Present: City Manager Perry, Assistant City Manager Miller, Chief of Police Ortega, City Engineer Khatri, Human Resources/Administrative Services Director Vink, Assistant City Engineer Caisse, IT and Digital Media Specialist Carrillo, City Clerk Varley
A regular meeting of the City Council of the City of Arcata was held on the above date at 6:01 p.m. as a hybrid meeting, via teleconference utilizing Zoom Video Communications and in person, with Mayor White presiding. Notice of this meeting was posted on March 27, 2026.
_____________________________________________________________________

1. LAND ACKNOWLEDGMENT
Mayor White read a statement acknowledging that Arcata sat on ancestral Wiyot land.

2. FLAG SALUTE
Mayor White led the Pledge of Allegiance.

3. ROLL CALL
City Clerk Varley called roll.

4. CEREMONIAL MATTERS
a. Certificate of Recognition Presented to the Students of Sunnybrae Middle School.

Asia Brannell and students from Sunny Brae Middle School accepted the Certificate of Recognition.
b. Proclamation in Recognition of the Week of the Young Child, April 11–17, 2026.

2 The proclamation was later mailed to North Coast Childrens Services. c. Proclamation in Recognition of Sexual Assault Awareness Month, April 2026.

Councilmember Schaefer read the proclamation and presented it to two representatives from North Coast Rape Crisis Team.
d. Proclamation in Recognition of the 2026 Godwit Days Spring Migration Bird Festival, April 16–19, 2026.

Councilmember Stillman read the proclamation and spoke about the upcoming event.

5. REPORT BY COMMISSION/COMMITTEE
There was none.

6. STAFF REPORTS
There were none.

7. ORAL AND WRITTEN COMMUNICATIONS [EARLY - TIME LIMITED] Mayor White invited public comment.

Public Comment: Jesse Almas, and an unidentified member of the audience.

Mayor White closed the oral and written communications [early - time limited] period.

8. N/A
None.

9. CONSENT CALENDAR
Vice Mayor Atkins-Salazar requested that Items F and G be pulled from the Consent Calendar for further discussion.

Mayor White invited public comment.

Public comment: Joanne McGarry.

Mayor White closed the public comment period.

ON MOTION BY SCHAEFER, SECONDED BY STILLMAN, AND WITH A

FOUR-TO-ZERO VOICE VOTE WITH ONE ABSENCE, THE COUNCIL
ADOPTED [CONSENT CALENDAR] ITEMS A THROUGH E AND ITEM H.

AYES: WHITE, ATKINS-SALAZAR, SCHAEFER, STILLMAN. NOES: NONE.

ABSENT: MATTHEWS. ABSTENTIONS: NONE.
a. Approval to Waive Reading of the Text and Consent to Read by Title Only for Any Ordinance on this Agenda.
b. Approve the Minutes of the City Council Special Meeting of March 18, 2026.

3 c. Approve the Minutes of the City Council Meeting of March 18, 2026. d. Bi-Weekly Report on Disbursements.
e. Approve an Application for Grant Funds from the California State Coastal Conservancy for the Jolly Giant Creek and Butcher Slough Coastal Resilience and Restoration Planning Project; and Authorize the City Manager to Execute All Applicable Documents.
h. Approve a Contract Amendment Amounting to $11,890 with Northpoint Consulting Group, Inc., for Engineering Services for the First Street Lift Station Improvement Project, for a Total Not to Exceed $182,200; and Authorize City Manager to Sign Documents.
f. Request the Annual Engineer's Report and Preparation of Notices to Declare the City's Intention to Continue to Levy and Collect from Existing Assessment Districts to Include Mad River Parkway Business Center, Windsong Subdivision and Janes Creek Meadow.

Assistant City Engineer Caisse responded to inquiries and comments from the Council.

ATKINS-SALAZAR MOVED AND STILLMAN SECONDED TO
APPROVE ITEM F [REQUEST THE ANNUAL ENGINEER'S REPORT

AND PREPARATION OF NOTICES TO DECLARE THE CITY'S

INTENTION TO CONTINUE TO LEVY AND COLLECT FROM

EXISTING ASSESSMENT DISTRICTS TO INCLUDE MAD RIVER

PARKWAY BUSINESS CENTER, WINDSONG SUBDIVISION AND
JANES CREEK MEADOW].

Mayor White invited public comment.

There being none, Mayor White closed the public comment period.

THE MOTION PASSED ON A FOUR-TO-ZERO VOICE VOTE WITH
ONE ABSENCE. AYES: WHITE, ATKINS-SALAZAR, SCHAEFER,
STILLMAN. NOES: NONE. ABSENT: MATTHEWS. ABSTENTIONS:

NONE.
g. Authorize Staff to Investigate and Potentially Issue a Request for Proposal (RFP) for Redesign and Update of the Visit Arcata Website.

Assistant City Manager Miller responded to inquiries and comments from the Council.

ATKINS-SALZAR MOVED AND SCHAEFER SECONDED TO

INVESTIGATE OPTIONS FOR REDESIGNING AND UPDATING THE

CITY OWNED VISIT ARCATA WEBISTE AND, IF DEEMED

APPROPRIATE, BRING THE REQUEST FOR PROPOSALS BACK TO
THE COUNCIL AFTER THE ECONOMIC STRATEGIC PLAN.

Mayor White invited public comment.

4 Public comment: Joanne McGarry, and Crystal Hensen.

Mayor White closed the public comment period.

THE MOTION PASSED ON A THREE-TO-ONE-TO-ZERO VOICE
VOTE WITH ONE ABSENCE. AYES: WHITE, ATKINS-SALAZAR,
SCHAEFER. NOES: STILLMAN. ABSENT: MATTHEWS.

ABSTENTIONS: NONE.

10. OLD BUSINESS
There was none.

11. NEW BUSINESS
a. Public Hearing on City Staff Vacancies and the City’s Recruitment and Retention Efforts to Comply with Legal Obligations (Government Code Section 3502.3).

Human Resources and Administrative Services Director Vink provided a presentation.

Mayor White opened the public hearing.

Public comment: Joanne McGarry, and Gregory Daggett.

Mayor White closed the public hearing.

This item was a presentation and public hearing only. No Council action was taken.
b. Introduce Ordinance No. 1584, An Ordinance of the City Council of the City of Arcata Repealing Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration), of the Arcata Municipal Code.

Police Chief Ortega presented.

Mayor White opened the public hearing.

Public comment: Crystal Hensen, Gregory Daggett, and Joanne McGarry.

Mayor White closed the public hearing.

Chief Ortega responded to inquiries and comments from the Council.

ON MOTION BY SCHAEFER, SECONDED BY STILLMAN, AND WITH

A FOUR-TO-ZERO VOICE VOTE WITH ONE ABSENCE, THE
COUNCIL INTRODUCED ORDINANCE NO. 1584, AN ORDINANCE OF

THE CITY COUNCIL OF THE CITY OF ARCATA REPEALING
ARTICLE 12 (PUBLIC SAFETY COMMITTEE) IN CHAPTER 3
(BOARDS, COMMISSIONS, COMMITTEES, AND TASK FORCES) OF
TITLE II (ADMINISTRATION), OF THE ARCATA MUNICIPAL CODE;

WAIVED READING OF THE TEXT AND CONSENTED TO READ BY

5 TITLE ONLY. AYES: WHITE, ATKINS-SALAZAR, SCHAEFER,
STILLMAN. NOES: NONE. ABSENT: MATTHEWS. ABSTENTIONS:

NONE.

12. ORAL AND WRITTEN COMMUNICATIONS [CONTINUED]
Mayor White invited public comment.

Councilmember Stillman left the Chamber at 7:17 p.m. and returned at 7:20 p.m.

Public comment: Gregory Daggett, and Joanne McGarry.

Mayor White closed the oral and written communications [continued] period.

13. CITY MANAGER'S REPORT
There was none.

14. COUNCIL REPORTS
Presenters: Stillman, Atkins-Salazar, Schaefer, and White.

15. DATES OF FUTURE MEETINGS AND FUTURE AGENDA ITEMS
a. Confirm Three Fiscal Year 2026/2027 Budget Study Sessions for April 6, 8, and 29, 2026–Each at 3:30 p.m. in the Council Chamber.

BY GENERAL CONSENSUS, THE COUNCIL CONFIRMED THREE
FISCAL YEAR 2026/2027 BUDGET STUDY SESSIONS FOR APRIL 6, 8, AND 29, 2026—EACH AT 3:30 P.M. IN THE COUNCIL CHAMBER.

16. CLOSED SESSION
There was none.

17. CLOSED SESSION REPORTS
There were none.

18. ADJOURNMENT
The meeting was adjourned at 7:35 p.m.

Respectfully submitted,
Rhea Varley
City Clerk

STAFF REPORT – CITY COUNCIL MEETING
TO: Honorable Mayor and City Council Members
FROM: Tabatha Miller, Assistant City Manager/Finance Director PREPARER: Tabatha Miller, Assistant City Manager/Finance Director DATE: April 15, 2026
TITLE: Bi-Weekly Report on Disbursements.

RECOMMENDATION:

It is recommended that the Council approve the report on disbursements listing for the period March 21, 2026, through April 3, 2026
INTRODUCTION:

Pursuant to Section 37208 of the California Government Code, checks drawn in payment of demands certified by the City Finance Director as conforming to the authorized expenditures set forth in the City Council adopted budget need not be audited by the City Council prior to payment but may be presented to the City Council at the first meeting after delivery.

DISCUSSION:

The attached Disbursements Listing lists the checks and electronic payments that have been paid for the period identified above. The Finance Director certifies that the disbursements were drawn in payment of demands conforming to the adopted budget and that these demands are being presented to the City Council at its first meeting after the delivery of the checks and electronic payments.

BUDGET/FISCAL IMPACT:

The disbursements presented were drawn in payment of demands included within the adopted budget.

RECOMMENDED COUNCIL ACTION:

Approve the report on disbursements listing for the period of March 21, 2026, through April 3, 2026.

Consent Calendar vote.

ATTACHMENTS:

A. Cash Disbursements 3.21.2026-4.3.2026

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262358 Andy Chan & Alan Chan as Trustees John Susie Chan 234-30-13-58253 $ 755.44 3/24/2026 262359 Arcata 7th Street LP 234-30-13-58253 $ 1,094.20 3/24/2026 262360 Arcata House Partnership 234-30-13-58253 $ 629.00 3/24/2026 262360 Arcata House Partnership 234-30-13-58253 $ 1,112.00 3/24/2026 262361 Arcata Humboldt Associate 234-30-13-58253 $ 741.60 3/24/2026 262362 Arcata Plaza Point LP 234-30-13-58253 $ 369.84 3/24/2026 262363 Arcata Humboldt Associates II 234-30-13-58253 $ 914.99 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 528.82 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 527.85 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 889.00 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 889.00 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 878.78 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 808.00 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 889.00 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 449.60 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 889.00 3/24/2026 262364 Arcata Valley West BLVD LP 234-30-13-58253 $ 439.48 3/24/2026 262365 Berman Kassi 234-30-13-58253 $ 1,081.15 3/24/2026 262366 Blasch Shirley 234-30-13-58253 $ 31.82 3/24/2026 TBRA Utility Reimbursement 262367 Burns Charles 234-30-13-58253 $ 129.86 3/24/2026 TBRA Utility Reimbursement 262368 Burtchett Mark 234-30-13-58253 $ 551.18 3/24/2026 262369 Cole Lori 234-30-13-58253 $ 24.21 3/24/2026
262370 Curry Lisa 234-30-13-58253 $ 43.20 3/24/2026 TBRA Utility Reimbursement 262371 Delbiaggio Diane 234-30-13-58253 $ 102.00 3/24/2026 TBRA Utility Reimbursement 262372 Durham Charlan 234-30-13-58253 $ 185.59 3/24/2026 TBRA- UTILITY REIMBURSEMENT 262373 Gwynn Jocelyn 234-30-13-58253 $ 850.00 3/24/2026 262374 Hood Kathi 234-30-13-58253 $ 80.92 3/24/2026 TBRA UTILITY REIMBURSEMENT 262375 Masler Jonathan 234-30-13-58253 $ 13.83 3/24/2026 TBRA- Utility Reimbursement 262376 Obeji Louise 234-30-13-58253 $ 889.98 3/24/2026
262377 RUI Partners 234-30-13-58253 $ 850.00 3/24/2026
262378 Rural Community Housing Development Corporation 234-30-13-58253 $ 253.71 3/24/2026 262378 Rural Community Housing Development Corporation 234-30-13-58253 $ 468.35 3/24/2026 262379 Sandpiper Park 234-30-13-58253 $ 333.13 3/24/2026 262380 Smith Ken 234-30-13-58253 $ 782.00 3/24/2026
262381 Smith Tracee 234-30-13-58253 $ 37.82 3/24/2026 TBRA Utility Reimbursement - 262382 Stillman Alexandra 234-30-13-58253 $ 637.45 3/24/2026 262383 Strombeck Properties 234-30-13-58253 $ 970.80 3/24/2026 262384 Strombeck Properties 234-30-13-58253 $ 1,441.00 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 485.23 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 549.13 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 608.53 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 578.37 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 473.16 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 390.58 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 492.80 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 573.92 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 648.26 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 559.26 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 623.66 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 534.17 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 333.66 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 357.31 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 533.98 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 521.98 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 276.77 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 543.12 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 566.24 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 441.09 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 702.30 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 604.06 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 648.26 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 600.12 3/24/2026 262385 Sun Communities Inc 234-30-13-58253 $ 532.58 3/24/2026 262386 QSW LLC 234-30-13-58253 $ 435.92 3/24/2026
262387 Wickham-Doane Dulce 234-30-13-58253 $ 490.00 3/24/2026 262388 Williamson Shaelene 234-30-13-58253 $ 164.44 3/24/2026 TBRA Utility Reimbursement 262389 Yurok Indian Housing Authority 234-30-13-58253 $ 262.92 3/24/2026 262389 Yurok Indian Housing Authority 234-30-13-58253 $ 412.10 3/24/2026 262390 Ziegler Amy 234-30-13-58253 $ 590.89 3/24/2026

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262391 Advanced Security Systems 101-50-85-51770 $ 155.84 3/27/2026 BUILDINGS OPO FY25/26 262392 Arcata Chamber Of Commerce 101-10-01-52101 $ 12,500.00 3/27/2026 Multi-Year Contract for Chamber Activities
(Economic Development
262393 Arcata Stationers 662-60-67-53300 $ 85.96 3/27/2026 OPO Office Supplies 262393 Arcata Stationers 101-50-41-53300 $ 59.52 3/27/2026 Office Supplies 262393 Arcata Stationers 101-30-31-53300 $ 59.52 3/27/2026 Office Supplies 262393 Arcata Stationers 101-30-11-54200 $ 76.06 3/27/2026 Office Supplies 262394 AT&T 101-40-21-52522 $ 341.97 3/27/2026 CLETS LINE 262395 Caltest Analytical Lab 662-60-67-51742 $ 356.25 3/27/2026 OPO WW lab testing 262395 Caltest Analytical Lab 662-60-67-51742 $ 338.20 3/27/2026 OPO WW lab testing 262396 Carollo Engineers Inc. 662-70-67-57601 $ 9,536.75 3/27/2026 Engineering Services for Ph1 of WWTF
Improvements Project. Contr
262397 Eureka Ready Mix Concrete Co Inc 661-50-63-53800 $ 688.94 3/27/2026 open po for aggregate 262398 Fedex 662-60-67-53100 $ 183.91 3/27/2026 OPO Shipping 262399 Fisher Scientific Company 662-60-67-53500 $ 156.38 3/27/2026 OPO Lab Supplies 262399 Fisher Scientific Company 662-60-67-53500 $ 127.27 3/27/2026 OPO Lab Supplies 262400 Fold-A-Goal 101-50-81-57612 $ 5,622.75 3/27/2026 ASC Soccer Goals 262401 GHD Inc. 265-30-13-58211 $ 877.72 3/27/2026
Environmental Monitoring & Soil Testing
Services - LLI Site Clea
262402 Harper Ford Country 771-50-57-54400 $ 36.23 3/27/2026 open po for parts 262403 Hooven & Company Excavating 101-50-45-57601 $ 61,465.00 3/27/2026 Repave Intersection at 14th St. & LK Wood
Blvd.
262404 Humboldt Fasteners 101-50-85-55400 $ 13.16 3/27/2026 Parks OPO FY25/26 -ACC Bike Racks 262405 Cal Poly Sponsored Programs Foundation 662-60-67-51728 $ 5,737.26 3/27/2026 AMRI Annual Contract FY 25/26 262406 Infosend Inc 662-60-67-51770 $ 1,767.79 3/27/2026 25-26 FY OPO Infosend Printing 262406 Infosend Inc 662-60-67-53100 $ 2,879.66 3/27/2026 25-26 FY OPO Infosend Postage 262406 Infosend Inc 101-00-00-21090 $ (7.50) 3/27/2026 25-26 FY OPO Infosend Postage 262406 Infosend Inc 662-60-67-53100 $ 3.75 3/27/2026 25-26 FY OPO Infosend Postage 262406 Infosend Inc 661-60-64-53100 $ 3.75 3/27/2026 25-26 FY OPO Infosend Postage 262406 Infosend Inc 661-60-64-53100 $ 2,879.66 3/27/2026 25-26 FY OPO Infosend Postage 262406 Infosend Inc 661-60-64-51770 $ 1,767.80 3/27/2026 25-26 FY OPO Infosend Printing 262407 Kernen Construction 207-50-45-53800 $ 18.77 3/27/2026 open po for aggregate 262407 Kernen Construction 207-50-45-53800 $ 1,360.71 3/27/2026 open po for aggregate 262407 Kernen Construction 101-00-00-21090 $ (18.77) 3/27/2026 open po for aggregate 262408 Mad River Union 101-60-89-51300 $ 922.13 3/27/2026 Rec Activity Guide Printing Costs 262408 Mad River Union 101-60-89-51770 $ 970.57 3/27/2026 Rec Activity Guide Printing Costs 262408 Mad River Union 101-10-05-51300 $ 150.00 3/27/2026 Mad River Union - Legal Ads 262408 Mad River Union 101-10-15-51300 $ 140.00 3/27/2026 Mad River Union 262409 Martin Bros Company 662-60-67-57600 $ 16,142.50 3/27/2026 Sludge Bed Fascia Replacement Project 262410 McCullough Construction Inc 661-70-63-57500 $ 516,213.37 3/27/2026 Steel Waterline Replacement Project 262411 Mendes Supply Co 101-50-85-53600 $ 394.29 3/27/2026 BUILDINGS OPO FY25/26 - Janitorial 262412 Microbac Laboratories Inc 661-60-64-53500 $ 156.00 3/27/2026 OPO Water QC Standards 262412 Microbac Laboratories Inc 662-60-67-53500 $ 66.00 3/27/2026 OPO Wastewater QC Standards 262413 Miller Farms Nursery Inc 101-00-00-21090 $ (29.63) 3/27/2026 Parks OPO FY25/26 - Fertilizer 262413 Miller Farms Nursery Inc 101-50-81-53500 $ 29.63 3/27/2026 Parks OPO FY25/26 - Fertilizer 262413 Miller Farms Nursery Inc 101-50-81-53500 $ 2,147.81 3/27/2026 Parks OPO FY25/26 - Fertilizer 262414 The Mill Yard 101-50-85-55400 $ 100.07 3/27/2026 BUILDINGS OPO FY25/26 262414 The Mill Yard 101-50-85-55400 $ 259.63 3/27/2026 BUILDINGS OPO FY25/26 262414 The Mill Yard 101-50-85-55400 $ 120.36 3/27/2026 BUILDINGS OPO FY25/26 262414 The Mill Yard 101-50-85-55400 $ 0.12 3/27/2026 BUILDINGS OPO FY25/26 262414 The Mill Yard 101-00-00-21090 $ (0.12) 3/27/2026 BUILDINGS OPO FY25/26 262414 The Mill Yard 210-70-48-57600 $ 49.60 3/27/2026 Parks OPO FY25/26 262415 Mission Linen Ind.Inc. 661-60-64-53600 $ 47.01 3/27/2026 OPO Janitorial Supplies 262415 Mission Linen Ind.Inc. 661-50-63-51770 $ 11.03 3/27/2026 open po for first aid supply 262415 Mission Linen Ind.Inc. 662-60-67-54200 $ 11.03 3/27/2026 OPO 1st Aid Cabinet Service 262415 Mission Linen Ind.Inc. 662-60-67-51500 $ 133.51 3/27/2026 OPO Weekly Linens 262415 Mission Linen Ind.Inc. 771-50-57-51500 $ 90.78 3/27/2026 open po for linens 262416 Motorola Solutions Inc 101-40-21-55300 $ 46,258.80 3/27/2026 WATCHGUARD MAINTENANCE CONTRACT 262417 Norman's Dry Cleaners 101-40-21-51500 $ 24.50 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 200.00 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 34.25 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 151.50 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 161.00 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 39.50 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 151.25 3/27/2026 DRY CLEARNING SERVICES 262417 Norman's Dry Cleaners 101-40-21-51500 $ 55.70 3/27/2026 DRY CLEARNING SERVICES 262418 Northern CA Gloves 101-50-85-51500 $ 203.41 3/27/2026 Parks OPO FY25/26 - PPE for facilities

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262419 Northern CA Safety Consortium 207-50-45-51400 $ 545.00 3/27/2026 Chris Worthey-Reed HAZWOPER Registration 262419 Northern CA Safety Consortium 662-60-67-51400 $ 545.00 3/27/2026 Kenneth Bergen HAZWOPER Registration 262419 Northern CA Safety Consortium 662-50-65-51400 $ 545.00 3/27/2026 Jessiah Class HAZWOPER Registration 262420 American Hospital Management 101-10-15-51702 $ 43.75 3/27/2026 Occupational Health - Physicals 262421 Phoenix Group Information Systems 101-40-23-54200 $ 280.00 3/27/2026 262422 Langston Brandon 771-50-57-55100 $ 50.00 3/27/2026 rep window crack 412 262423 Shred Aware LLC. 101-40-21-51770 $ 132.12 3/27/2026 SHRED SERVICES 262423 Shred Aware LLC. 101-10-05-54200 $ 42.76 3/27/2026 Shred Bin Servicing Rates 262424 Spencer Electric Inc 101-50-41-55310 $ 7,046.94 3/27/2026 Streetlights Maintenance and Repair 262425 USA Blue Book 662-60-67-51728 $ 120.52 3/27/2026 OPO AMRI Lab Supplies 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 444.23 3/27/2026 open po for fuel 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 1,529.76 3/27/2026 open po for fuel 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 1,416.83 3/27/2026 open po for fuel 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 160.38 3/27/2026 open po for fuel 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 102.02 3/27/2026 open po for fuel 262426 Valley Pacific Petroleum Services Inc 771-50-57-54700 $ 632.55 3/27/2026 open po for fuel 262427 Richard M Vitale 211-30-13-58222 $ 21,580.00 3/27/2026 Mobilehome Repairs and Installations for
MORE Program (Vitale)
262428 Lisa Wise Consulting Inc 265-30-13-58212 $ 29,602.50 3/27/2026 Arcata Zoning Updates Planning Services 2025 262429 Aflac 101-00-00-22110 $ 709.28 3/27/2026
CAFETERIA PLAN PREMIUM STATEMENT;
MAR26
262430 Brooks Julia 570-00-00-24157 $ 5.00 3/27/2026

CASH LOCATED IN FOUND WALLET WITH ID

FOR JULIA BROOKS
262431 Fisher Madeline 570-00-00-24157 $ 129.00 3/27/2026

CASH FOUND IN WALLET BELONGING TO

MADELENE FISHER
262432 Hecht Alexander 570-00-00-24157 $ 56.00 3/27/2026

CASH FOUND IN WALLET BELONGING TO

ALEXANDER HECHT
262433 Hinderliter De Llamas & Associ 101-20-07-51778 $ 1,377.87 3/27/2026 CONTRACT SERVICES SALES TAX JAN-MAR26 -

AUDIT SERVICES SALES TAX
262433 Hinderliter De Llamas & Associ 101-20-07-51778 $ 2.44 3/27/2026 AUDIT SERVICES - TRANSACTION TAX 262433 Hinderliter De Llamas & Associ 101-20-07-51778 $ 900.00 3/27/2026

CONTRACT SERVICES TRANSACTIONS TAX
JAN-MAR26
262433 Hinderliter De Llamas & Associ 101-20-07-51778 $ 277.08 3/27/2026 CONTRACT SERVICES SALES TAX JAN-MAR26 -

AUDIT SERVICES SALES TAX
262434 LeadsOnline Parent LLC 101-40-21-51600 $ 5,760.00 3/27/2026 CELLHAWK SUBSCRIPTION RENEWAL 262435 Lo Meadow 101-00-00-23070 $ 50.00 3/27/2026 DEPOSIT REFUND PICNIC AREA 3/21/26 262436 Mineva Daniela 101-00-00-42800 $ 21.40 3/27/2026

SSVR RENEWAL LATE FEE REFUND FOR

EXTENUATING CIRCUMSTANCES
262437 OpenGov Inc 775-10-71-51790 $ 52,677.00 3/27/2026 PERMITTING & LICENSING SUITE SOFTWARE 262438 O & M Industries Inc 662-60-67-51770 $ 323.76 3/27/2026 HEATER TROUBLESHOOTING 262439 Pacific Gas & Electric Co 662-60-67-51100 $ 35,275.64 3/27/2026 ACCT: 7687817960-5; MAR26 262439 Pacific Gas & Electric Co 101-50-41-51100 $ 6,862.57 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 101-50-81-51100 $ 2,374.80 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 101-50-85-51100 $ 16,138.01 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 661-60-64-51100 $ 6,010.40 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 666-60-51-51100 $ 26.86 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 662-60-67-51100 $ 5,364.10 3/27/2026 ACCT: 2887200165-7; MAR26 262439 Pacific Gas & Electric Co 101-50-81-51100 $ 340.98 3/27/2026 ACCT: 6236826977-5; MAR26 262439 Pacific Gas & Electric Co 101-50-81-51100 $ 85.03 3/27/2026 ACCT: 9882435832-3; MAR26 262439 Pacific Gas & Electric Co 101-50-81-51100 $ 92.35 3/27/2026 ACCT: 4230642013-6; MAR26 262439 Pacific Gas & Electric Co 101-50-41-51100 $ 13.35 3/27/2026 ACCT: 8609465746-6; MAR26 262439 Pacific Gas & Electric Co 101-50-41-51100 $ 4.75 3/27/2026 ACCT: 3491172675-9; MAR26 262440 PG&E Cfm/Ppc Department 662-70-67-57604 $ 885.53 3/27/2026 1ST ST LIFT STATION - GAS & ELECTRIC PGE

EXTENSION AGREEMENT FEE
262441 Pacific Outfitters Adventures Inc. 101-40-21-51500 $ 1,185.18 3/27/2026

VESTS FOR VAN DUNK N WILSON &

SHANNON
262441 Pacific Outfitters Adventures Inc. 101-40-21-51500 $ 1,626.17 3/27/2026

VESTS FOR VAN DUNK N WILSON &

SHANNON
262441 Pacific Outfitters Adventures Inc. 101-40-21-51500 $ 1,185.18 3/27/2026

VESTS FOR VAN DUNK N WILSON &

SHANNON
262442 Paz Valerie 570-00-00-24157 $ 35.00 3/27/2026

CASH LOCATED IN FOUND CELL PHONE

WALLET FOR VALERIE PAZ
262443 Ray Robert 570-00-00-24157 $ 7.00 3/27/2026

CASH LOCATED IN FOUND WALLET WITH ID

FOR ROBERT RAY
262444 REMIF 101-00-00-22205 $ 3,133.73 3/27/2026
INVOICE FOR SELF FUNDED PLAN (DENTAL);
APR26

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262444 REMIF 101-40-21-50990 $ 54.60 3/27/2026
INVOICE FOR SELF FUNDED PLAN (VISION);
APR26
262444 REMIF 101-00-00-22204 $ 718.54 3/27/2026
INVOICE FOR SELF FUNDED PLAN (VISION);
APR26
262444 REMIF 101-00-00-22205 $ 12,350.68 3/27/2026
INVOICE FOR SELF FUNDED PLAN (DENTAL);
APR26
262444 REMIF 559-00-00-24059 $ 173.26 3/27/2026
INVOICE FOR SELF FUNDED PLAN (VISION);
APR26
262444 REMIF 101-40-21-50990 $ 1,836.00 3/27/2026
INVOICE FOR SELF FUNDED PLAN (MEDICAL);
APR26
262444 REMIF 101-00-00-22203 $ 7,844.16 3/27/2026
INVOICE FOR SELF FUNDED PLAN (MEDICAL);
APR26
262444 REMIF 101-00-00-22203 $ 71.60 3/27/2026
INVOICE FOR SELF FUNDED PLAN (DENTAL);
APR26
262444 REMIF 559-00-00-24059 $ 778.63 3/27/2026
INVOICE FOR SELF FUNDED PLAN (DENTAL);
APR26
262444 REMIF 101-40-21-50990 $ 131.16 3/27/2026
INVOICE FOR SELF FUNDED PLAN (DENTAL);
APR26
262444 REMIF 559-00-00-24059 $ 16,936.84 3/27/2026
INVOICE FOR SELF FUNDED PLAN (MEDICAL);
APR26
262444 REMIF 101-00-00-22203 $ 9.10 3/27/2026
INVOICE FOR SELF FUNDED PLAN (VISION);
APR26
262444 REMIF 101-00-00-22203 $ 215,209.00 3/27/2026
INVOICE FOR SELF FUNDED PLAN (MEDICAL);
APR26
262444 REMIF 101-00-00-22204 $ 2,338.70 3/27/2026
INVOICE FOR SELF FUNDED PLAN (VISION);
APR26
262445 Robins Darcy 101-00-00-46365 $ 6.75 3/27/2026 FELDENKRAIS CANCELLATION 262445 Robins Darcy 101-00-00-46360 $ 48.00 3/27/2026 FELDENKRAIS CANCELLATION 262446 Rostad Juniper 101-60-89-51400 $ 36.48 3/27/2026

REIMBURSEMENT FOR CPR/FIRST AID

TRAINING
262447 Save California Salmon 101-00-00-23070 $ 300.00 3/27/2026

DEPOSIT REFUND REDWOOD LOUNGE
3/20/26
262448 Spencer Electric Inc 101-50-41-55310 $ 1,497.63 3/27/2026 REPAIRED LIGHTS @ 10TH & H - JAN26 FIRE

RELATED
262449 Standard Insurance Company 101-00-00-22206 $ 1,024.55 3/27/2026 LIFE INSURANCE PREMIUMS; APR26 262449 Standard Insurance Company 775-10-79-50990 $ (7.75) 3/27/2026 LIFE INSURANCE PREMIUMS; APR26 262450 SWRCB 661-60-64-51600 $ 65.00 3/27/2026 MARCELA RODRIGUEZ D2 EXAM APPLICATION 262451 Steve's Septic Service 555-00-00-24055 $ 895.00 3/27/2026

GRAY WATER PUMPING FROM ARCATA HOUSE

PARTNERSHIP
262452 Stork Evan 101-60-89-54200 $ 37.65 3/27/2026
REIMBURSEMENT FOR CAMP SUPPLIES; JUL25
& FEB26
262453 TargetSolutions Learning LLC 662-60-67-51770 $ 1,600.00 3/27/2026 W/WW MODULES 262454 Tippin Riley 101-00-00-14000 $ 3,362.71 3/27/2026 ADVANCED DISABILITY PENSION PAYMENT;
MAR26
262455 Vero Broadband LLC 775-10-71-51210 $ 430.00 3/27/2026 CITY HALL/PD INTERNET (FIBER); MAR26 262455 Vero Broadband LLC 101-40-21-51200 $ 250.00 3/27/2026 CITY HALL/PD INTERNET (FIBER); MAR26 262455 Vero Broadband LLC 775-10-71-51200 $ 75.00 3/27/2026 ALLIANCE LIFT STATION (FIBER); MAR26 262456 Adams Todd 662-60-67-51400 $ 408.00 4/3/2026
CWEA Annual Conference Sacramento CA 4/7-
4/10/26
262457 Euan-Estrada Jose 662-50-65-51400 $ 286.00 4/3/2026 CWEA Annual Conference Sacramento CA 4/7-
4/10/26
262457 Euan-Estrada Jose 662-50-65-51400 $ 123.00 4/3/2026 CWEA Annual Conference Sacramento CA 4/7-
4/10/26
262458 Vahey Andrew 662-60-67-51400 $ 408.00 4/3/2026
CWEA Annual Conference Sacramento CA 4/7-
4/10/26
262459 Advanced Security Systems 212-30-11-55400 $ 142.50 4/3/2026 Monthly Freezer Monitoring (Foodworks) 262460 Brant Electric 662-60-67-55400 $ 602.92 4/3/2026 AMIC OPO FY25/26 262461 Caltest Analytical Lab 662-60-67-51742 $ 356.25 4/3/2026 OPO WW lab testing 262461 Caltest Analytical Lab 662-60-67-51742 $ 174.80 4/3/2026 OPO WW lab testing 262461 Caltest Analytical Lab 662-60-67-51742 $ 174.80 4/3/2026 OPO WW lab testing 262461 Caltest Analytical Lab 662-60-67-51742 $ 174.80 4/3/2026 OPO WW lab testing 262462 Fedex 662-60-67-53100 $ 781.07 4/3/2026 OPO Shipping 262463 Ed The Plumber Fitz it Right Plumbing LLC 555-00-00-24055 $ 48,957.00 4/3/2026 Arcata House Grease Interceptor Replacement 262464 GHD Inc. 662-70-67-57601 $ 164.90 4/3/2026
Env. Permit Compliance & Monitoring services -
AWTF Phase 1
262464 GHD Inc. 265-30-13-58211 $ 660.56 4/3/2026
Environmental Monitoring & Soil Testing
Services - LLI Site Clea

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262464 GHD Inc. 210-70-48-57600 $ 217.28 4/3/2026
Annie & Mary Trail Environmental Compliance
Monitoring Services
262465 Hideaway Storage Inc. 211-30-13-58222 $ 80.00 4/3/2026 Storage Costs for MORE Program 262465 Hideaway Storage Inc. 211-30-13-58222 $ 80.00 4/3/2026 Storage Costs for MORE Program 262465 Hideaway Storage Inc. 211-30-13-58222 $ 80.00 4/3/2026 Storage Costs for MORE Program 262465 Hideaway Storage Inc. 211-30-13-58222 $ 80.00 4/3/2026 Storage Costs for MORE Program 262466 Hooven & Company Excavating 101-50-85-57300 $ 1,816.62 4/3/2026 Ball Park Construction 262467 Humboldt Termite & Pest Control 212-30-11-55400 $ 166.77 4/3/2026 Pest Control (Foodworks) 262468 Infosend Inc 661-60-64-51770 $ 647.88 4/3/2026 25-26 FY OPO Infosend Printing 262468 Infosend Inc 661-60-64-53100 $ 1,068.69 4/3/2026 25-26 FY OPO Infosend Postage 262468 Infosend Inc 101-00-00-21090 $ (5.42) 4/3/2026 25-26 FY OPO Infosend Postage 262468 Infosend Inc 662-60-67-51770 $ 647.87 4/3/2026 25-26 FY OPO Infosend Printing 262468 Infosend Inc 662-60-67-53100 $ 1,068.68 4/3/2026 25-26 FY OPO Infosend Postage 262468 Infosend Inc 662-60-67-53100 $ 2.71 4/3/2026 25-26 FY OPO Infosend Postage 262468 Infosend Inc 661-60-64-53100 $ 2.71 4/3/2026 25-26 FY OPO Infosend Postage 262469 Kernen Construction 662-50-65-53800 $ 28.23 4/3/2026 open po for aggregate 262469 Kernen Construction 101-00-00-21090 $ (28.23) 4/3/2026 open po for aggregate 262469 Kernen Construction 662-50-65-53800 $ 2,046.71 4/3/2026 open po for aggregate 262470 Mendes Supply Co 212-30-11-55400 $ 297.47 4/3/2026 Cleaning Supplies and Services (Foodworks) 262471 Microbac Laboratories Inc 662-60-67-51742 $ 303.00 4/3/2026 OPO WW Lab Testing and Anaylsis 262472 Miller Farms Nursery Inc 101-50-81-55400 $ 85.12 4/3/2026 Parks OPO FY25/26 - building/grounds
maintenance
262472 Miller Farms Nursery Inc 101-00-00-21090 $ (1.17) 4/3/2026 Parks OPO FY25/26 - building/grounds
maintenance
262472 Miller Farms Nursery Inc 101-50-81-55400 $ 1.17 4/3/2026 Parks OPO FY25/26 - building/grounds
maintenance
262473 Mission Linen Ind.Inc. 212-30-11-55400 $ 94.24 4/3/2026 Mop/Rag Service (Foodworks) 262473 Mission Linen Ind.Inc. 212-30-11-55400 $ 20.84 4/3/2026 Mop/Rag Service (Foodworks) 262473 Mission Linen Ind.Inc. 212-30-11-55400 $ 94.24 4/3/2026 Mop/Rag Service (Foodworks) 262473 Mission Linen Ind.Inc. 661-60-64-53600 $ 154.03 4/3/2026 OPO Janitorial Supplies 262473 Mission Linen Ind.Inc. 662-60-67-54200 $ 11.03 4/3/2026 OPO 1st Aid Cabinet Service 262473 Mission Linen Ind.Inc. 661-60-64-51500 $ 133.51 4/3/2026 OPO Weekly Linens 262474 American Hospital Management 101-10-15-51702 $ 815.80 4/3/2026 Occupational Health - Physicals 262474 American Hospital Management 101-10-15-51702 $ 685.00 4/3/2026 Occupational Health - Physicals 262474 American Hospital Management 101-10-15-51702 $ 1,631.52 4/3/2026 Occupational Health - Physicals 262474 American Hospital Management 101-10-15-51702 $ 712.04 4/3/2026 Occupational Health - Physicals 262475 O & M Industries Inc 101-50-85-51770 $ 410.88 4/3/2026 General Facilities Work - FY 25/26 262475 O & M Industries Inc 101-50-85-51770 $ 180.00 4/3/2026 General Facilities Work - FY 25/26 262475 O & M Industries Inc 101-50-85-51770 $ 220.00 4/3/2026 General Facilities Work - FY 25/26 262475 O & M Industries Inc 101-50-85-51770 $ 870.00 4/3/2026 General Facilities Work - FY 25/26 262475 O & M Industries Inc 101-50-85-51770 $ 146.00 4/3/2026 General Facilities Work - FY 25/26 262476 Parkson Corporation 662-60-67-55300 $ 837.02 4/3/2026 Est. Taxes and Shipping 262476 Parkson Corporation 662-60-67-55300 $ 2,166.00 4/3/2026 Roto Strainer Replacement Parts 262477 safetybygeorge LLC 207-50-45-51400 $ 233.33 4/3/2026 OPO Safety Contract 262477 safetybygeorge LLC 661-60-64-51400 $ 233.33 4/3/2026 OPO Safety Contract 262477 safetybygeorge LLC 662-60-67-51400 $ 233.34 4/3/2026 OPO Safety Contract 262478 Sexton Construction 211-30-13-58222 $ 20,577.23 4/3/2026 Mobilehome Inspections and Repairs for
MORE Program
262479 SmithGroup Inc 101-70-45-51770 $ 3,053.00 4/3/2026 Planning and Public Engagement Efforts for the
Reconnect Arcata
262479 SmithGroup Inc 101-70-45-51770 $ 12,652.50 4/3/2026 Planning and Public Engagement Efforts for the
Reconnect Arcata
262480 SHN Consulting Engineers & Geologists Inc 213-30-13-58007 $ 4,326.25 4/3/2026 Butcher Slough Site Investigation and Human
Health Risk Assessme
262481 Stericycle Inc. 662-60-67-51770 $ 67.43 4/3/2026 OPO Sharps Pick up 262482 AT&T 775-10-71-51200 $ 751.68 4/3/2026 STANDARD PHONE CHARGES; MAR26 262482 AT&T 101-40-21-51200 $ 94.95 4/3/2026 STANDARD PHONE CHARGES; MAR26 262483 CDWG 775-10-71-51770 $ 3,073.80 4/3/2026

ADOBE ACROBAT LICENSES (SOFTWARE NO
TAX)
262484 Franchise Tax Board 101-00-00-22109 $ 151.85 4/3/2026 PR Batch 00028.03.2026 Franchise Tax Board 262485 HdL Software LLC 101-00-00-41600 $ 40.06 4/3/2026 PAYMENT SERVICES - ENDING 1/31/26 262485 HdL Software LLC 101-00-00-41600 $ 47.06 4/3/2026 PAYMENT SERVICES - ENDING 2/28/26 262486 Hurley Ryan 101-50-41-51500 $ 330.75 4/3/2026 ZAMBERLAN TRAIL LITE GTX HIKING BOOTS 262487 Infosend Inc 101-20-07-51770 $ 10.10 4/3/2026 BUSINESS LICENSE RENEWAL 262487 Infosend Inc 101-20-07-53110 $ 25.60 4/3/2026 BUSINESS LICENSE RENEWAL

City of Arcata Bi-Weekly Report on Cash Distributions 3/21/2026-4/3/2026 Check # Vendor Name GL Account Ammount Date Description 262488 Islamic Center of Arcata 101-00-00-44210 $ 1,023.80 4/3/2026

REFUND DUE TO CANCELLATION OF

ONGOING RENTAL RESERVATIONS
262489 Jacoby Creek Water Dist 661-00-00-46711 $ 1,905.01 4/3/2026 JACOBY CREEK BILLING; FEB26 262490 Jansen Abraham 101-40-21-51500 $ 121.24 4/3/2026 BIANCHI DUTY BELT NAME PATCH (X2) 262491 Lorenzen Brian 207-50-45-51500 $ 350.00 4/3/2026 BOLDUC BRUNT HAWX PAVER 262492 Meadows Chad 661-60-64-51500 $ 110.23 4/3/2026 ALTRA EXPERIENCE WILD 2 - LOW HIKER 262493 Pacific Gas & Electric Co 101-50-41-51100 $ 133.57 4/3/2026 ACCT: 1999785564-8; MAR26 262493 Pacific Gas & Electric Co 101-50-41-51100 $ 16.02 4/3/2026 ACCT: 2728803311-4; MAR26 262493 Pacific Gas & Electric Co 101-50-41-51100 $ 64.51 4/3/2026 ACCT: 7618650342-1; MAR26 262494 Rice Michael 101-50-85-51500 $ 165.36 4/3/2026 KEEN UTILITY BOOT (FLINT II MID) 262495 Stillman Alexandra 662-00-00-46830 $ 8,015.00 4/3/2026

SEWER LATERAL DEPOSIT & SIDEWALK REPAIR
REFUND - 1050 12TH ST
262496 Optimum 775-10-71-51210 $ 216.54 4/3/2026 REDWOOD PARK INTERNET; APR26 262496 Optimum 775-10-71-51210 $ 245.91 4/3/2026 D ST INTERNET; APR26 262496 Optimum 775-10-71-51210 $ 120.00 4/3/2026 FOODWORKS INTERNET; APR26 262497 Wage Works 101-00-00-22110 $ 134.25 4/3/2026 FSA & HSA MONTHLY ADMIN FEE; MAR26 262498 Williams Scotsman Inc. 662-70-67-57601 $ 180.06 4/3/2026

FINAL CHARGES FOR ES TEMP OFFICE

DURING WWTP CONSTRUCTION
312311 Payroll Misc $ 1,710.82 4/3/2026
312312 Payroll Misc $ 270.47 4/3/2026
312313 Payroll Misc $ 430.68 4/3/2026
312314 Payroll Misc $ 668.98 4/3/2026
312315 Payroll Misc $ 584.12 4/3/2026
312316 Payroll Misc $ 2,019.26 4/3/2026
312317 Payroll Misc $ 451.79 4/3/2026
312318 Payroll Misc $ 476.03 4/3/2026
312319 Payroll Misc $ 857.61 4/3/2026
312320 Payroll Misc $ 6,375.00 4/3/2026
312321 Payroll Misc $ 180.72 4/3/2026
312322 Payroll Misc $ 114.81 4/3/2026
312323 Payroll Misc $ 66.60 4/3/2026
ACH PERS Misc $ 80,881.34 4/3/2026
ACH Payroll Deductions ACH Misc $ 147,154.73 4/3/2026
ACH CA State Disbursement Unit 101-00-00-22109 $ 119.07 4/3/2026 PR Batch 00028.03.2026 California Child
Support Order
ACH Operating Engineers No 3 101-00-00-22113 $ 1,260.09 4/3/2026 PR Batch 00028.03.2026 Union Dues ACH HealthEquity HAS Misc $ 1,130.76 4/3/2026
ACH Payroll Misc $ 289,818.88 4/3/2026
ACH UAL Misc $ 180,742.75 3/26/2026
Total $ 2,053,707.54

STAFF REPORT – CITY COUNCIL MEETING
TO: Honorable Mayor and City Council Members
FROM: Chris Ortega, Chief of Police
PREPARER: Rhea Varley, City Clerk
DATE: April 15, 2026
TITLE: Adopt Ordinance No. 1584, An Ordinance of the City Council of the City of Arcata Repealing Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration), of the Arcata Municipal Code.

RECOMMENDATION:

It is recommended that the Council:
1) Adopt Ordinance No. 1584, An Ordinance of the City Council of the City of Arcata Repealing Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration), of the Arcata Municipal Code; and 2) Waive reading of the text and consent to read by title only.

INTRODUCTION:

The City is making administrative changes to the Arcata Municipal Code through this Ordinance.

The Ordinance will repeal Article 12, Public Safety Committee, within Chapter 3 of Title II. This action is intended to streamline the City’s advisory body structure and align public safety policy discussion and oversight directly with the City Council and City Manager.

Public safety topics are addressed through multiple channels, including City Council meetings, public engagement, and ongoing coordination among the Police Department, City Manager, and senior City staff. The City Council receives public input and establishes policy direction through noticed public meetings. City staff, including the Chief of Police, City Manager, and senior city staff, regularly engage with community members and stakeholder groups to inform operational and strategic priorities. Policy direction is developed through this collaborative process and implemented by the City Manager through departmental leadership, including the Police Department.

The Council introduced Ordinance No. 1584 at its April 1, 2026, regular meeting with a unanimous vote. If adopted on April 15, 2026, this ordinance will take effect on May 15, 2026.

BACKGROUND:

The Public Safety Committee was established to provide a forum for discussion and review of public safety matters and to make recommendations to the City Council.

In recent years, interest and participation in the Public Safety Committee has declined. Despite efforts to recruit members, including advertising vacancies and conducting outreach, several positions have remained unfilled for extended periods. As a result, the Public Safety Committee has

experienced ongoing challenges maintaining full membership, achieving quorum, and sustaining continuity in its work.

During the same period, public safety issues have increasingly been addressed through regular City Council meetings, study sessions, strategic planning processes, and ongoing coordination among the Police Department, City Manager, and senior City staff, as well as through community engagement efforts. These established channels provide consistent opportunities for public input, interdepartmental coordination, and policy development.

DISCUSSION:

The Council should consider public comments and then introduce the ordinance and continue the matter to their next meeting for adoption.

If adopted, the Public Safety Committee will be dissolved and future public safety policy discussion, program review, and strategic planning will occur through regular and special meetings of the City Council, as well as ongoing coordination among the Police Department, City Manager, and senior City staff. This approach:
• Addresses ongoing vacancies and declining participation that have limited the Committee’s effectiveness;
• Reflects the City’s current model of public safety engagement through Council meetings, staff coordination, and community interaction;
• Reduces administrative workload related to meeting preparation, staffing, and coordination; and
• Ensures that policy direction is established by the City Council and implemented through the City Manager in coordination with the Police Department.

POLICY IMPLICATIONS:

Repeal of the Public Safety Committee represents a structural change to how public safety policy matters are reviewed and considered. Public safety issues, strategic priorities, and program direction will be addressed through City Council meetings and through ongoing coordination among the Police Department, City Manager, and senior City staff, rather than through a standing advisory committee.

This approach reflects current practice, in which public safety matters are informed by public input received at Council meetings, engagement between staff and community members, and coordination across City departments. It reinforces the Council’s role in setting policy direction in public meetings and the City Manager’s role in implementing that direction through departmental leadership.

This action does not change the City’s operational public safety services, policies, or service levels.

It modifies only the advisory structure through which policy discussions are conducted.

ENVIRONMENTAL REVIEW (CEQA):

This ordinance makes administrative amendments to the Arcata Municipal Code that will not cause a physical change to the environment. Consequently, it can be seen with certainty that there is no possibility that enactment of this ordinance will have a significant impact on the environment and this action is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3), common sense exemption.

BUDGET/FISCAL IMPACT:

None. Repeal of the Committee may result in minor administrative savings related to staff time and meeting support.

RECOMMENDED COUNCIL ACTION:

Motion to adopt Ordinance No. 1584, An Ordinance of the City Council of the City of Arcata Repealing Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration), of the Arcata Municipal Code; waive reading of the text and consent to read by title only. Consent Calendar vote.

ATTACHMENTS:

A. Ordinance 1584 Public Safety Committee Repeal (DOCX)

ORDINANCE NO. 1584

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCATA
REPEALING ARTICLE 12 (PUBLIC SAFETY COMMITTEE) IN CHAPTER 3 (BOARDS,

COMMISSIONS, COMMITTEES AND TASK FORCES) OF TITLE II (ADMINISTRATION),

OF THE ARCATA MUNICIPAL CODE
WHEREAS, the Public Safety Committee was established to provide a forum for discussion of public safety issues and to make recommendations to the City Council; and WHEREAS, in recent years interest and participation in the Public Safety Committee has declined, and despite recruitment efforts including advertising vacancies and conducting outreach, several positions have remained unfilled for extended periods; and WHEREAS, these ongoing vacancies have made it difficult to maintain full membership, achieve quorum, and sustain continuity in the Public Safety Committee’s work; and WHEREAS, public safety matters are regularly addressed directly by the full City Council through regular meetings, study sessions, strategic planning processes, and community engagement; and
WHEREAS, the City Council finds that the advisory functions of the Public Safety Committee can be effectively performed through existing processes and that repeal of the Public Safety Committee will streamline the City’s advisory structure while maintaining transparency and opportunities for public participation.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCATA DOES ORDAIN AS FOLLOWS:

Section 1: Article 12 (Public Safety Committee) in Chapter 3 (Boards, Commissions, Committees and Task Forces) of Title II (Administration) is hereby repealed and reserved for future use.

Section 2: Severability. If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of the ordinance. The City Council hereby declares that it would have adopted the ordinance, and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses or phrases be declared invalid.

Section 3: California Environmental Quality Act (CEQA). This ordinance makes administrative amendments to the Arcata Municipal Code that will not cause a physical change to the environment. Consequently, it can be seen with certainty that there is no possibility that enactment of this ordinance will have a significant impact on the environment and this action is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3), common sense

exemption.

Section 4: Limitation of Actions. Any action to challenge the validity or legality of any provision of this ordinance on any grounds shall be brought by court action commenced within thirty (30) days of the date of adoption of this ordinance.

Section 5: Effective Date. This ordinance shall become effective thirty (30) days from and after its final passage, provided it is published pursuant to Government Code section 36933 in a newspaper of general circulation within fifteen (15) days after its adoption.

DATED:

ATTEST: APPROVED:

City Clerk, City of Arcata Mayor, City of Arcata
CLERK’S CERTIFICATE
I hereby certify that the foregoing is a true and correct copy of Ordinance No. 1584, passed and adopted at a regular meeting of the City Council of the City of Arcata, Humboldt County, California, held on the ___day of _________, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

City Clerk, City of Arcata

STAFF REPORT – CITY COUNCIL MEETING
TO: Honorable Mayor and City Council Members
FROM: Emily Sinkhorn, Director of Environmental Services PREPARER: Doug Culbert, Deputy Director of Environmental Services – Streets/Utilities DATE: April 15, 2026
TITLE: Approve the Purchase of Submersible Pumps and Controls from Xylem Water Solutions USA, Inc., in the Amount of $413,175.36; and Approve Necessary and Associated Related Actions.

RECOMMENDATION:

It is recommended that the Council:
1) Approve the purchase of submersible pumps and controls from Xylem Water Solutions USA, Inc., in the amount of $413,175.36, including freight and sales tax; 2) Authorize City Engineer to increase the purchasing amount by up to 10% (for total not to exceed $454,492.90) to allow for any unforeseen contingencies; and 3) Authorize the City Manager to execute all applicable documents.

BACKGROUND:

The First Street Lift Station Improvement Project includes upgrades to critical wastewater infrastructure, including submersible pumps and associated control systems that must integrate with the City’s existing wastewater system. The City has established standard equipment types and manufacturers for lift station operations based on long-term operational experience, maintenance practices, and compatibility with existing SCADA and control systems. Xylem Water Solutions equipment, including Flygt pumps and controls, is currently used throughout the City’s wastewater system and is supported by existing operator familiarity, maintenance procedures, and spare parts inventory.

Early procurement of this equipment will allow the City to secure production scheduling, reduce the risk of delays, and provide the awarded contractor with owner-furnished equipment that is consistent with the project design and existing City systems. Based on these factors, staff is recommending the purchase of Xylem Water Solutions pumps and controls to maintain system compatibility, operational efficiency, and project schedule.

DISCUSSION:

The First Street Lift Station Improvement Project is a high priority project under the City’s Capital Improvement Program and is critical to improving system reliability and reducing the risk of sanitary sewer overflows. The project includes replacement of aging infrastructure with modern submersible pump systems and associated controls to improve performance, efficiency, and operational reliability. These improvements need to be constructed in 2026, before the next winter rains, as the

First Street Lift Station is critical for moving wastewater through the sewer system during large rain events and its current equipment is outdated and unreliable.

To support the project schedule and reduce construction risk, staff are recommending the prepurchase of equipment with long lead times for delivery. Procuring equipment in advance of the formal construction contractor bidding process helps avoid delays associated with manufacturing lead times, secures production scheduling, and can reduce overall project costs by limiting contractor markups and minimizing schedule-related impacts.

The City has established standards for equipment used throughout its wastewater system, including pumps, controls, valves, and related components. These standards are based on long-term operational experience, maintenance practices, availability of replacement parts, and compatibility with the City’s existing SCADA and control systems. Xylem Water Solutions (Flygt) pump and control systems are currently in use at multiple City facilities and have proven to be reliable and well-supported by both operations staff and vendor service.

Maintaining consistency with these established standards ensures compatibility with existing system operations and provides several benefits, including the following:
 Ensures compatibility with existing SCADA, controls, and system operations  Maintains consistency with equipment currently used by operations staff  Reduces training requirements and operational complexity  Allows use of existing spare parts inventory
 Improves long-term maintenance efficiency and reliability Deviation from these established standards would require additional operator training, expansion of spare parts inventory, and potential modifications to existing SCADA integration.

Based on these factors, staff recommend the purchase of submersible pumps and controls directly from Xylem Water Solutions. This approach supports system standardization, reduces operational risk, and ensures timely delivery of critical equipment necessary to maintain the project schedule.

ENVIRONMENTAL REVIEW (CEQA):

Environmental review for the First Street Lift Station Improvement Project will be completed prior to construction. It is anticipated that the project will qualify for a categorical exemption pursuant to CEQA Guidelines Sections 15301 (Existing Facilities) and 15302 (Replacement or Reconstruction).

BUDGET/FISCAL IMPACT:

Funding for these purchases is included within the approved Capital Improvement Program budget for the First Street Lift Station Improvement Project in the Wastewater Fund. Early procurement of long lead items is necessary to maintain the project schedule and is not expected to increase overall project cost.

Account Number Amount Account Name
662-70-67-57604 $413,175.36 Wastewater Fund
RECOMMENDED COUNCIL ACTION:

Motion to approve purchase of pumps and controls from Xylem Water Solutions USA, Inc., in the amount of $413,175.36, including freight and sales tax; authorize the City Engineer to increase the purchasing amount by up to 10% (for a total not to exceed $454,492.90) to allow for any unforeseen contingencies; and authorize the City Manager to execute all applicable documents. Consent Calendar vote.

ATTACHMENTS:

A. Xylem Water Solutions USA, Inc. Quote

January 7, 2026
All bidding contractors
Quote # 2025-FFB-0403
Project Name: North Point
Job Name: City of Arcata
Xylem Water Solutions USA, Inc. is pleased to provide a quote for the following Flygt equipment.

A Flygt Preventive Maintenance Contract is available for this order. Please contact your Xylem Service Center for more information.
3171
Qty Description Unit Price
1 3171.095-0373
Flygt Model NP-3171.095 10" volute Submersible pump equipped with a 460 Volt / 3 phase / 60 Hz 25 HP 1150 RPM motor, 613 impeller, 1 x 65 Ft. length of SUBCAB S3x10+3x10/3+S(4x0,5) submersible cable, FLS leakage detector, volute is prepared for Flush Valve
$ 50,213.00
3171 Price $ 50,213.00
3171 Accessories
Qty Description Unit Price
1 604 59 05
CONNECTION,DISCH 10X10" CI
$ 8,164.00
1 14-58 91 06

HOOK,SAFETY ASSEMBLY SS
$ 218.00
1 14-59 00 00
KIT,HARDWARE 3/8IN SS (2X)
$ 102.00
40 14-48 71 17
CHAIN 5/16" 316SS SWL2750#
$ 28.00
1 14-58 72 09
KIT,CHAIN FITTING 316SS+ FLYGT SWL1250#
$ 102.00
2 582 88 04
SENSOR,ENM-10 0.95-1.1 65'
$ 678.00
1 84 62 33
SENSOR,LEVEL LTU801 0-5M 30M
$ 2,992.00
1 14-48 94 00
HOLDER,CABLE HEAVY DUTY 316SS
$ 259.00
1 83 57 25
GRIP,CABLE SS 25-36MM
$ 126.00
1 14-58 42 53
BRACKET,INT GB 2 X 10" 316SS+ FOR CI/DI PIPE
$ 722.00
Xylem Water Solutions USA, Inc.

Flygt Products
790-A Chadbourne Rd
Fairfield, CA 94534
Tel (707) 422-9894
Fax (707) 422-9808

Qty Description Unit Price
50 14-49 01 03
TS3162 FEET 2"GUIDE RAIL 316SS
$ 81.00
3171 Accessories Price $ 19,211.00
3202s
Qty Description Unit Price
2 3202.095-0902
Flygt Model NP-3202.095 12" volute Submersible pump equipped with a 460 Volt / 3 phase / 60 Hz 35 HP 1150 RPM motor, 618 impeller, 1 x 65 Ft. length of SUBCAB S3x16+3x16/3+S(4x0,5) submersible cable, FLS leakage detector, volute is prepared for Flush Valve
$ 63,650.00
3202s Price $ 127,300.00
3202 Accessories
Qty Description Unit Price
100 14-49 01 01
TS3163 FEET 3"GUIDE RAIL 316SS
$ 155.00
2 604 61 05
CONNECTION,DISCH 12X12" CI
$ 13,809.00
4 255 47 01

SLEEVE,NBR
$ 39.00
2 14-58 91 06

HOOK,SAFETY ASSEMBLY SS
$ 218.00
2 14-59 00 00
KIT,HARDWARE 3/8IN SS (2X)
$ 102.00
60 14-48 71 18
CHAIN 1/2" 316SS SWL7350#
$ 59.00
2 14-58 72 10
KIT,CHAIN FITTING 316SS+ FLYGT SWL 2500#
$ 1,218.00
2 582 88 04
SENSOR,ENM-10 0.95-1.1 65'
$ 678.00
2 83 57 25
GRIP,CABLE SS 25-36MM
$ 126.00
2 14-58 44 80
BRACKET,INT GB 3 X 12" 316SS+ FOR CI/DI PIPE 3170,3201,3300 $ 1,240.00
3202 Accessories Price $ 53,978.00
Budgetary pump control panel
Qty Description Unit Price
1 Triplex Control Panel
72''X72''X18" Enclosure 4XStainless
$ 83,076.92
Budgetary pump control panel Price $ 83,076.92
Nexicon Controller
Qty Description Unit Price

Qty Description Unit Price
1 14-40 02 55
KIT,SURGE PROTECTION 460V+ STRIKESORB
$ 1,040.00
2 848 42 00
BACKPLANE XBP 251 NEXICON
$ 330.00
1 848 43 00
MODULE,BACKPLANE SUPPLY+ XBS 251 NEXICON
$ 699.00
1 848 21 00
MANAGER,APPLICATION XAM 912+ NEXICON
$ 1,499.00
1 848 40 00
MODULE,I/O DIGITAL XDC 411+ NEXICON
$ 408.00
3 870 71 00

MODULE,REDUNDANCY
$ 350.00
3 848 24 00
MODULE,VFD FPM 611 NEXICON
$ 699.00
1 873 79 00
HMI,OPERATOR T-80 10"
$ 2,274.00
Nexicon Controller Price $ 9,727.00
Recommended Services
Qty Description Unit Price
2 14-69 00 09A
START UP,FLYGT,NO TAX 1-TP MODELS: 3000,7000,8000
$ 1,705.00
1 14-69 99 76C
FLYGT SUBMITTAL SUPPLY-NO TAX+ MILESTONE
$ 1,000.00
16 14-69 97 61U
AUTOMATION AND CONTROLS FIELD+ SPECIALIST SUPPORT PER
HOUR
$ 260.00
1 14-69 97 61R
M&C SERVICE - PER DIEM + RENTAL CAR,FUEL,MEALS,HOTEL
$ 443.00
2 Anchor Bolt Ca
Seismic Calcs
$ 1,461.54
3 14-69 94 92
TEST FAL 2.2 3171-3301 <67HP + HI GRADE 1 FAL 15-900006 $ 2,097.00
Recommended Services Price $ 18,227.08
Total Price $ 361,733.00
Freight Charge $ 16,233.00
Total Price $ 377,966.00
Terms & Conditions
This order is subject to the Standard Terms and Conditions of Sale – Xylem Americas effective on the date the order is accepted which terms are available at http://www.xyleminc.com/en-us/Pages/termsconditions-of-sale.aspx and incorporated herein by reference and made a part of the agreement between the parties.

Purchase Orders: Please make purchase orders out to: Xylem Water Solutions USA, Inc.

Freight Terms: 3 DAP - Delivered At Place 08 - Jobsite (per IncoTerms 2020) See Freight Payment (Delivery Terms) below.

Taxes: State, local and other applicable taxes are not included in this quotation.

Back Charges: Buyer shall not make purchases nor shall Buyer incur any labor that would result in a back charge to Seller without prior written consent of an authorized employee of Seller.

Tariff Changes: The prices quoted herein are based on the current tariff rates, duties, government charges, and trade regulations as of the date of this quote. If any new tariffs, duties, taxes, or similar charges are imposed, or any existing tariffs, duties, or charges are increased or modified by any government or regulatory authority (collectively, "Tariff Changes"), and such Tariff Changes result in an increase in the cost of goods, Xylem reserves the right to adjust the pricing of the affected goods to reflect the increased costs.

Shortages: Xylem will not be responsible for apparent shipment shortages or damages incurred in shipment that are not reported within two weeks from delivery to the jobsite. Damages should be noted on the receiving slip and the truck driver advised of the damages. Please contact our office as soon as possible to report damages or shortages so that replacement items can be shipped and the appropriate claims made.

Terms of Payment: 100% N30 after invoice date.

Xylem’s payment shall not be dependent upon Purchaser being paid by any third party unless Owner denies payment due to reasons solely attributable to items related to the equipment being provided by FLYGT.

Terms of Delivery: PP/Add Order Position
Validity: This Quote is valid for thirty (30) days.

Please note that this pricing is valid for 30 days and contingent upon final approval of submittals and release to fabrication by (within 90 days of bid date).

This quotation is subject to change if any changes to the specifications or plans are made that alter the scope of supply.

Schedule: Please consult your local Flygt Branch Office to get fabrication and delivery lead times.

Thank you for the opportunity to provide this quotation. Please contact us if there are any questions.

Sincerely,
As of October 14th, 2024, all orders must meet a minimum dollar value of $1,200.

Xylem reserves the right to refuse to process any order that does not meet the minimum order value requirement. Xylem will support order adjustments to meet the minimum order value threshold.

Zack Cederlind Mariah Rowe
Sales Representative Customer Experience Specialist
Cell: 916-279-1661 Cell: 707-914-5280
[email protected] [email protected]

Customer Acceptance
This order is subject to the Standard Terms and Conditions of Sale – Xylem Americas effective on the date the order is accepted which terms are available at http://www.xyleminc.com/en-us/Pages/termsconditions-of-sale.aspx and incorporated herein by reference and made a part of the agreement between the parties.

A signed copy of this Quote is acceptable as a binding contract.

Purchase Orders: Please make purchase orders out to: Xylem Water Solutions USA, Inc.

Quote #: 2025-FFB-0403
Customer Name: All bidding contractors
Job Name: City of Arcata
Total Amount: $ 361,733.00
(excluding freight)
Signature: _______________________________ Name:_______________________________________ (PLEASE PRINT)
Company/Utility:___________________________ PO:_________________________________________ Address:_________________________________ Date:________________________________________ ________________________________________ Phone:_______________________________________ ________________________________________ Email:_______________________________________ ________________________________________ Fax:_________________________________________ Xylem Water Solutions USA, Inc.

Flygt Products

STAFF REPORT – CITY COUNCIL MEETING
TO: Honorable Mayor and City Council Members
FROM: Tabatha Miller, Assistant City Manager
PREPARER: Tabatha Miller, Assistant City Manager
DATE: April 15, 2026
TITLE: Conduct a Public Hearing and Consider Resolution No. 256-52 Adopting Water and Wastewater Rate Adjustments for FY 2025-26 through 2029-30 and Finding that Adoption of the Rates is Exempt from the California Environmental Quality Act (CEQA).

RECOMMENDATION:

It is recommended that the Council:
1) Open the Public Hearing.
2) Receive a staff report and review questions with staff. 3) Open public comment.
4) Close public comment.
5) Direct the City Clerk to tabulate the results of the protests received from property owners and announce the findings.
6) Close the Public Hearing.
7) Consider making a motion to:
a. Adopt Resolution No. 256-52 establishing water and wastewater rate adjustments for FY 2025-26 through 2029-30.
b. Authorize the City Manager, Assistant City Manager/Finance Director and Environmental Services Director to implement the rates, update the Master Schedule of Fees and Charges, make non-substantive corrections to the exhibits, and complete all billing system updates.
c. Find that adoption of the water and wastewater rates is exempt from the California Environmental Quality Act (CEQA).

INTRODUCTION:

The City provides essential water and wastewater services to residents, businesses and other organizations in city limits and to select addresses outside of city limits. The City’s Water and Wastewater utilities operate as self-sustaining enterprises. All expenses related to operations, maintenance, capital improvements and reserve funding are supported entirely through user rates, independent of the City’s General Fund. On March 5, 2025, the City Council approved a contract with Bartle Wells Associates for a water and wastewater rates study. On October 15, 2025, the City Council received an initial report on the results of that study.

February 5, 2026, the City Council authorized staff to initiate the Proposition 218 (Prop 218) process for adjustments to the City’s of Arcata’s Water and Wastewater rates. In addition to mailing the

Prop 218 notice to all affected property owners, tenants who are responsible for payment their utility bills received notices at least 45 days prior to the public hearing. These notices were mailed on or before February 19, 2026. City Council set the public hearing for possible adoption of the water and wastewater rate adjustments for April 15, 2026.

BACKGROUND:

In 1996, California voters adopted Proposition 218, which amended the California Constitution to establish a process that public agencies must follow when imposing new or increasing property related fees. In 2007, the California Supreme Court ruled that water service fees are property related fees, thus subject to Proposition 218 requirements. Proposition 218 mandates that any property related fee imposed by a public agency cannot exceed the cost of providing that service by imposing certain restrictions on the rate and fee amounts to be charged, and limits what costs can be funded by the revenue generated by the proposed rates and fees.

To comply with Proposition 218 the City noticed the public hearing on the proposed rate adjustments by mail to all affected property owners and water and/or wastewater account holders.

The notice included the proposed rate and fee amounts, how the rates and fees were calculated, the reason for the fees and the date, time and location of the public hearing – April 15, 2026. The notice also informed affected property owners and ratepayers that the rate increase is subject to a majority protest.

Protests must be received by the City Clerk before the closure of the public hearing on April 15, 2026. Just prior to the conclusion of the public hearing, the City Clerk will announce whether a majority protest exists. If a majority protest exists (50%+1), the City cannot proceed with the proposed changes. If a majority protest does not exist, the City Council has the authority to adopt the proposed rates, which would go into effect on May 1, 2026, for water changes and July 1, 2026, for wastewater changes. A majority of the City’s current 5,040 parcels is 2,520 plus one.

As of April 6, 2026, the City had received 53 communications opposing the rate increases. Of those communications, 37 were received prior to initiating the Proposition 218 process and selecting the phased in water rate increases (scenario 2), and 16 protests after the Proposition 218 process was initiated and the notices were mailed.

The results of the Bartle Wells rate study and proposed rate structure are the foundation for water and wastewater rates for the next five years. That foundation is built to comply with Proposition 218 and all other legal requirements. The utility rates are based entirely on the cost of operating and maintaining the City’s water and wastewater facilities and services. Each utility is operated as an independent enterprise and all expenses and revenues for each service are accounted for in separate funds. State law requires that all fees collected by each utility be used within that utility and are not allowed to be used for unrelated services.

The City last conducted an in-depth water and wastewater cost of service rate study in 2020, which was approved and implemented by the City Council on July 1, 2020. Annual Master Fee Schedule Resolutions established rates from FY 2021 to FY 2025 based on that cost-of-service rate study.

The last rate increase for water and wastewater was implemented July 1, 2024, (approved through a Proposition 218 process initiated in 2020). In late summer of 2024, as staff reviewed the financial status of the Water Enterprise Fund and began preparing to bid the Steel Line Replacement Project, the shortfall and potential long-term insolvency of the Water Fund was apparent. Staff sought additional funding for the project, including applying for low-interest State Rolving Fund (SRF) loans and other potential grant opportunities, but were unsuccessful because water fund projections do not support future debt service payments. Staff determined that a water rate study was needed for long-term financial planning.

While there wasn’t the same immediate need for a rate study of the Wastewater Enterprise Fund, the process provided an opportunity to update the financial plans for that utility fund and allow the rate structure of both utilities to be considered together in order to minimize the combined impact of the water and wastewater rate structure. Most City utility customers receive a combined water and wastewater bill and focus on the total cost of the two services in managing their budgets.

DISCUSSION:

Table 1 – Proposed Water/Wastewater Rate Percent Increases (FY 2026-FY 2030) RATE

SCENARIOS
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Water 23% 18% 12% 10% 10%
Wastewater 0% 0% 5.0% 5.0% 5.0%
Water Financial Overview
The need for significant Capital Improvement Program (CIP) projects to replace infrastructure that has exceeded its useful life is a primary driver in the need to increase water rates. The City has identified critical CIP needs of $36 million over the next five years. The financial plan in the Bartle Wells Rate Study assumes that the majority of project costs will be financed by issuing new debt and the recommended rate increases ensure that the City meets the new debt servicing requirements.

Issuing debt spreads the cost of the large and expensive infrastructure projects over thirty years, which in most cases is less than the expected useful life of those assets. The financial projections also include ongoing inflation costs of four (4) percent annually.

The current fiscal health of the water fund is also driving the need for the proposed large upfront rate increases. As discussed in prior agenda items, current reserves are not sufficient to fund the current CIP waterline replacement project. The Council approved a $3.5 million loan from the Wastewater Fund to the Water Fund on April 2, 2025, in order to allow that project to proceed with the understanding that a future rate increase would be necessary to repay that loan. In addition to repaying the loan, a rate increase is necessary to establish adequate cash reserves and to meet the debt service coverage ratios needed to issue future debt.

Wastewater Financial Overview
The Wastewater Fund is in good financial health. Wastewater rates increased from FY 2021-2025 anticipating significant capital needs, with the Wastewater Treatment Plant Upgrade the primary concern. The City was able to secure grant funding through state and federal programs, that reimbursed most of the costs for that project estimated at completion to be approximately $67 million. Without those grant funds, current wastewater rates would be much higher.

The City has identified that $51.4 million is needed to fund critical wastewater CIP projects over the next five years. Like the water fund, issuance of future debt will help limit rate increases, but unlike the water fund the rate increases can be delayed until the third year of the rate study period, in part because the Wastewater CIP projects are partially funded by $26.5 million in secured grants. This will help offset the more significant increases in the first two years from water rate increase for the vast majority of City utility customers, who receive both water and wastewater services from the City of Arcata.

Impact to Ratepayers
As part of the City Council’s consideration of proposed water rate adjustments, staff have prepared information to clarify how the proposed changes would affect utility customers. Most customers

receive a single bill that includes both water and wastewater services. On average, water charges account for approximately 35 percent of the total bill, while wastewater charges account for the remaining 65 percent.

The proposed water increase provides for a 23% overall water rate increase on May 1, 2026. Please note that the proposed increase is an average for all rate changes, but the individual rate categories may vary from the average. Likewise, individual customers’ bills may vary from the average.

Although there are no proposed overall wastewater rate revenue increases until July 1, 2028, there are changes to rate categories. For example, in the first year of implementation, the wastewater portion of the combined water/wastewater bill for an average single-family residence is projected to decrease by 4.2 percent. The net result for the average single-family residence is an increase of 3.6 percent.

The decrease in the average single-family residence rate is the result of two proposed changes to this category. The first change removes the 4 hundred cubic feet (HCF) usage cap included in the base rate and instead establishes a monthly flat sewer fee. This change will make sewer charges more predictable and eliminate monthly fluctuations tied to seasonal water use or inconsistent meter readings. It is also consistent with the fixed costs associated with providing residential wastewater services. However, it may increase costs for ratepayers with below-average usage.

The second change adds a new category for multi-family units served by a single meter. Rather than treating these accounts as a single-family residence—with one base charge and usage charges above the 4 HCF cap—these properties will be charged a lower per-unit flat fee, eliminating usage-based charges. For some multi-family properties, this may result in higher wastewater fees, but it corrects an inequity in how these fees have historically been charged.

Over the five years covered by the current water and wastewater rate study, the water/wastewater combined bills for the average single-family residence will increase by a total of 39 percent or $54.

Staff also evaluated Arcata’s current water rates in comparison to similar-sized communities in Northwest California. At present, Arcata’s average monthly water charge for a single-family home is $47.98, which is approximately $8 lower than the regional average and approximately $11 lower than the regional median charge. This comparative analysis indicates that Arcata’s water rates remain relatively low within the regional context, prior to consideration of the proposed adjustments.

ENVIRONMENTAL REVIEW (CEQA):

Public Resource Code Section 21080(b)(8) of the California Environmental Quality Act (CEQA) and CEQA Guidelines Section 15273 provide that CEQA does not apply to the establishment, modification, structuring, or approval of rates, tolls, fares and other charges by public agencies which the public agency find are for the purpose of 1) meeting operating expenses, including employee wage rates and fringe benefits; 2) purchasing or leasing supplies, equipment or materials; 3) meeting financial reserve needs and requirements; and 4) obtaining funds for capital projects necessary to maintain current service levels.

BUDGET/FISCAL IMPACT:

The projected budget/fiscal impact is detailed in the attached Water and Wastewater Rate Study.

The proposed rates provide for sufficient revenue to enable the City to maintain the City’s water and wastewater utilities, provide sufficient reserves and support future debt service.

The proposed rates as set forth in the Proposition 218 Notice are the maximum allowable amount that the City Council can approve for the next five-year rate term. The Council always has the flexibility to implement rate adjustments that are less than those adopted pursuant to Proposition

218, although future rates cannot exceed the adopted increases without going through the Proposition 218 process.

RECOMMENDED COUNCIL ACTION:
1) Open the Public Hearing.
2) Receive a staff report and review questions with staff. 3) Open public comment.
4) Close public comment.
5) Direct the City Clerk to tabulate the results of the protests received from property owners and announce the findings.
6) Close the Public Hearing.
7) Motion to:
a. Adopt Resolution No. 256-52 establishing water and wastewater rate adjustments for FY 2025-26 through 2029-30.
b. Authorize the City Manager, Assistant City Manager/Finance Director and Environmental Services Director to implement the rates, update the Master Schedule of Fees and Charges, make non-substantive corrections to the exhibits, and complete all billing system updates.
c. Find that adoption of the water and wastewater rates is exempt from the California Environmental Quality Act (CEQA).

ATTACHMENTS:

A. Resolution No. 256-52, Adopting Water and Wastewater Rates through FY 2030 B. Resolution No. 256-52 Exhibit A
C. BWA City of Arcata Water and Wastewater Rate Study, January 28, 2026 D. Proposition 218 Notice of Public Hearing on Proposed Water and Wastewater Rate Increases E. City Presentation Water and Wastewater Rate Increases 2.4.2026 F. BWA Presentation Arcata WWW Rate Study 2.4.2026

RESOLUTION NO. 256-52

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCATA ADOPTING CITY WATER RATES TO BE EFFECTIVE MAY 1, 2026, THROUGH FISCAL YEAR 2029-30 AND WASTEWATER RATES
TO BE EFFECTIVE JULY 1, 2026, THROUGH FISCAL YEAR 2029-30 WHEREAS, the City of Arcata (the “City”) provides essential services to residents and businesses, including water and wastewater. The Environmental Services Department is responsible for maintaining and upgrading critical infrastructure to ensure the delivery of safe and reliable services to the community; and
WHEREAS, operation, maintenance and renewal of the City’s water and wastewater systems is entirely funded by the City’s Water and Wastewater Enterprise Funds. The water and wastewater utilities are financially operated as self-supporting enterprises relying primarily on revenues from water and wastewater rates to fund the cost of providing service and maintaining the systems, with grant funding sought, when available; and
WHEREAS, the City last conducted a cost-of-service rate study in 2020, which was approved by City Council on July 1, 2020, and implemented through the City’s annual Master Fee Schedule from FY 2021 to FY 2025. The last increase occurred on July 1, 2024; and WHEREAS, on March 5, 2025, the City Council approved a contract with Bartle Wells Associates to conduct a water and wastewater rates study that developed ten-year financial projections for the water and wastewater funds, analyzed the City’s current water and wastewater rates and structure, and recommended increases to the rates for the next five years; and WHEREAS, on October 15, 2025, the City Council received a presentation from a consultant with Bartle Wells Associates on the results of the City of Arcata Water and Wastewater Rate Study that determined the total costs of providing water and wastewater services to the City’s customers and calculated the proposed water and wastewater services rates to be charged to each customer class based on their proportionate impact to the water and wastewater service system (the Rate Study is incorporated herein by reference); and
WHEREAS, the presentation on October 15, 2025 of the Rate Study found: a) current water and wastewater services rates are insufficient to support the increasing costs of operation, maintenance and replacement of the City’s water and wastewater systems, b) additional revenue is needed to cover the total costs of City water and wastewater services, c) an increase in water service rates to be paid by City customers is needed and recommended to be implemented for the remainder of fiscal year 2026 along with annual adjustments through January 1, 2030, and d) adjustments to wastewater service rates to proportionally charge the cost of service to each customer class are necessary and recommended to be implemented at the start of the fiscal year 2027, along with increases in wastewater service rates to be paid by customers and recommended to be implemented annually starting July 1, 2028, with annual adjustments until July 1, 2030; and

WHEREAS, as incorporated into the Rate Study, the City is required by state regulations to maintain the integrity of its water treatment and distribution systems and its wastewater collection and treatment system. The City’s Capital Improvement Plan (CIP) includes numerous projects over the next ten years for rehabilitation, replacement and improvement of the City’s water and wastewater utility systems. Near-term cost for the next five years with a 4% construction cost inflation factor includes approximately $36 million of water system improvements and $51.4 million of wastewater system improvements; and
WHEREAS, the Rate Study, along with supporting notices and documents has been made available to the public (online and in paper form since October 15, 2025); and WHEREAS, the Rate Study recommends rate adjustments to achieve several objectives, including:
 Adequate revenues to meet the water and wastewater utilities’ ongoing service and financial obligations that will keep up with inflation;  Adequate revenues to support the needs of the utilities’ CIP; and  Changes to the wastewater service rates to proportionally charge the cost of service to each customer class.

WHEREAS, pursuant to California Constitution Article XIII D, section 6 (a.k.a., Proposition 218), prior to extending, imposing or increasing water or wastewater rates for a property-related service, the City must provide property owners notice at least 45 days before a public hearing regarding modifications to the water and wastewater rates. The notice must contain an explanation of : 1) the amount of the proposed rates, 2) the basis on which the rates are calculated, 3) the reason for the rate modifications, 4) the date, time and place of a public hearing to consider the rate modifications, and 5) the rights of property owners and tenants responsible for the utility charges to submit written protests to the rate modifications. The proposed rate modifications may not be imposed if, prior to the close of the public hearing, written protests are submitted by the property owners or tenants representing a majority of the properties subject to the modified rates (“majority protest”); and
WHEREAS, at the February 4, 2026, City Council meeting, the City Council directed staff to mail the required notice of public hearing to be held on April 15, 2026, to consider the adoption of the recommended increased and adjusted water and wastewater service rates: and WHEREAS, notice of the public hearing to consider proposed adjustments to the water and wastewater rates was mailed at least 45 days prior to the scheduled public hearing as required by state law (California Constitution Article XIII D, section 6) and that notice identified deadline of April 15, 2026, prior to the close of the public hearing for property owners or tenants to submit a written objection.; and
WHEREAS, on February 25, 2026, at 5:30 p.m. at the D Street Neighborhood Center, 1301 D Street, Arcata CA, the City hosted a public workshop for residents and businesses to come and learn more about the capital improvement plans and how rates were developed for the water and wastewater utilities with staff and the City’s rate consultant from Bartle Wells Associates present; and

WHEREAS, on April 15, 2026, the City Council held a duly noticed public hearing on the water and wastewater service rates identified in this Resolution, and considered the Rate Study, the agenda report and supporting documents presented by City Staff, and any public comments received prior to that hearing and all information and public comments related to this matter as presented at that hearing (specifically including any written objections or written protests against the proposed water and wastewater service rates); and
WHEREAS, prior to closing the public hearing the City Council considered any written objections and determined that no clarification or reduction to the proposed water and wastewater rates were warranted; and
WHEREAS, at the time of closing the public hearing for City Council’s consideration of this Resolution on April 15, 2026, the City had not received written protests from a majority of the properties subject to the water and wastewater service rates, and therefore, a majority protest to the proposed increase in water and wastewater rates described in the Resolution does not exist.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arcata that effective May 1, 2026, the water service rates set forth in Exhibit A are hereby approved and will be incorporated into each year’s annual Master Fee Schedule, as adopted by City Council.

BE IT FURTHER RESOLVED by the City Council of the City of Arcata that effective July 1, 2026, the wastewater service rates set forth in Exhibit A are hereby approved and will be incorporated into each year’s annual Master Fee Schedule, as adopted by City Council.

BE IT FURTHER RESOLVED that the City Council hereby finds all of the above recitals are true and correct and incorporated by reference.

BE IT FURTHER RESOLVED that the City Council hereby finds that the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) Public Resource Code Section 21080(b)(8) of the California Environmental Quality Act (CEQA) and CEQA Guidelines Section 15273 provide that CEQA does not apply to the establishment, modification, structuring, or approval of rates, tolls, fares and other charges by public agencies which the public agency find are for the purpose of 1) meeting operating expenses, including employee wage rates and fringe benefits; 2) purchasing or leasing supplies, equipment or materials; 3) meeting financial reserve needs and requirements; and 4) obtaining funds for capital projects necessary to maintain current service levels.

This Resolution shall take effect upon its adoption by this City Council.

DATED:

ATTEST: APPROVED:

___________________________ __________________________
City Clerk, City of Arcata Mayor, City of Arcata

CLERK'S CERTIFICATE
I hereby certify that the foregoing is a true and correct copy of Resolution No. 256-52, passed and adopted at a regular meeting of the City Council of the City of Arcata, Humboldt County, California, held on the 15th day of April, 2026 by the following vote:

AYES:

NOES:

ABSENT:

ABSTENTIONS:
___________________________
City Clerk, City of Arcata

RESOLUTION 256-52
Exhibit A
Proposed Water and Wastewater Rates
Water Rates
2025/26
Current
Effective
5/1/2026
Effective
1/1/2027
Effective
1/1/2028
Effective
1/1/2029
Effective
1/1/2030
Rate Revenue Increase
%

23.0% 18.0% 12.0% 10.0% 10.0%
Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use All Water Use $7.15 $8.83 $10.42 $11.67 $12.83 $14.12
Fixed Monthly Rates by Meter Size ($ / meter / month)
Meter Size
5/8” and 3/4" $12.23 $15.42 $18.19 $20.37 $22.41 $24.65 1” 20.43 25.74 30.38 34.02 37.42 41.17
1 ½” 40.73 51.33 60.57 67.84 74.63 82.09
2” 65.19 82.16 96.95 108.59 119.45 131.39
3” 122.31 154.15 181.90 203.73 224.10 246.51
4” 203.89 256.97 303.23 339.61 373.58 410.93
6” 407.65 513.79 606.27 679.03 746.93 821.62
8” 652.27 822.10 970.07 1,086.48 1,195.13 1,314.64
10” 937.74 1,181.89 1,394.63 1,561.98 1,718.18 1,890.00 Note: Outside City customers are currently charged 1.5 times the monthly fixed charge. Going forward, Outside City customers will pay the same as Inside City Customers.

Wastewater User Current
Effective
7/1/2026
Effective
7/1/2027
Effective
7/1/2028
Effective
7/1/2029
Effective
7/1/2030
Rate Increase % 0.0% 0.0% 5.0% 5.0% 5.0%
Residential – Fixed Monthly Rates per Dwelling Unit ($ / dwelling / month) Single Family $77.61 $82.31 $82.31 $86.43 $90.75 $95.29 Multi Family n/a 67.44 67.44 70.81 74.35 78.07
Residential – Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater than 4 HCF Single Family $11.34 $0.00 $0.00 $0.00 $0.00 $0.00
Commercial – Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater than 4 HCF Low Strength $9.88 $11.91 $11.91 $12.51 $13.13 $13.79
Medium Strength 12.01 14.59 14.59 15.32 16.09 16.89
High Strength 20.14 20.24 20.24 21.25 22.31 23.43
Commercial – Fixed Monthly Rate per Connection ($ / connection / month) Low Strength $81.05 $47.64 $47.64 $50.02 $52.52 $55.15
Medium Strength 81.05 58.38 58.38 61.29 64.36 67.58
High Strength 81.05 80.95 80.95 84.99 89.24 93.71
Note: Current Single-Family Fixed Monthly Rate includes 4 HCF, Proposed rates are fixed with no volumetric charge. Multi-Family rate applies to residential connections with two or more dwelling units.

City of Arcata
Water and Wastewater Rate
Study
January 28, 2026 Draft

January 14, 2026

City of Arcata
736 F Street
Arcata, CA 95521
Attention: Tabatha Miller, Finance Director
Re: Water and Wastewater Rate Study
Bartle Wells Associates (BWA) is pleased to submit to the City of Arcata (City) the attached Water and Wastewater Rate Study. The study presents Bartle Wells Associate’s analysis of the operating and non-operating expenses of the City’s water and wastewater enterprise funds and provides five-year cash flow projections and rates. The primary purpose of this study was to make recommendations that would achieve their financial sustainability while improving legal compliance and proportionality.

BWA finds that the rates and charges proposed in our report reflect the cost-of-service for each customer, follow generally accepted rate setting principles, and adhere to the substantive requirements of Proposition 218. BWA believes the proposed rates are fair and reasonable to the City’s customers.

We have enjoyed working with the City on this rate study and appreciate the assistance of City staff members throughout the project. Please contact us with any future questions about this study and the rate recommendations.

Sincerely,
Erik Helgeson, MBA
Principal / Vice President
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com

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TABLE OF CONTENTS
1 Executive Summary ................................................................................................1

1.1 Introduction .................................................................................................................. 1

1.2 Key Drivers of Proposed Rate Increases......................................................................... 1

1.3 Rate Recommendations................................................................................................. 2 2 Background & Objectives........................................................................................4 3 Legal Requirements & Rate Methodology...............................................................5

3.1 Constitutional Rate Requirements................................................................................. 5

3.2 Statute of Limitations .................................................................................................... 6

3.3 Water and Wastewater Rate-Setting Methodology....................................................... 6 4 Water Demand and Customer Characteristics.........................................................8

4.1 Projected Water Demand .............................................................................................. 8

4.2 Water Services and Equivalent Capacity........................................................................ 8 5 Water Finances & Cash Flow Projections...............................................................10

5.1 Water Financial Overview............................................................................................ 10

5.2 Water Financial Plan Assumptions............................................................................... 10

5.3 Financial Plan Drivers................................................................................................... 11

5.4 Cash Flow Projection Scenarios ................................................................................... 13

5.5 Water Financial Plan Scenario 1: Immediate Revenue Increase .................................. 15

5.6 Water Financial Plan Scenario 2: Phased-In Revenue Increase.................................... 17 6 Water Cost of Service Rate Derivation ..................................................................19

6.1 Cost of Service Analysis................................................................................................ 19

6.2 Cost Allocation Rate Revenue Requirements............................................................... 19

6.3 Functional Allocation ................................................................................................... 20

6.4 Water Rate Structure Recommendations.................................................................... 21

6.5 Rate Derivation............................................................................................................ 21

6.6 Recommended Water Rates........................................................................................ 22

6.7 Bill Impacts ................................................................................................................ 23 7 Water Summary and Recommendations...............................................................25

7.1 Regional Water Rate Survey ........................................................................................ 25

7.2 Water Summary and Recommendations..................................................................... 26 8 Wastewater Finances & Cash Flow Projections .....................................................27

8.1 Wastewater Financial Overview .................................................................................. 27

8.2 Wastewater Financial Plan Assumptions ..................................................................... 27

8.3 Financial Plan Drivers................................................................................................... 28

8.4 Wastewater Cash Flow Projections.............................................................................. 29 9 Wastewater Cost of Service Analysis and Rate Derivation.....................................32

9.1 Wastewater Cost of Service Rate Derivation Process .................................................. 32

9.2 Customer Flows and Loadings...................................................................................... 33

9.3 Cost of Service Analysis................................................................................................ 34

9.3.1 Cost Allocation Rate Revenue Requirements............................................................... 34

9.3.2 Functional Allocation ................................................................................................... 35

9.3.3 Functional Component Unit Costs ............................................................................... 36

9.3.4 Rate Revenue Requirements by Customer Class.......................................................... 36

9.4 Rate Derivation............................................................................................................ 37

9.4.1 Current Residential Rates ............................................................................................ 37

9.4.2 Residential Rate Structure Recommendations............................................................. 38

9.4.3 Residential Rate Derivation.......................................................................................... 38

9.4.4 Current Commercial Rates........................................................................................... 39

9.4.5 Commercial Rate Structure Recommendations........................................................... 39

9.4.6 Customer Class Rate Derivation................................................................................... 39

9.5 Recommended Wastewater Rates............................................................................... 41 10 Wastewater Summary and Recommendations .....................................................42

10.1 Regional Wastewater Rate Survey............................................................................... 42

10.2 Wastewater Summary and Recommendations............................................................ 43 11 Conclusion & Recommendations ..........................................................................44 Appendix A - Water and Wastewater Tables.....................................................45

TABLES
Table 1. Scenario 1 Recommended Water Rates ............................................................................... 2 Table 2. Scenario 2 Recommended Water Rates ............................................................................... 3 Table 3. Proposed Wastewater Rates................................................................................................. 3 Table 4. Historic and Projected Metered Water Demand.................................................................. 8 Table 5. Water Services and Meter Equivalent Units......................................................................... 9 Table 6. Capital Funding Sources...................................................................................................... 12 Table 7. Water Cash Flow Scenario Comparison.............................................................................. 14 Table 8. Water Scenario 1 Cash Flow Projection Summary.............................................................. 15 Table 9. Projected Revenues & Expenses: Water Scenario 1 ........................................................... 16 Table 10. Water Scenario 2 Cash Flow Projection Summary............................................................ 17 Table 11. Projected Revenues & Expenses: Water Scenario 2 ......................................................... 18 Table 12. Functional Allocation ........................................................................................................ 20 Table 13. Unit Rate Derivation ......................................................................................................... 21 Table 14. Fixed Rate Derivation........................................................................................................ 22 Table 15. Scenario 1 Recommended Water Rates ........................................................................... 22 Table 16. Scenario 2 Recommended Water Rates ........................................................................... 23 Table 17. Scenario 1 Bill Impacts...................................................................................................... 23 Table 18. Scenario 2 Bill Impacts...................................................................................................... 23 Table 19. Capital Funding Sources.................................................................................................... 29 Table 20. Projected Wastewater Revenues & Expenses.................................................................. 31 Table 21. Wastewater Flows............................................................................................................. 33 Table 22. Wastewater Strength Loadings......................................................................................... 34 Table 23. Rate Revenue Requirements by Functional Components................................................ 36 Table 24. Functional Component Unit Costs.................................................................................... 36 Table 25. Functional Allocation Units by Class................................................................................. 37 Table 26. Total Functional Rate Revenue Requirements by Class ................................................... 37 Table 27. Residential Rate Derivation .............................................................................................. 38 Table 28. Commercial Rate Derivation............................................................................................. 40 Table 29. Proposed Wastewater Rates............................................................................................. 41

FIGURES
Figure 1: Cost of Service Rate-Setting Methodology.......................................................................... 7 Figure 2: Water Scenario 1 Projected Cash Flow Graph................................................................... 15 Figure 3: Water Scenario 2 Projected Cash Flow Graph................................................................... 17 Figure 4: Scenario 1 Bill Impacts....................................................................................................... 24 Figure 5: Scenario 2 Bill Impacts....................................................................................................... 24 Figure 6: Regional Single Family Residential Water Rate Survey..................................................... 25 Figure 7: Projected Wastewater Revenues & Expenses................................................................... 30 Figure 8: Wastewater Cost of Service Analysis and Rate Derivation Process.................................. 32 Figure 9: Regional Single Family Residential Wastewater Rate Survey ........................................... 42

Glossary of Terms
Terms Descriptions
AWWA American Water Works Association
BWA Bartle Wells Associates
HCF One Hundred Cubic Feet
CIP Capital Improvement Projects
City The City of Arcata
COS Cost of Service
Cost Allocation Apportioning expenses to utility user fees and rates in order to charge customers proportionally to the level of benefit they receive
CPI Consumer Price Index/Indices
Enterprise Fund Funds are established to account for governmental activities that provide goods or services primarily to the public at large on a consumer fee basis
Fixed Charges A charge that is held constant over a period of time and applied at even intervals
FYE Fiscal Year End (June 30)
General Fund The main operating fund for the City
M1 Manual “Principles of Water Rates, Fees, and Charges: Manual of Water Supply Practices M1", 6th edition published by AWWA Meter
Equivalent
Ratios
The ratio of a water meter's maximum safe flow in comparison to a smaller water meter
Multi-family Utility customers meeting the criteria of the multi-family class O&M Operations and maintenance
Prop. 218 Proposition 218, Added Articles 13C & 13D to the California Constitution
R&R Repair and Replacement
Rate Setting
Period
Limited to five (5) years under Prop. 218.

Revenue
Requirements
The amount of future funding which needs to be recovered from an enterprise's user fees/rates
Solvent Able to pay long-term debts and other financial obligations Volumetric
Rates
Utility rate based on a metered volume of water

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Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 1 |Page 1 EXECUTIVE SUMMARY

1.1 Introduction
The City of Arcata provides water and wastewater services to an estimated population of approximately 19,000. The water and wastewater utilities are financially self-supporting enterprises that rely primarily on revenues from service charges to fund the costs of providing service. As such, the City’s rates need to be set at adequate levels to a) fund the costs of operating and maintaining the water and wastewater systems, b) fund necessary capital improvements to keep the City’s infrastructure in good operating condition, and c) meet annual debt service funding requirements.

In 2025, the City engaged BWA to perform a rate study analyzing the capital and operating costs associated with the City’s water and wastewater utilities and to determine recovery of costs for providing water and wastewater utility services. Proposed rates are designed to fund the operating and capital needs of the City’s utilities and equitably recover costs from all customers. Final recommendations incorporate input from City Staff.

1.2 Key Drivers of Proposed Rate Increases
The City is anticipating a number of financial challenges that will require rate increases in upcoming years. Key drivers of future rate increases are:

Ongoing Cost Inflation
The City’s water and wastewater enterprises face ongoing operating cost inflation due to annual increases in a range of expenses including staffing, utilities, insurance, supplies, etc. On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with cost inflation and prevent rates from falling behind the cost of providing service. Historically, inflation consistently hovered between 2% and 3%. Currently, inflation has mostly normalized after forty-year highs but remains near 3%. Given the recent volatility, BWA designed the inflation projections to be slightly conservative to leave the City in a strong financial position while not driving excessive rate increases.

Capital Improvement Needs & Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its water and wastewater systems which requires a steady stream of repair, improvement, and replacement projects. Accounting for construction cost inflation, the City has identified approximately $36.0 million of water improvement projects and $51.4 million of wastewater improvement projects over the next 5 years.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 2 |Page This study assumes the City will finance the majority of project costs by issuing new debt. While the recommended rate increases ensure the City will meet its new debt servicing requirements, it is important to note that the additional debt servicing will impact the City’s ability to use future rate revenues to fund other ongoing water and wastewater projects.

1.3 Rate Recommendations
Updated financial projections for the water and wastewater enterprises indicate a need for annual revenue increases over the next five years. This report details the proposed water rates for two different water rate revenue scenarios and the proposed wastewater rates. With the recommended rate increases, the City will be able to fund the capital projects necessary to continue providing a high level of service, pay for rising operating costs, and maintain the financial health of the utilities.

BWA reviewed the City’s water and wastewater rates and has the following recommendations to align rates with the current cost of providing service and improve compliance with the requirements of Proposition 218:
• Update the fixed and variable rates to proportionally reflect the cost-of-service analysis in this report.
• Charge outside city customers the same rates charged to inside-city customers.

Due to the cost-of-service analysis and structure adjustments, there will be some variation in the impacts to each customer class in the first year of the recommended rates. The remaining four years of the recommended rate increases are applies on an across-the-board basis with the same percentage increase to all charges. The following tables show a schedule of proposed rates for the next five years.

Table 1. Scenario 1 Recommended Water Rates
2025/26 5/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030
Current Proposed Proposed Proposed Proposed Proposed
Volumetric Rates ($/HCF)
All Usage $7.15 $10.33 $10.33 $11.37 $12.50 $13.50
Fixed Charges ($/meter)
Meter Size
5/8" and 3/4" $12.23 $18.05 $18.05 $19.85 $21.84 $23.58 1" $20.43 $30.14 $30.14 $33.15 $36.47 $39.39
1 1/2" $40.73 $60.10 $60.10 $66.11 $72.72 $78.53
2" $65.19 $96.19 $96.19 $105.81 $116.39 $125.70
3" $122.31 $180.47 $180.47 $198.52 $218.37 $235.84
4" $203.89 $300.85 $300.85 $330.93 $364.02 $393.14
6" $407.65 $601.51 $601.51 $661.66 $727.83 $786.05
8" $652.27 $962.45 $962.45 $1,058.70 $1,164.57 $1,257.73 10" $937.74 $1,383.67 $1,383.67 $1,522.04 $1,674.24 $1,808.18

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 3 |Page Table 2. Scenario 2 Recommended Water Rates
2025/26 5/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
Current Proposed Proposed Proposed Proposed Proposed
Volumetric Rates ($/HCF)
All Usage $7.15 $8.83 $10.42 $11.67 $12.83 $14.12
Fixed Charges ($/meter)
Meter Size
5/8" and 3/4" $12.23 $15.42 $18.19 $20.37 $22.41 $24.65 1" $20.43 $25.74 $30.38 $34.02 $37.42 $41.17
1 1/2" $40.73 $51.33 $60.57 $67.84 $74.63 $82.09
2" $65.19 $82.16 $96.95 $108.59 $119.45 $131.39
3" $122.31 $154.15 $181.90 $203.73 $224.10 $246.51
4" $203.89 $256.97 $303.23 $339.61 $373.58 $410.93
6" $407.65 $513.79 $606.27 $679.03 $746.93 $821.62
8" $652.27 $822.10 $970.07 $1,086.48 $1,195.13 $1,314.64 10" $937.74 $1,181.89 $1,394.63 $1,561.98 $1,718.18 $1,890.00 Table 3. Proposed Wastewater Rates
Wastewater User 2025/26 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Current Proposed Proposed Proposed Proposed Proposed
Residential - Fixed Monthly Rate per Unit
Single Family $77.61 $82.31 $82.31 $86.43 $90.75 $95.29 Multi-Family n/a 67.44 67.44 70.81 74.35 78.07
Residential - Volumetric Rates per Hundred Cubic Feet (hcf) of Water Use Greater Than 4 HCF Single Family $11.34 $0.00 $0.00 $0.00 $0.00 $0.00
Commercial - Volumetric Rates per Hundred Cubic Feet (hcf) of Water Use Greater Than 4 HCF Low Strength $9.88 $11.91 $11.91 $12.51 $13.13 $13.79
Medium Strength 12.01 14.59 14.59 15.32 16.09 16.89
High Strength 20.14 20.24 20.24 21.25 22.31 23.43
Commercial - Minimum Monthly Fixed Rate per Connection
Low Strength $81.05 $47.64 $47.64 $50.02 $52.52 $55.15
Medium Strength 81.05 58.38 58.38 61.29 64.36 67.58
High Strength 81.05 80.95 80.95 84.99 89.24 93.71
In future years, the City can re-evaluate its finances and revenue requirements and adjust rates as needed based on updated projections. However, while the City always has the flexibility to implement rate adjustments that are lower than adopted pursuant to Proposition 218, future rates cannot exceed adopted increases without going through the Proposition 218 process again. Rates adopted pursuant to Proposition 218 are essentially future rate caps.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 4 |Page 2 BACKGROUND & OBJECTIVES
Background
The City of Arcata is framed by the Pacific Ocean on the west, forested hills on the east, the Mad River on the North, and Humboldt Bay to the south. It is situated in an 11 square mile area in the northern coast region of California at the western mid-point of Humboldt County and is located 275 miles north of San Francisco. The City provides water and wastewater services to an estimated population of approximately 19,000.

In 2025, the City engaged BWA to perform a rate study analyzing the capital and operating costs associated with the City’s water and wastewater utilities and to determine recovery of costs for providing water and wastewater utility services. This report along with all included exhibits and appendixes presents BWA’s analysis of the operating and non-operating expenses of the City’s water and wastewater enterprises. The primary purpose of this study was to analyze the City’s enterprise funds and make recommendations that enhance the financial sustainability of each enterprise and to review utility rates to ensure that they adhere to the State’s legal requirements.

Rate Study Objectives
Key goals and objectives of the rate study include developing water and wastewater rates that:
• Capture enough revenues to move forward with and complete capital projects that will provide City of Arcata water rate payers with clean and safe drinking water. • Capture enough revenues to move forward with and complete capital projects and that will ensure reliable wastewater collection and treatmentservices for City of Arcata wastewater rate payers.
• Recover the costs of providing utility services including operating costs, capital costs, and build prudent reserves to ensure the water and wastewater funds continue to operate as financially self-sustaining Enterprise Funds.
• Are fair and equitable to all customers.
• Are easy to understand and implement.
• Comply with the substantive cost-of-service requirements of the California Constitution, Article 13D, Section 6 (established by Proposition 218) and the general mandate of Article 10, Section 2 that prohibits the wasteful use of water.
• Support the City’s long-term operational and financial stability.

This report summarizes key findings and recommendations for overall rate revenue increases over the next five years. The full set of tables are included in the appendix to this report.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 5 |Page 3 LEGAL REQUIREMENTS & RATE METHODOLOGY

3.1 Constitutional Rate Requirements
The California Constitution includes two key articles that directly govern or impact the City’s water and wastewater rates: Article 10 and Article 13D. The water rate recommendations developed in this study were designed to comply with constitutional mandates, provisions of the California Water Code and Government Code. In accordance with California constitutional provisions, the proposed rates are designed to a) recover the City’s cost of providing service, b) recover revenues in proportion to the cost for serving each customer, and c) promote conservation and discourage waste.

Article 10, Section 2
Article 10, Section 2 of the California Constitution was established by voter-approval in 1976 and requires public agencies to maximize the beneficial use of water, prevent waste, and encourage conservation. Section 2 states that:

It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.

Article 13D, Section 6
Proposition 218 was adopted by California voters in 1996 and added Articles 13C and 13D to the California Constitution. Article 13D, Section 6 governs property-related charges, which the California Supreme Court subsequently ruled includes ongoing utility System Charges such as water, wastewater, and garbage rates. Article 13D, Section 6 establishes a) procedural requirements for imposing or increasing property-related charges, and b) substantive requirements for those charges. Article 13D also requires voter approval for new or increased property-related charges but exempts rates for water, wastewater, and garbage service from this voting requirement if the appropriate procedure is followed.

The substantive requirements of Article 13D, Section 6 require the City’s water rates to meet the following conditions:
1) Revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service.
2) Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 6 |Page 3) The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel. 4) No fee or charge may be imposed for a service unless that service is used by, or immediately available to, the owner of the property in question.

3.2 Statute of Limitations
Pursuant to California Government Code 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fees. This statute of limitations applies to the wastewater rates proposed in this rate study and is included in the Proposition 218 Notice.

3.3 Water and Wastewater Rate-Setting Methodology
The California Constitution does not give agencies leeway to arbitrarily set rates purely based on policy preferences. Instead, it provides agencies with flexibility to implement rates within a framework established by Articles 10 and 13D. Together, these Articles establish that rates should both a) discourage waste and encourage conservation of water, and b) not exceed the costs of service attributable to each parcel or customer.

Water and wastewater utilities have used a wide range of approaches or perspectives for allocating and recovering their costs for providing service, and these costs are most commonly recovered from a combination of fixed and variable charges. The percentage of revenues derived from the fixed and variable charges varies for each agency. They should be proportional to each utility’s expenditures and must not exceed the system’s cost of providing service. A higher level of fixed charges provides better revenue stability and less dependence on variable sales. On the other hand, higher dependence on volumetric revenues provides a greater conservation incentive.

Depending on perspective, the same costs can reasonably be allocated one hundred percent to fixed revenue recovery, one hundred percent to variable rate recovery, or to some combination of the two.

For example, debt service used to fund treatment facilities can legitimately be treated as a) a fixed annual cost that should be recovered from fixed charges, b) a cost related to providing supply to meet customer demand and therefore a cost that should be recovered from variable rates, or c) a cost that can be recovered from both fixed and variable rates in recognition of the two alternative perspectives.

Many of the utility’s costs are variable costs that vary by the size of the system including personnel, supplies, and utilities. However, a portion of these variable costs can reasonably be apportioned to fixed rate recovery, and vice versa with fixed costs. For example, a share of the fixed cost of salaries related to treatment plant operations can reasonably be recovered from usage-based charges as these costs are incurred to meet demand flows. For debt service, payments may be fixed annual costs, but it

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 7 |Page is reasonable to recover some of these costs from usage-based rates as the costs are incurred to fund infrastructure that will improve the wastewater system. Ultimately, there is no single correct way to allocate or attribute costs. Hence, five similar agencies may have five different rate structures provided each agency can establish a reasonable cost basis for their own particular rate structure within the parameters of meeting the various requirements of the California Constitution.

While there is no single correct approach, BWA believes that costs should be allocated within a reasonable range of fixed and variable allocation that reflects both a) underlying cost causation, to the extent such causation can reasonably be determined or estimated, and b) the policy preferences of the agency in cases where a range of reasonable approaches can be justified.

BWA uses a straightforward methodology to establish equitable charges that recover the cost of providing service and fairly apportion costs. The general methodology is summarized in the following figure.

Figure 1: Cost of Service Rate-Setting Methodology
Key elements of this study include:
• Project Initiation and Data Collection – Review financial policies; collect financial and other relevant data; and review rate structures;
• Demand Analysis – Analyze past customer demands and customer characteristics to forecast future demands;
• Long Range Financial Plans – Develop financial projections to evaluate annual revenue requirements from rates and the overall level of rate increases needed to fund the costs of providing service and support long-term financial stability; • Cost Allocation – Group the City’s costs in terms of the function they serve as a basis to proportionally allocate the revenue requirement from rates; • Cost-of-Service Rate Design – Develop rates that proportionately recover costs; and • Prop 218 Process – Ensure compliance with the substantive and procedural requirements of Proposition 218.

Revenue Requirements
Determine future funding
requirements from rates
Cost Allocation
Equitably apportion costs
to rate components
Rate Design
Develop rates that recover
revenues in proportion to
the cost of providing service

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 8 |Page 4 WATER DEMAND AND CUSTOMER CHARACTERISTICS

4.1 Projected Water Demand
The City’s primary water source is water purchased from Humboldt Bay Municipal Water District.

Projected FY 25/26 water demand is based on historical metered demand but projected somewhat conservatively due to the financial challenges facing the water enterprise.

Table 4. Historic and Projected Metered Water Demand
Metered Water Use FY 22-23 FY 23-24 FY 24-25 FY 25-26
Actual Actual Actual Projected
Water Use (HCF)1 620,540 596,621 606,996 590,000
1, HCF = One Hundred Cubic Feet

4.2 Water Services and Equivalent Capacity
The size of a customer’s meter reflects the portion they require of the water system’s capacity. A significant percentage of the costs of any water system is related to its requirement to deliver water to any customer instantaneously at any time, up to the maximum safe flow capacity of a customer’s meter. Simply put, as the size of a customer’s water meter increases, the instantaneous demand it can place on the City’s water system increases.

Fixed charges for each meter size are based on the capacity of a meter relative to the capacity of smallest meter size (e.g., a 5/8-inch meter) in the City’s system. In this study, the relative capacity of a meter size, referred to as an Equivalent Demand Unit (EDU), is calculated by dividing the capacity of a given meter size by the capacity of a 5/8” meter. The meter equivalent ratios used are proportional to the maximum safe flow of a 5/8" meter. The sum of all EDU’s reflects the total capacity of the water enterprise.

The following table contains the counts of water services and calculations of meter equivalent units.

Total meter equivalent units for each meter size are derived by multiplying the meter equivalent ratio by the number of services at each meter size.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 9 |Page Table 5. Water Services and Meter Equivalent Units

Meter Size
Total
Meters
AWWA
Capacity
Factor1
Equivalent Demand
Units (EDUs)
Annual
EDUs
5/8" 5,540 1.00 5,540 66,480
3/4" 429 1.00 429 5,148
1" 359 1.67 600 7,194
1 1/2" 71 3.33 236 2,837
2" 192 5.33 1,023 12,280
3" 31 10.00 310 3,720
4" 8 16.67 133 1,600
6" 10 33.33 333 4,000
8" 1 53.33 53 640
10" 1 76.67 77 920
Totals 6,642 8,735 104,820
1, Based on the safe maximum operating capacity as published by the American Water Works Association (AWWA).

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 10 |Page 5 WATER FINANCES & CASH FLOW PROJECTIONS

5.1 Water Financial Overview
Bartle Wells Associates conducted an independent evaluation of the water enterprise’s finances. Key observations include:
• The approved loan from the Wastewater Fund is not sufficient to fund the capital projects that are under way. It is very helpful to temporarily bridge the gap until new debt funding can be secured after rate increases are effective.
• The water enterprise will need rate increases to keep revenues in line with rising costs and fund needed capital improvements.
• Over the next five years it is projected that priority capital projects will cost $36.0 million. • The enterprise needs to maintain prudent reserves to be prepared for water use fluctuations, remain able to operate during a disaster, and qualify for grants or low-cost financing.

BWA developed long-term cash flow projections to determine the water enterprise’s annual revenue requirements and project required water rate revenue increases. The financial projections incorporate the latest information available as well as reasonable and slightly conservative assumptions. This report explores the financial plan and rates for two different revenue recovery scenarios which are described throughout the remainder of this report.

5.2 Water Financial Plan Assumptions
Assumptions were developed based on input from City Staff, historical escalation factors, and conservative projections for future escalation factors to reasonably ensure that the maximum rates adopted by the City will provide sufficient revenues to support the City’s water operations.

Key information and assumptions include:

Reserves
• BWA recommends the City aim to maintain prudent fund reserves of a least one year of operating costs. BWA recommends the water enterprise maintain one year of operating expenses in reserves for cash flow and liquidity purposes in case of revenue loss/interruption, and to provide additional funds during unforeseen emergencies. Fund reserves will fluctuate based on the timing of revenues and expenses, but the proposed rates are projected to provide the water enterprise with sufficient fund reserves. At a minimum, the water enterprise should aim to hold at least three months of operating expenses in reserve.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 11 |Page Revenue Assumptions
• The water enterprise is projected to begin FY 2025-26 with $9.2 million in reserves. This amount approximately meets BWA’s recommended level of operating reserves. • BWA did not escalate revenues for miscellaneous non-rate water revenues in its projections.

Recommended rates are the maximum rates the City can adopt, which is why BWA uses conservative estimates when making revenue projections. • As new construction can be unpredictable, BWA did not escalate revenues for growth or connection charges in its projections. Recommended rates are the maximum rates the City can adopt, which is why BWA uses conservative estimates when making revenue projections. • Interest income is estimated based on projected reserve levels. Future projections are estimated based on a conservative interest earning estimate of 2%. Actual interest amounts will vary based on reserves and future interest earning rates.

Expense Assumptions
• Operating and maintenance costs are based on the FY 2025-26 budget and include updated estimates developed with the help of City Staff.
• General operating and capital cost inflation is projected to escalate at an annual rate of 4% in FY 2026-27 and at an annual rate of 4% thereafter. This is a conservative estimate to account for future cost inflation and is based on recent and historic inflation. • The Water Enterprise will need to cash fund at least $6.7 million in capital spending in the next five years.
• Debt service projections are based on outstanding debt schedules and projected issuances of new debt. The financial plan assumes the issuance of thirty-year bonds at 5.5% interest for $9.5 million in FY 2025-26 and $20.0 million in FY 2028-29 to fund critical waterline and tank improvement projects.

5.3 Financial Plan Drivers
The City is anticipating a number of financial challenges that will require rate increases in upcoming years. Key drivers of future rate increases are:

Current Capital Project Funding
The approved loan from the Wastewater Fund is not sufficient to fund the capital projects that are under way. It is very helpful to temporarily bridge the gap until new debt funding can be secured after rate increases are effective. BWA recommends implementing rate increases at the beginning of 2026 to support issuing bonds for $9.5 million to be used for refunding the wastewater enterprise and maintaining prudent reserves. Without securing additional financing, the water fund reserves are expected to drop to $500,000 which is imprudent and will have a significant impact on the ability of the enterprise to borrow funds in the future.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 12 |Page Capital Improvement Needs & Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its water system which requires a steady stream of repair, improvement, and replacement projects. Accounting for construction cost inflation, the City has identified approximately $36.0 million of capital improvement projects over the next 5 years.

The largest upcoming capital project is the Citywide Steel Waterline Replacement project. This project involves the removal and replacement of leaking steel and asbestos waterlines throughout the City, approximately 10% of the total water system. This study assumes the City will finance the majority of waterline replacement project costs by issuing new debt. While the recommended rate increases ensure the City will meet its new debt servicing requirements, it is important to note that the additional debt servicing will impact the City’s ability to use future water revenues to fund other ongoing water projects.

The following table shows the projected capital funding sources for the next five years.

Table 6. Capital Funding Sources
Capital Improvement Projects 2025-26 2026-27 2027-28 2028-29 2029-30 Projected Projected Projected Projected Projected
Total Project Cost
(Inflation $) $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Capital Funding $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Grants $0 $0 $0 $0 $0
Use of New Debt Proceeds 9,100,000 400,000 0 10,000,000 10,000,000 Cash Funded $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Ongoing Cost Inflation
The City’s water enterprise faces ongoing operating cost inflation due to annual increases in a range of expenses including staffing, utilities, insurance, supplies, etc. On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with cost inflation and prevent rates from falling behind the cost of providing service. Historically, inflation consistently hovered between 2% and 3%. Currently, inflation has mostly normalized after forty-year highs, but remains near 3%. Given the recent volatility, BWA designed the inflation projections to be slightly conservative to leave the City in a strong financial position while not driving excessive rate increases.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 13 |Page

5.4 Cash Flow Projection Scenarios
Long-term cash flow projections were developed based on the assumptions and key drivers of future rate increases described above. The projections were used to determine the water utility’s annual revenue requirements and project required water rate revenue increases. The long-term cash flow projections incorporate the latest information available from the City’s budget, annual reports, capital spending projections, metered water demand data, as well as a number of reasonable assumptions developed with input from the City. The overall rate revenue increases are designed to fund the City’s cost of providing service, maintain roughly balanced budgets, maintain healthy debt service coverage, and maintain prudent reserves.

The projections indicate the need for rate increases. Actual impacts to customers water bills will vary based meter size and water use due to the outcome of the updated cost-of-service analysis.

This report explores the financial plan and rates for two different rate revenue scenarios which are as follows:
• Scenario 1, Immediate Revenue Increase – In this scenario rate revenues are increased as soon as possible, at the beginning of 2026 but the next increase is not until (July 1, 2027). There are also increases at the beginning of the following two fiscal years. In FY 2029-30, the final year of noticed rate increases, this scenario will have the lowest rates and highest reserve level of the two scenarios.
• Scenario 2, Phased-In Revenue Increase – In this scenario, rate revenues are increased as soon as possible, at the beginning of 2026 and then on January 1st of the subsequent four years. In final year of noticed rate increases, this scenario will have the highest rates and lowest reserve level of the two scenarios.

The following table shows a comparison of the two scenarios.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 14 |Page Table 7. Water Cash Flow Scenario Comparison
Water Rate Scenarios FY 25-26* FY 26-27 FY 27-28 FY 28-29 FY 29-30 Scenario 1: Immediate Revenue Recovery
Rates Effective: May 1, 2026 Jul. 1, 2027 Jul. 1, 2028 Jul. 1, 2029 Jul. 1, 2030 Rate Revenue Increase ($) $1,017,063 $0 $798,857 $878,743 $773,294 Rate Revenue Increase (%) 44.0% 0.0% 10.0% 10.0% 8.0%
Ending Reserve Balance $6,935,088 $7,745,508 $9,088,705 $9,127,187 $8,516,465 Scenario 2: Phased-In Revenue Recovery
Rates Effective: Apr. 1, 2026 Jan. 1, 2027 Jan. 1, 2028 Jan. 1, 2029 Jan. 1, 2030 Rate Revenue Increase ($) $531,647 $614,121 $483,109 $450,901 $495,992 Rate Revenue Increase (%) 23.0% 18.0% 12.0% 10.0% 10.0% Ending Reserve Balance $6,449,671 $6,699,504 $7,769,227 $7,584,132 $6,918,910 * Initial bill impacts will vary based on customer class and usage due to rate structure adjustments realigning rates with cost of service.

In future years, the City can re-evaluate its finances and revenue requirements and adjust rates as needed based on updated projections. However, while the City always has the flexibility to implement rate adjustments that are lower than adopted pursuant to Proposition 218, future rates cannot exceed adopted increases without going through the Proposition 218 process again. Rates adopted pursuant to Proposition 218 are essentially future rate caps.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 15 |Page

5.5 Water Financial Plan Scenario 1: Immediate Revenue Increase The following section presents a financial plan for the water enterprise for a scenario which immediately recovers the annual operating revenue requirements. A summary of the key elements of the five-year cash flow projection for this scenario is displayed in the following table.

Table 8. Water Scenario 1 Cash Flow Projection Summary
Scenario 1: Immediate
Revenue Increase FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Ending Reserves $6,935,088 $7,745,508 $9,088,705 $9,127,187 $8,516,465 Rate Revenue Increase $1,017,063 $0 $798,857 $878,743 $773,294 The following figure shows cash flow projections incorporating the assumptions described above.

Figure 2: Water Scenario 1 Projected Cash Flow Graph
$0
$2
$4
$6
$8
$10
$12
2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Millions
City of Arcata
Projected Water Revenues & Expenses
O&M Debt Service Cash Funded Capital
Revenue Reserves

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 16 |Page The rate projections shown on the following table are designed to fund the City’s cost of providing service while maintaining balanced budgets and building prudent minimal levels of fund reserves each year.

Table 9. Projected Revenues & Expenses: Water Scenario 1

Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30
Proposed Revenue Increase 44.0% 0.0% 10.0% 10.0% 8.0%
Beginning Reserve Balance $9,179,175 $6,935,088 $7,745,508 $9,088,705 $9,127,187

REVENUES
Rate Revenues
Current Rate Revenue $5,547,618 $7,988,570 $7,988,570 $8,787,426 $9,666,169 Revenue from Rate Increases 2,440,952 0 798,857 878,743 773,294 Timing adjustment 1 ($1,423,889)
Total Rate Revenues $6,564,681 $7,988,570 $8,787,426 $9,666,169 $10,439,463 Non-Rate Revenues
Connection Fees $680,000 $100,000 $100,000 $100,000 $100,000 Other Revenues 93,800 89,950 85,965 81,841 77,572
Interest on Pooled Cash 2 $183,584 $138,702 $154,910 $181,774 $182,544 Total Non-Rate Revenues $957,384 $328,652 $340,875 $363,615 $360,116 Total Revenue $7,522,064 $8,317,221 $9,128,302 $10,029,784 $10,799,579

EXPENDITURES
Total O&M $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033 Existing Debt Service 139,089 138,562 138,551 139,028 138,666 New Debt Service 261,250 670,853 670,853 1,369,227 2,067,602 Interfund Loan 99,167 0 0 0 0
Rate Funded Capital $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Total Expenditures $9,766,152 $7,506,802 $7,785,104 $9,991,303 $11,410,301 Net Revenue ($2,244,087) $810,420 $1,343,198 $38,481 ($610,722) Ending Fund Balance $6,935,088 $7,745,508 $9,088,705 $9,127,187 $8,516,465 Debt Service Coverage 2.49 2.21 2.86 1.93 1.53
1, Reflects rates effective February 1, 2026, and July 1 each year thereafter. 2, 2% earnings on fund balance.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 17 |Page

5.6 Water Financial Plan Scenario 2: Phased-In Revenue Increase The following section presents a financial plan for the water enterprise for a scenario which includes a prolonged schedule for recovery of financial sustainability for the water enterprise than Scenario 1. A summary of the key elements of the long-term cash flow projections for this scenario is displayed in the following table.

Table 10. Water Scenario 2 Cash Flow Projection Summary Scenario 2: Phased-In Revenue
Recovery FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Ending Reserves $6,449,671 $6,699,504 $7,769,227 $7,584,132 $6,918,910 Rate Revenue Increase $531,647 $614,121 $483,109 $450,901 $495,992 The following figure shows cash flow projections incorporating the assumptions described above. The rate projections shown on the following table are designed to fund the City’s cost of providing service.

Figure 3: Water Scenario 2 Projected Cash Flow Graph
$0
$2
$4
$6
$8
$10
$12
2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Millions
City of Arcata
Projected Water Revenues & Expenses
O&M Debt Service Cash Funded Capital
Revenue Reserves

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 18 |Page Detailed, long-term, cash flow projections for this scenario are shown in the following table.

Table 11. Projected Revenues & Expenses: Water Scenario 2 Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30
Proposed Revenue Increase 23.0% 18.0% 12.0% 10.0% 10.0% Beginning Reserve Balance $9,179,175 $6,449,671 $6,699,504 $7,769,277 $7,584,132

REVENUES
Rate Revenues
Current Rate Revenue $5,547,618 $6,823,570 $8,051,812 $9,018,030 $9,919,833 Revenue from Rate Increases 1,275,952 1,228,243 966,217 901,803 991,983 Timing adjustment 1 ($744,305) ($614,121) ($483,109) ($450,901) ($495,992) Total Rate Revenues $6,079,264 $7,437,691 $8,534,921 $9,468,931 $10,415,824 Non-Rate Revenues
Connection Fees $680,000 $100,000 $100,000 $100,000 $100,000 Other Revenues 93,800 89,950 85,965 81,841 77,572
Interest on Pooled Cash 2 $183,584 $128,993 $133,990 $155,386 $151,683 Total Non-Rate Revenues $957,384 $318,943 $319,955 $337,227 $329,255 Total Revenue $7,036,648 $7,756,635 $8,854,876 $9,806,158 $10,745,080

EXPENDITURES
Total O&M $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033 Existing Debt Service 139,089 138,562 138,551 139,028 138,666 New Debt Service 261,250 670,853 670,853 1,369,227 2,067,602 Interfund Loan 99,167 0 0 0 0
Rate Funded Capital $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Total Expenditures $9,766,152 $7,506,802 $7,785,104 $9,991,303 $11,410,301 Net Revenue ($2,729,504) $249,833 $1,069,772 ($185,145) ($665,221) Ending Fund Balance $6,449,671 $6,699,504 $7,769,277 $7,584,132 $6,918,910 Debt Service Coverage 1.52 1.52 2.52 1.78 1.50
1, Reflects rates effective February 1, 2026 and January 1 for each year thereafter. 2, 2% earnings on fund balance.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 19 |Page 6 WATER COST OF SERVICE RATE DERIVATION

6.1 Cost of Service Analysis
There must be a cost-based nexus between the revenue requirement from the cash flow and the proposed rates. This section describes the steps BWA took to determine the rate revenue requirement need from each customer class that is proportional to their cost of service.

6.2 Cost Allocation Rate Revenue Requirements
Cost allocation categories are groupings of the water enterprise’s non-rate revenues and expenses that are then allocated to the utility’s functional components (capacity, all volume, as all other, described below). A functional component reflects a grouping of the utility’s expenses whose magnitude is driven by the quantity of a specific unit-of-measure. For example, costs allocated to the all volume functional component are driven in part by the volume of water purchases cost component.

The functional components used in this study are as follows:
• Capacity – Fixed costs are recovered per meter. Fixed costs or costs related to system capacity were allocated to this category.
• All Volume – Costs reasonably recovered volumetrically were allocated to this category.

Volumetric costs are recovered per unit of volume (HCF) based on all projected demand. • As All Other – Items in this category do not impact the functional allocation because they are driven by the overall activity of the utility. This includes interest earnings on fund balances. Interest is allocated entirely to the “As All Other” functional component and does not impact the allocation.

To ensure the rates derived for the next five years are proportional to the costs, the amounts in the cost allocation categories are based on an average of the projected revenues and expenses for the next five years. For each cost allocation category, the expenses are reduced by non-rate revenues to determine the amount in each cost allocation category that needs to be funded by rates.

Related expenses and non-rate revenues were grouped into the following allocation categories before being allocated to each functional category:
• Administration – Expenses were allocated 40% to Capacity and 60% to All Volume to reflect that these costs are driven by the overall capacity of the system which is driven both by the projected volume of water sold and the standing capacity in the system. • Maintenance – Expenses are related to maintaining and operating the water system. These costs are allocated 25% to Capacity and 75% to All Volume because these costs related to the overall capacity of the system which is driven both by the projected volume of water sold and the standing capacity in the system.
• Utilities – The allocation represents that most of these costs are variable and caused by pumping and treatment, but some of these costs are fixed. Utility expenses are allocated 10% to Capacity

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 20 |Page and 90% to All Volume because these costs related primarily driven by the projected volume of water sold.
• Water Purchases – Expenses consist of imported water purchases. They are allocated 100% to All Volume to reflect that these costs are driven by the projected volume of water sold. • Water Treatment – Expenses consist of the cost to treat water to potable standards. They are allocated 100% to All Volume to reflect that these costs are incurred to meet the volumetric needs of the City.
• Interest – Interest earned on fund balance is allocated entirely to the “As All Other” functional component and does not impact the allocation because interest is driven by the overall activity of the utility.
• Debt Service – Expenses are allocated 15% to Capacity and 85% to All Volume because these costs related to the overall capacity of the system both by the projected volume of water sold and the standing capacity in the system.
• Capital – Expenses are allocated 15% to Capacity and 85% to All Volume because these costs related to the overall capacity of the system both by the projected volume of water sold and the standing capacity in the system.

6.3 Functional Allocation
The following table shows a breakdown of the water utility’s expenses and offsetting revenues and how they are allocated by function. The proportional allocation is then applied to the rate revenue requirement so that the rates are proportional to the cost of service provided.

Table 12. Functional Allocation
5-Year Average
Allocation Category Expenses
Less NonRate
Revenue
Revenue
Requirement Capacity All Volume Total
Administration $4,258,016 $254,128 $4,003,888 40% 60% 100% Maintenance 434,812 0 434,812 25% 75% 100%
Utilities 92,077 0 92,077 10% 90% 100%
Water Purchases 1,925,476 0 1,925,476 0% 100% 100%
Water Treatment 121,781 0 121,781 0% 100% 100%
Debt Service 1,103,134 0 1,103,134 15% 85% 100%
Capital 1,293,200 216,000 1,077,200 15% 85% 100%
Functional Allocation $ $2,046,516 $6,711,852 $8,758,368 Functional Allocation % 23.37% 76.63% 100.00%
Revenue Requirement $1,296,279 $4,251,339 $5,547,618

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 21 |Page

6.4 Water Rate Structure Recommendations
Bartle Wells Associates reviewed the City’s water rates and recommends charging outside city customers the same rates charged to inside city customers to improve compliance with the requirements of Proposition 218.

6.5 Rate Derivation
The allocated revenue requirements need to be recovered on a reasonable per unit basis to be proportional to the service provided.

Monthly Fixed Service Charge
This charge applies to all active services. It recovers the Capacity functional component revenue requirement on a per EDU basis. The unit costs per EDU varies by meter size. EDU ratios are based on the AWWA meter equivalent ratio for each meter size as described in Section 4.

Volumetric Charge
This charge applies to every unit of water sold. It recovers the All Volume functional component revenue requirement on a unit (hundred cubic feet, HCF) basis.

The following table shows the unit rate derivation of the fixed and volumetric charges.

Table 13. Unit Rate Derivation
Allocation Units Capacity All Volume
Unit of Measure EDU HCF
Allocation Units 104,820 590,000
Revenue Requirement $1,296,279 $4,251,339
Unit Cost ($/Unit) $12.53 $7.18
While the All Volume unit rate can be recovered on the basis of every HCF sold, the EDU rate must be calculated for each meter size. This is shown in the following table.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 22 |Page Table 14. Fixed Rate Derivation
Meter Size
AWWA Capacity
Ratio
Monthly
Fixed Charge
5/8" 1.00 $12.53
3/4" 1.00 $12.53
1" 1.67 $20.93
1 1/2" 3.33 $41.73
2" 5.33 $66.80
3" 10.00 $125.33
4" 16.67 $208.92
6" 33.33 $417.72
8" 53.33 $668.37
10" 76.67 $960.88

6.6 Recommended Water Rates
The recommended rates incorporate some modifications to the City’s water rate structure designed to align rates with the current cost of providing service and reflect policy input provided by the City.

Due to these modifications, impacts to water bills will vary based on customer class and water use when the first-year proposed rates are implemented.

The following tables show a 5-year schedule of recommended water rates for each scenario.

Table 15. Scenario 1 Recommended Water Rates
2025/26 5/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030
Current Proposed Proposed Proposed Proposed Proposed
Volumetric Rates ($/HCF)
All Usage $7.15 $10.33 $10.33 $11.37 $12.50 $13.50
Fixed Charges ($/meter)
Meter Size
5/8" and 3/4" $12.23 $18.05 $18.05 $19.85 $21.84 $23.58 1" $20.43 $30.14 $30.14 $33.15 $36.47 $39.39
1 1/2" $40.73 $60.10 $60.10 $66.11 $72.72 $78.53
2" $65.19 $96.19 $96.19 $105.81 $116.39 $125.70
3" $122.31 $180.47 $180.47 $198.52 $218.37 $235.84
4" $203.89 $300.85 $300.85 $330.93 $364.02 $393.14
6" $407.65 $601.51 $601.51 $661.66 $727.83 $786.05
8" $652.27 $962.45 $962.45 $1,058.70 $1,164.57 $1,257.73 10" $937.74 $1,383.67 $1,383.67 $1,522.04 $1,674.24 $1,808.18

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 23 |Page Table 16. Scenario 2 Recommended Water Rates
2025/26 5/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
Current Proposed Proposed Proposed Proposed Proposed
Volumetric Rates ($/HCF)
All Usage $7.15 $8.83 $10.42 $11.67 $12.83 $14.12
Fixed Charges ($/meter)
Meter Size
5/8" and 3/4" $12.23 $15.42 $18.19 $20.37 $22.41 $24.65 1" $20.43 $25.74 $30.38 $34.02 $37.42 $41.17
1 1/2" $40.73 $51.33 $60.57 $67.84 $74.63 $82.09
2" $65.19 $82.16 $96.95 $108.59 $119.45 $131.39
3" $122.31 $154.15 $181.90 $203.73 $224.10 $246.51
4" $203.89 $256.97 $303.23 $339.61 $373.58 $410.93
6" $407.65 $513.79 $606.27 $679.03 $746.93 $821.62
8" $652.27 $822.10 $970.07 $1,086.48 $1,195.13 $1,314.64 10" $937.74 $1,181.89 $1,394.63 $1,561.98 $1,718.18 $1,890.00

6.7 Bill Impacts
The following tables show the impacts of the proposed water rates for each scenario on a range of single-family customers with different levels of consumption.

Table 17. Scenario 1 Bill Impacts
Rate Category Existing Rates Proposed Rates
All Usage $7.15 $10.33
5/8" Monthly Fixed $12.23 $18.05
Water Use Existing Rates Proposed Rates Change ($) Change (%) 2 HCF $26.53 $38.71 $12.18 46%
5 HCF $47.98 $69.70 $21.72 45%
10 HCF $83.73 $121.35 $37.62 45%
20 HCF $155.23 $224.65 $69.42 45%
Table 18. Scenario 2 Bill Impacts
Rate Category Existing Rates Proposed Rates
All Usage $7.15 $8.83
5/8" Monthly Fixed $12.23 $15.42
Water Use Existing Rates Proposed Rates Change ($) Change (%) 2 HCF $26.53 $33.08 $6.55 25%
5 HCF $47.98 $59.57 $11.59 24%
10 HCF $83.73 $103.72 $19.99 24%
20 HCF $155.23 $192.02 $36.79 24%

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 24 |Page The following figures summarize the bill impacts presented in the previous tables.

Figure 4: Scenario 1 Bill Impacts
Figure 5: Scenario 2 Bill Impacts
$26.53 $38.71 $47.98
$69.70
$83.73
$121.35
$155.23
$224.65
$0
$50
$100
$150
$200
$250
Existing
2 HCF
Proposed
2 HCF
Existing
5 HCF
Proposed
5 HCF
Existing
10 HCF
Proposed
10 HCF
Existing
20 HCF
Proposed
20 HCF
City of Arcata
Single Family Residential Monthly Water Bill Comparison Fixed
Variable
$26.53 $33.08
$47.98 $59.57
$83.73
$103.72
$155.23
$192.02
$0
$50
$100
$150
$200
$250
Existing
2 HCF
Proposed
2 HCF
Existing
5 HCF
Proposed
5 HCF
Existing
10 HCF
Proposed
10 HCF
Existing
20 HCF
Proposed
20 HCF
City of Arcata
Single Family Residential Monthly Water Bill Comparison Fixed
Variable

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 25 |Page 7 WATER SUMMARY AND RECOMMENDATIONS

7.1 Regional Water Rate Survey
BWA conducted a survey of current water rates for single-family residences including the City and other regional water systems. Unfortunately, due to time and cost restrictions, the survey is limited to only providing data in the form of the typical monthly billing amount of each water provider for a single-family residence. This limited comparison does not account for any of the differences that are highly likely to exist among the systems. The City of Arcata currently applies monthly water charges based on meter size and use. While other water agencies use similar metrics, each agency would have developed their own fixed and volumetric rates based on their own cost of service to account for the specific operating, treatment, and infrastructure needs of their water system. Nevertheless, regional surveys can still be used as an informational tool as long as agencies are mindful of the differences that exist in the development of an agency’s water rates.

The following chart comparesthe monthly water bills for a typical single-family home to those of other regional agencies. The City’s current water rates are at the lower end of the range compared to other regional agencies surveyed.

Figure 6: Regional Single Family Residential Water Rate Survey $38.66 $38.73
$47.98
$56.86 $59.57 $61.09 $63.70
$68.31 $69.70 $72.20
$0
$10
$20
$30
$40
$50
$60
$70
$80
Fortuna McKinleyville
CSD
Arcata
Current
Fort Bragg Arcata
Option 2
Humboldt
CSD
Eureka Willits Arcata
Option 1
Ukiah
Single Family Residential Monthly Water Rate Survey
(Average Monthly Use 5 HCF)
Fixed Charge
Variable Charge
HCF = Hundred Cubic Feet = 748 gallons.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 26 |Page While the proposed water rates developed in this study are higher than the existing rates, they are developed to reflect the current cost of service for the City’s water system. It is also important to note that many of the agencies included in the survey are facing similar financial pressures and are either in the middle of multi-year rate increases or are anticipating raising rates in upcoming years.

7.2 Water Summary and Recommendations
The water enterprise is facing the need to increase rate revenues in order to 1) have revenues exceed expenses and not need financial support from the Wastewater Fund and 2) have revenues to fund capital and 3) qualify for financing and grants to reduce the burden on the City’s rate payers.

BWA has the following recommendations for the water enterprise:
• The approved loan from the Wastewater Fund is not sufficient to fund the capital projects that are under way. BWA recommends implementing rate increases at the beginning of 2026 to support issuing bonds for $9.5 million to be used for refunding the wastewater enterprise and maintaining prudent reserves. Without securing additional financing, the water fund reserves are expected to drop to $500,000 which is imprudent and will have a significant impact on the ability of the enterprise to borrow funds in the future. • The City should raise water rates in an amount large enough to pay for operating expenses, capital projects and to maintain prudent reserves.
• After the water enterprise’s finances are stabilized, BWA recommends the City continue to adopt consistent, incremental increases to prevent the need for larger, one-time rate increases. • When adopting new rates, BWA recommends the City adopt the recommended rate structure changes to bring the water enterprise’s rates into greater compliance with Prop. 218.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 27 |Page 8 WASTEWATER FINANCES & CASH FLOW PROJECTIONS

8.1 Wastewater Financial Overview
Bartle Wells Associates conducted an independent evaluation of the wastewater enterprise finances.

Key observations include:
• The wastewater enterprise is in overall good financial health but will need rate increases to keep revenues in line with rising costs and to cash fund needed capital improvements. • The City projects capital expenses of $51.4 million from FY 2025-26 through FY 2029-30. • Projected grant funding for Capital projects from FY 2025-26 through FY 2029-30 is $26.5 million.

BWA developed long-term cash flow projections to determine the wastewater enterprise’s annual revenue requirements and project required wastewater rate revenue increases. The financial projections incorporate the latest information available as well as reasonable and slightly conservative assumptions.

8.2 Wastewater Financial Plan Assumptions
Assumptions were developed based on input from City Staff, historical escalation factors, and conservative projections for future escalation factors to reasonably ensure that the maximum rates adopted by the City will provide sufficient revenues to support the City’s water operations. Key information and assumptions include:

Reserves
• BWA recommends the City maintain prudent fund reserves. BWA recommends the wastewater enterprise maintain one year of operating expenses in reserves for cash flow and liquidity purposes in case of revenue loss/interruption, and to be able to cover costs during unforeseen emergencies.

Fund reserves will fluctuate based on the timing of revenues and expenses, but the proposed rates are projected to provide the wastewater enterprise sufficient fund reserves. At a minimum, the wastewater enterprise should aim to hold at least three months of operating expenses in reserve.

Revenue Assumptions
• The wastewater enterprise is projected to begin FY 2025-26 with $14.5 million in reserves. • BWA did not escalate revenues for miscellaneous non-rate wastewater revenues in its projections.

Recommended rates are the maximum rates the City can adopt, which is why BWA uses conservative estimates when making revenue projections. • As new construction can be unpredictable, BWA did not escalate revenues for growth, connection charges, or building permit revenue in its projections. Recommended rates are the maximum rates

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 28 |Page the City can adopt, which is why BWA uses conservative estimates when making revenue projections.
• Interest income is estimated based on projected reserve levels. Future projections are estimated based on conservative interest earning estimate of 2.0%. Actual interest amounts will vary based on reserves and future interest earning rates.
• Projected grant funding for Capital projects from FY 2025-26 through FY 2029-30 is $26.5 million.

Expense Assumptions
• Operating and maintenance costs are based on the FY 2025-2026 budget and include updated estimates developed with the help of City Staff.
• General operating and capital cost inflation is projected to escalate at an annual rate of 4% in FY 2026-2027 and at an annual rate of 4% thereafter. This is a conservative estimate to account for future cost inflation and is based on recent and historic inflation. • The Wastewater Enterprise will need to cash fund at least $16.9 million in capital spending in the next five years.
• The wastewater enterprise does not have any outstanding debt. Debt service projections are based on projected issuances of new debt. The financial plan assumes the issuance of $8 million in FY 2028-29 to fund critical wastewater treatment facility and system improvement projects.

8.3 Financial Plan Drivers
The City is anticipating a number of financial challenges that will require rate increases in upcoming years. Key drivers of future rate increases are:

Ongoing Cost Inflation
The City’s wastewater enterprise faces ongoing operating cost inflation due to annual increases in a range of expenses including staffing, utilities, insurance, supplies, etc. On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with cost inflation and prevent rates from falling behind the cost of providing service. Historically, inflation consistently hovered between 2% and 3%. Currently, inflation has mostly normalized after forty-year highs, but remains near 3%. Given the recent volatility, BWA designed the inflation projections to be slightly conservative to leave the City in a strong financial position while not driving excessive rate increases.

Capital Improvement Needs & Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its wastewater system which requires a steady stream of repair, improvement, and replacement projects. Accounting for construction cost inflation, the City has identified approximately $51.4 million of capital improvement projects over the next 5 years.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 29 |Page There are two critical upcoming capital projects for the wastewater system. The first major project is the Arcata Wastewater Treatment Facility (AWTF) project. The AWTF is located in close proximity to the Humboldt Bay and is at increased risk for flooding events, sea level rise, and other environmental catastrophes such as severe storms, earthquakes, and tsunamis. The AWTF project includes major facility infrastructure upgrades and enhancements to the existing levee protecting the facility’s structural and operational integrity. The second major upcoming capital project is the sewer inflow and infiltration (I&I) reduction project which aims to reduce sewer overflow events by identifying and replacing leaky, undersized, and unlined sewer pipes. This study assumes the City will finance the majority of project costs by issuing new debt. While the recommended rate increases ensure the City will meet its new debt servicing requirements, it is important to note that the additional debt servicing will impact the City’s ability to use future wastewater revenues to fund other ongoing wastewater projects.

The following table shows the projected capital funding sources for the next five years.

Table 19. Capital Funding Sources
Capital Improvement Projects 2025-26 2026-27 2027-28 2028-29 2029-30 Projected Projected Projected Projected Projected
Total Project Cost
(Inflation $) $12,000,000 $5,902,000 $11,610,000 $9,436,000 $12,470,000 Capital Funding $12,000,000 $5,902,000 $11,610,000 $9,436,000 $12,470,000 Grants $11,500,000 $5,000,000 $10,000,000 $0 $0
Use of New Debt Proceeds 0 0 0 4,000,000 4,000,000
Cash Funded $500,000 $902,000 $1,610,000 $5,436,000 $8,470,000

8.4 Wastewater Cash Flow Projections
Long-term cash flow projections were developed based on the assumptions and key drivers of future rate increases described above. The projections were used to determine the wastewater utility’s annual revenue requirements and project required wastewater rate revenue increases. The long-term cash flow projections incorporate the latest information available from the City’s budget, annual reports, capital spending projections, flow data, as well as a number of reasonable assumptions developed with input from the City. The overall rate revenue increases are designed to fund the City’s cost of providing service, maintain roughly balanced budgets, maintain healthy debt service coverage, and maintain prudent reserves.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 30 |Page The projections indicate the need for rate increases. Actual impacts to customers wastewater bills will vary based on demand and wastewater strength, due to the outcome of the updated cost-of-service analysis. In future years, the City can re-evaluate its finances and revenue requirements and adjust rates as needed based on updated projections. However, while the City always has the flexibility to implement rate adjustments that are lower than adopted, pursuant to Proposition 218, future rates cannot exceed adopted increases without going through the Proposition 218 process again.

The following figure shows cash flow projections incorporating the assumptions described above.

Figure 7: Projected Wastewater Revenues & Expenses
The rate projections shown on the following table are designed to fund the City’s cost of providing service while maintaining balanced budgets and building prudent minimal levels of fund reserves each year.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 31 |Page Table 20. Projected Wastewater Revenues & Expenses
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30
Proposed Rate Increase 0.0% 0.0% 5.0% 5.0% 5.0%
Beginning Fund Balance $14,554,148 $13,899,822 $13,925,486 $11,218,753 $9,133,986

REVENUES
Rate Revenues
Current Wastewater Rates $8,800,000 $8,800,000 $8,800,000 $9,240,000 $9,702,000 Proposed Rates 0 0 440,000 462,000 485,100
Total Rate Revenues $8,800,000 $8,800,000 $9,240,000 $9,702,000 $10,187,100 Non-Rate Revenues
Interest on Pooled Cash2 $291,083 $277,996 $378,510 $400,455 $344,426 Connection Fees 750,000 100,000 100,000 100,000 100,000 Water Loan Repayment 99,167 3,500,000 0 0 0
Other Revenues ($23,800) ($33,800) ($33,800) ($33,800) ($33,800) Total Non-Rate Revenues $1,116,450 $3,844,196 $444,710 $466,655 $410,626 Total Revenues $9,916,450 $12,644,196 $9,684,710 $10,168,655 $10,597,726

EXPENDITURES
Total O&M $6,570,775 $6,716,532 $6,977,458 $7,248,550 $7,530,206 Loan to Water Fund 3,500,000 0 0 0 0
Existing Debt Service 0 0 0 0 0
New Debt Service 0 0 0 285,542 571,085
Rate Funded Capital $500,000 $902,000 $1,610,000 $5,436,000 $8,470,000 Total Expenditures $10,570,775 $7,618,532 $8,587,458 $12,970,093 $16,571,291 Net Revenue ($654,325) $5,025,664 $1,097,252 ($2,801,438) ($5,973,565) Ending Fund Balance $13,899,822 $18,925,486 $20,022,738 $17,221,300 $11,247,736 Debt Service Coverage N/A N/A N/A 10.23 5.37
1, Reflects rates effective February 1, 2026, and July 1 each year thereafter. 2, 2% earnings on fund balance.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 32 |Page 9 WASTEWATER COST OF SERVICE ANALYSIS AND RATE

DERIVATION

9.1 Wastewater Cost of Service Rate Derivation Process
BWA derived updated wastewater rates that account for both a) the overall rate increases identified in the financial projections, and b) proposed rate structure modifications. The proposed rates are designed to equitably apportion and recover costs from the City’s customer base. The basic methodology used to develop new rates includes the steps summarized in the figure below.

Figure 8: Wastewater Cost of Service Analysis and Rate Derivation Process Estimate Wastewater Flow & Strength Loadings
Wastewater flow volume, Biochemical Oxygen Demand (BOD) concentrations, and Total Suspended Solids (TSS) concentrations were determined for each customer class.

Allocate Cost to Functional Component
Each cost was allocated to function: fixed (per customer), flow, BOD, and TSS.

Derive Unit Rates for Functional Components Based on FY 25/26 Revenue Divide costs allocated for recovery from functional components by allocation units to derive unit costs for functional components.

Determine FY 25/26 Rate Revenue Requirements by Customer Classes Multiply functional unit rates by the billing units associated with each functional component for each customer class to determine the revenue requirement of each class.

Residential Rate Derivation
Fixed and volumetric portions of the
residential revenue requirement were
identified. Rates were derived for single
family residences by dividing the total
revenue requirement allocated by the total
number of residential units.

Commercial Rate Derivation
Fixed and volumetric portions of the commerical revenue requirement were identified by customer class. Fixed rates were derived based on the identified fixed portion of the revenue requirement divided by the number of customers in each class.

Volumetric rates were derived to recover the remaining revenue requirement divided by the projected demand flows and
estimated wastewater strength of each class.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 33 |Page

9.2 Customer Flows and Loadings
Estimated flows and loadings of each customer class are based on analysis of recent annual water consumption data by fiscal year and wastewater strength assignments for each customer class. • Single Family Residential flows per unit are based on the average winter water use per unit.

Residential wastewater strength concentrations are based on estimates previously published by the State Water Resources Control Board (SWRCB), adjusted for water conservation, City specific demands, and input from City Staff.
• Commercial flows are estimated based on projected water use. A return to sewer factor (RTS) is applied to adjust water use to estimated flows into the wastewater system. Wastewater strength assumptions for the customer classes are based on the type of customers grouped in each class.

The resulting flow and strength projections for all wastewater customer classes are shown on the following tables. These projections provide the basis for allocating costs and deriving equitable wastewater rates for each customer class.

Table 21. Wastewater Flows
Customer Class Accounts Units HCF MG5 GPD6
(hcf per EDU) 2 (hcf) 3 (%)
Residential
Single-Family 4,949 4,949 4.00 237,552 100% 237,552 178 486,853 Multi-Family 98 1,352 3.20 51,917 100% 51,917 39 106,401 Commercial
Low 381 91,116 80% 72,893 55 149,390
Medium 136 84,100 80% 67,280 50 137,887
High 48 16,115 80% 12,892 10 26,422
Total 5,612 442,533 331 906,954
Est. Mo Flow1
Projected
Water Use Flow Factor4
Projected Wastewater Flow

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 34 |Page Table 22. Wastewater Strength Loadings
Projected
Wastewater Flow Strength (mg/l)1 Loadings (lbs)
Customer Class GPD BOD2 TSS3 BOD TSS Annual Bills
(mg/l) (mg/l) (lbs) (lbs) (#)
Residential
Single-Family 486,853 300 300 444,973 444,973 59,388
Multi-Family 106,401 300 300 97,248 97,248 16,224
Commercial
Low 149,390 200 200 91,026 91,026 4,572
Medium 137,887 300 300 126,026 126,026 1,632
High 26,422 600 600 48,299 48,299 576
Total 906,954 807,572 807,572 82,392
1 State Water Resource Control Board (SWRCB) Guidelines for Wastewater Agencies. 2 "BOD" stands for biochemical oxygen demand.
3 "TSS" stands for total suspended solids.

9.3 Cost of Service Analysis
There must be a cost-based nexus between the revenue requirement from the cash flow and the proposed rates. This section describes the steps BWA took to determine the rate revenue requirement need from each customer class that is proportional to their cost of service.

9.3.1 Cost Allocation Rate Revenue Requirements
Cost allocation categories are groupings of the wastewater enterprise’s non-rate revenues and expenses that are then allocated to the utility’s functional components (Fixed, Flow, BOD & TSS, described in the next section).

To ensure the rates derived for the next five years are proportional to the costs, the amounts in the allocation categories are based on an average of the projected revenues and expenses for the next five years. The expenses are reduced by non-rate revenues to determine the amount in each cost allocation category that needs to be funded by rates and then dividing each functional component’s revenue requirements by the allocations units most reasonably related to each function.

Related expenses were grouped into the following cost allocation categories before being allocated to each functional category:
• Collection – Expenses in this category are related to the wastewater collection system. These costs are largely driven by the volume of wastewater flow.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 35 |Page • Treatment – Expenses in this category are related to wastewater treatment. These costs are largely driven by the volume and strength of wastewater flows.
• Debt Service – Expenses in this category reflect annual debt service payments. Expenses in this category are allocated to the flow and strength functional components based on the blend of capital collection and treatment projects.
• Capital – Expenses in this category reflect costs for capital projects. These costs are largely driven by the volume of wastewater flow and also impacted by the number of connections to the system.

Expenses in this category are allocated to the fixed and flow and strength functional components based on the blend of capital collection and treatment projects.

9.3.2 Functional Allocation
The purpose of the functional allocation is to determine the portion of rate revenues needed to support each function of the wastewater system. A functional component reflects a grouping of the utility’s expenses whose magnitude is driven by the quantity of a specific unit-of-measure. For example, costs allocated to the flow functional component are driven by the volume of wastewater flows.

The functional components used in this study are as follows:
• Fixed – Costs related to providing service to each customer were allocated to this functional component. These costs are related to the number of customers served by the City. • Flow – Costs related to system flows were allocated to this functional component. These costs are related to the volume of wastewater flows.
• BOD – Costs related to treating biochemical oxygen demand are allocated to this functional component. These costs are allocated related to the pounds of BOD loadings treated. • TSS – Costs related to treating total suspended solids are allocated to this functional component.

These costs are allocated related to the pounds of TSS loadings treated.

Wastewater system costs net of non-rate revenues are assigned to each allocation category for rate revenue recovery via the functional cost components of fixed, flow, BOD, and TSS. While there is no single correct approach for cost allocation, BWA believes that costs should be allocated within a reasonable range that reflects both a) underlying cost causation, to the extent such causation can reasonably be determined or estimated, and b) the policy preferences of the agency in cases where a range of reasonable approaches can be justified. This process is intended to proportionately allocate costs to each functional component to determine the revenue requirement for each component. The allocations to each functional component were based on input from City staff.

The following table shows a breakdown of the wastewater utility’s expenses and offsetting revenues i.e., the revenue recovery needed from rates for each cost category allocated by function. The proportional allocation is then applied to the rate revenue requirement so that the rates are

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 36 |Page proportional to the cost of service provided. The result of this allocation is the percent of the revenue requirement associated with each functional allocation category.

Table 23. Rate Revenue Requirements by Functional Components Wastewater Cost Component 5-Year Average Fixed Flow BOD TSS Operating Costs
Collection $2,251,662 10% 85% 5% 5%
Treatment 4,757,043 10% 30% 30% 30%
Non-Operating Costs
Debt Service 85,663 0% 33% 33% 33%
Cash-Funded Capital Spending 3,383,600 10% 85% 5% 5%
Sources
Connection Fees (230,000) 10% 85% 5% 5%
Use of Reserves (661,282) 10% 85% 5% 5%
Functional Allocation $ $9,586,685 $950,102 $5,488,049 $1,692,866 $1,692,866 Functional Allocation % 7.44% 57.25% 17.66% 17.66%
Revenue Requirement $8,800,000 $654,402 $5,037,699 $1,553,949 $1,553,949 Approximately $644,000 of the wastewater utility’s costs are fixed expenses that do not vary with changes in customer flow and strength characteristics.

9.3.3 Functional Component Unit Costs
The table below calculates the unit rates for each cost component by function. The wastewater rate revenue requirements from the prior table for each functional component are divided by the units related to each function.

Table 24. Functional Component Unit Costs
Allocation Units Flow BOD TSS Fixed
(hcf) (lbs) (lbs) (per bill)
Demand Units 442,533 807,572 807,572 82,392
Revenue Requirement $5,037,699 $1,553,949 $1,553,949 $654,402 Functional Unit Rates $11.38 $1.92 $1.92 $7.94

9.3.4 Rate Revenue Requirements by Customer Class
The total revenue requirement for each customer class is calculated by multiplying the unit rate for each functional cost component by the units related to each function.

The table below details the units related to each function for each customer class.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 37 |Page Table 25. Functional Allocation Units by Class
Allocation Units Flow BOD TSS Annual Bills
(hcf) (lbs) (lbs) (#)
Residential
Single-Family 237,552 444,973 444,973 59,388
Multi-Family 51,917 97,248 97,248 16,224
Commercial
Low Strength 72,893 91,026 91,026 4,572
Medium Strength 67,280 126,026 126,026 1,632
High Strength 12,892 48,299 48,299 576
The table below details the total revenue requirements by functional cost component for each customer class.

Table 26. Total Functional Rate Revenue Requirements by Class Revenue
Requirements Flow BOD TSS
Variable
Revenue
Requirement
Fixed
Revenue
Requirement
Total
Revenue
Requirement
(hcf) (lbs) (lbs) ($)
Residential
Single-Family $2,704,237 $856,227 $856,227 $4,416,692 $471,692 $4,888,384 Multi-Family $591,009 $187,128 $187,128 $965,264 $128,860 $1,094,124 Commercial
Low Strength $829,792 $175,155 $175,155 $1,180,102 $36,313 1,216,415 Medium Strength $765,899 $242,502 $242,502 $1,250,903 $12,962 1,263,865 High Strength $146,763 $92,937 $92,937 $332,637 $4,575 337,212

9.4 Rate Derivation
This section describes how rates for each customer sub-class are derived to reflect the proportional cost of providing wastewater service.

9.4.1 Current Residential Rates
Currently the residential rate class applies to only single-family residential customers which are charged a monthly fixed rate and a volumetric rate.

Monthly Fixed Service Charge
This charge applies to all active services for single-family residences. It recovers the rate revenue requirement on a per customer basis.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 38 |Page Volumetric Charges
These charges apply to every unit of monthly water use. There are no use charges for the first four HCF of water use. After the first four units of use per month, the City adjusts for potential irrigation by establishing a monthly sewer cap for each customer. The cap reflects residential sewer flow charges based on water consumption during the winter months (February-April), the period when single family residential customers typically do not have high outdoor water use. The amount a customer is billed in each of the following summer months (June-September), the period when outdoor water use is likely, is based on their usage up to their cap to reflect the lesser of their winter use or actual water use. Essentially, the cap adjusts for irrigation use by setting the maximum units of use that a singlefamily residence will be charged during the period when outdoor water use is likely. There is no irrigation adjustment made to non-summer months (October-January).

9.4.2 Residential Rate Structure Recommendations
BWA reviewed the City’s residential wastewater rates and water demands and has the following recommendations to improve proportionality:

1. Remove all volumetric charges for single-family wastewater customers; and

2. Establish a fixed monthly rate for all single-family wastewater customers

3. Establish a multi-family class with a fixed monthly rate for all residential wastewater customers with more than one dwelling unit on a per dwelling unit basis; and

4. Charge any outside city customers the same rates charged to inside city customers.

9.4.3 Residential Rate Derivation
The total revenue requirements for single-family and multi-family customer classes were calculated above. The monthly rates are derived by dividing the revenue requirements by the number of dwelling unit bills (dwelling units x 12 months). The following table details the calculation for residential wastewater rates.

Table 27. Residential Rate Derivation
Residential Rate
Derivation
Revenue
Requirement
Annual
Bills
Reallocated
FY 2024/25 Rate
($) (#) ($ per bill)
Single-Family $4,888,384 59,388 $82.31
Multi-Family $1,094,124 16,224 $67.44

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 39 |Page

9.4.4 Current Commercial Rates
Customers in this class are grouped into three different subclasses based on their strength and flow characteristics.

Monthly Fixed Service Charge
This charge applies to all active commercial customers. It recovers the revenue requirement on a per customer basis.

Volumetric Charges
These charges apply to every unit of monthly water use. There are no use charges for the first four HCF of water use. After the first four units of use per month, customers are charged a quantity rate per HCF based on estimated wastewater discharge characteristics.

9.4.5 Commercial Rate Structure Recommendations
BWA reviewed the City’s commercial wastewater rates and has the following recommendations to improve compliance with the requirements of Proposition 218:

1. Set a minimum monthly fixed service charge for each customer subclass based on the minimum fixed costs of each subclass.

2. Charge any outside city customers the same rates charged to inside city customers.

9.4.6 Customer Class Rate Derivation
The total revenue requirement for this class is calculated above. The fixed revenue recovery was set to reflect the fixed costs identified for each customer subclass.

The remaining portion of the revenue requirement was allocated proportionally, based on the wastewater system allocation to flow, BOD and TSS. The volumetric unit cost per HCF is calculated based on strength estimates and the flow, BOD and TSS unit costs for each commercial customer subclass. Volumetric costs are adjusted by the estimated return to sewer factor for each sub-class, this adjustment is necessary to account for the estimated sewer discharge of commercial customers based on year-round water use data, which includes some water use that does not enter the sewer system.

The following table displays the derivation of commercial wastewater rates.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 40 |Page Table 28. Commercial Rate Derivation
Commercial Class
Rate Units
Variable Revenue
Requirement Units Unit Rate
Minimum Charge
Monthly Charge
per Connection
($) (HCF) ($ per unit) (Up to 4 HCF)
Low Strength $1,180,102 91,116 $12.95 $51.81
Medium Strength 1,250,903 84,100 14.87 59.50
High Strength 332,637 16,115 20.64 82.56
Commercial Fixed
Rate Derivation
Minimum Charge
Monthly Charge
per Connection Fixed Unit Cost
Total Monthly
Fixed Charge
(per monthly bill) (per monthly bill) (per monthly bill) Low Strength $51.81 $7.94 $59.75
Medium Strength $59.50 $7.94 $67.44
High Strength $82.56 $7.94 $90.51
Volumetric Rev
Requirements
Minimum Charge
per Bill
Annual
Bills
Revenue From
Minimum Charge
Remaining
Variable Revenue
Requirement
Demand
>4 HCF
Variable
Rate
(Up to 4 HCF) (#) (HCF) (per HCF >4)
Low Strength $51.81 4,572 $236,860.44 $943,241.09 79,199 $11.91 Medium Strength $59.50 1,632 $97,097.61 $1,153,805.11 79,060 $14.59 High Strength $82.56 576 $47,556.93 $285,080.10 14,087 $20.24

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 41 |Page

9.5 Recommended Wastewater Rates
The recommended rates incorporate some modifications to the City’s wastewater rate structure designed to align rates with the current cost of providing service and reflect policy input provided by the City. Due to these modifications, impacts to wastewater bills will vary based on customer class and water use when the first-year proposed rates are implemented.

The following table shows a 5-year schedule of recommended wastewater rates.

Table 29. Proposed Wastewater Rates
Wastewater User 2025/26 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Current Proposed Proposed Proposed Proposed Proposed
Residential - Fixed Monthly Rate per Unit
Single Family $77.61 $82.31 $82.31 $86.43 $90.75 $95.29 Multi-Family n/a 67.44 67.44 70.81 74.35 78.07
Residential - Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater Than 4 HCF Single Family $11.34 $0.00 $0.00 $0.00 $0.00 $0.00
Commercial - Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater Than 4 HCF Low Strength $9.88 $11.91 $11.91 $12.51 $13.13 $13.79
Medium Strength 12.01 14.59 14.59 15.32 16.09 16.89
High Strength 20.14 20.24 20.24 21.25 22.31 23.43
Commercial - Minimum Monthly Fixed Rate per Connection
Low Strength $81.05 $47.64 $47.64 $50.02 $52.52 $55.15
Medium Strength 81.05 58.38 58.38 61.29 64.36 67.58
High Strength 81.05 80.95 80.95 84.99 89.24 93.71

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 42 |Page 10 WASTEWATER SUMMARY AND RECOMMENDATIONS

10.1 Regional Wastewater Rate Survey
BWA conducted a survey of current wastewater rates for single-family residences including the City and other regional wastewater systems. Unfortunately, due to time and cost restrictions, the survey is limited to only providing data in the form of the typical monthly billing amount of each wastewater provider for a single-family residence. This limited comparison does not account for any of the differences that are highly likely to exist among the systems. The City of Arcata currently applies monthly wastewater charges based on customer and flow and strength characteristics. While other wastewater agencies use similar metrics, each agency would have developed their own fixed and volumetric rates based on their own cost of service to account for the specific operating, treatment, and infrastructure needs of their wastewater system. Nevertheless, regional surveys can still be used as an informational tool as long as agencies are mindful of the differences that exist in the development of an agency’s wastewater rates.

The following chart compares the monthly wastewater bills for a typical single-family home to those of other regional agencies.

Figure 9: Regional Single Family Residential Wastewater Rate Survey While the proposed wastewater rates developed in this study are higher than the existing rates, they are developed to reflect the current cost of service for the City’s wastewater system. It is also important to note that many of the agencies included in the survey are facing similar financial

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 43 |Page pressures and are either in the middle of multi-year rate increases or are anticipating raising rates in upcoming years.

10.2 Wastewater Summary and Recommendations
The wastewater enterprise is facing the need to increase rate revenues in order to 1) have revenues exceed expenses and 2) have revenues to fund capital and 3) qualify for financing and grants to reduce the burden on the City’s rate payers.

BWA has the following recommendations for the wastewater enterprise:
• Modify the wastewater rate structure to improve proportionality and administrative efficiency. • The City should raise wastewater rates in an amount large enough to pay for operating expenses, capital projects and to maintain prudent reserves. • After the wastewater enterprise’s finances are stabilized, BWA recommends the City continue to adopt consistent, incremental increases to prevent the need for larger, one-time rate increases.
• When adopting new rates, BWA recommends the City adopt the recommended rate structure changes to bring the wastewater enterprise’s rates into greater compliance with Prop. 218.

Bartle Wells Associates
City of Arcata – 2025 Water and Wastewater Rate Study 44 |Page 11 CONCLUSION & RECOMMENDATIONS
In conclusion, the City's water and wastewater utilities will need rate increases in upcoming years to provide adequate funding for high-priority capital improvement needs and keep rates aligned with escalating costs of operations. The proposed 5-year schedule of rates are designed to recover the costs of providing service while supporting roughly balanced budgets in future years.

Many other regional agencies are facing similar financial challenges with cost inflation and the need to increase investment in aging infrastructure and are also anticipating rate increases in upcoming years.

General rate recommendations for the utilities include:
• BWA recommends the City adopt the proposed rates as soon as possible. • The City should update the water and wastewater financial projections within the next five years to evaluate funding needs and rate increases in subsequent years. • After the proposed rates are implemented, the City should continue to adopt annual rate increases to keep revenues in line with the cost of providing service and minimize the need for larger, periodic rate spikes.

APPENDIX A
Water and Wastewater
Rate Study Tables

Preliminary Draft Tables
City of Arcata
Water COS Rate Study Draft (No Phase-In)

09.24.25

Table 1
City of Arcata
Water COS Rate Study Draft 09.24.25
Historical Rates
Volume Charges ($/hcf) 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 All Usage $6.74 $6.84 $6.94 $7.05 $7.15 $7.15
Monthly Fixed Charges ($/meter) 1
Meter Size
5/8" and 3/4" $11.52 $11.70 $11.87 $12.05 $12.23 $12.23 1" 19.24 19.53 19.83 20.12 20.43 20.43
1 1/2" 38.37 38.95 39.53 40.13 40.73 40.73
2" 61.42 62.34 63.28 64.23 65.19 65.19
3" 115.24 116.97 118.72 120.50 122.31 122.31
4" 192.10 194.98 197.91 200.87 203.89 203.89
6" 384.08 389.85 395.69 401.63 407.65 407.65
8" 614.56 623.78 633.13 642.63 652.27 652.27
10" 883.52 896.77 910.22 923.88 937.74 937.74
1, Fixed monthly charges for customers located outside of city limits subject to 1.5x cost factor.

Table 2
City of Arcata
Water COS Rate Study Draft 09.24.25
Customer Characteristics
Meter Size Total Meters
AWWA
Capacity Factor
Equivalent Demand
Units (EDUs)
Annual
EDUs
5/8" 5,540 1.00 5,540 66,480
3/4" 429 1.00 429 5,148
1" 359 1.67 600 7,194
1 1/2" 71 3.33 236 2,837
2" 192 5.33 1,023 12,280
3" 31 10.00 310 3,720
4" 8 16.67 133 1,600
6" 10 33.33 333 4,000
8" 1 53.33 53 640
10" 1 76.67 77 920
Totals 6,642 8,735 104,820

Table 3
City of Arcata
Water COS Rate Study Draft 09.24.25
Demand
Annual Consumption 2022-2023 2023-2024 2024-2025 2025-20261 Actual Actual Estimated Projected
Total Water Use (hcf) 620,540 596,621 606,996 590,000
1, Projected based on average annual consumption history.

Table 4
City of Arcata
Water COS Rate Study Draft 09.24.25
O&M Expense Projections
Escalation Factor Allocation
Category
Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Water Purchases Water 5.5% 5.5% 5.5% 5.5%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
Actual Estimated Projected Projected Projected Projected Projected 63 - Water System Maintenance
Regular Salaries Administration General $427,420 $515,635 $529,163 $550,330 $572,343 $595,236 $619,046 Overtime Wages Administration General 6,728 9,403 10,000 10,400 10,816 11,249 11,699 Part-time & Temporary Salaries Administration General 17,540 17,959 25,000 26,000 27,040 28,122 29,246 Other Employee Benefits Administration General 440,908 307,085 350,000 364,000 378,560 393,702 409,450 Training & Conferences Administration General 6,402 3,968 9,000 9,360 9,734 10,124 10,529 Clothing & Personal Expenses Administration General 1,950 603 2,000 2,080 2,163 2,250 2,340 Memberships & Dues Administration General 1,041 4,806 20,000 20,800 21,632 22,497 23,397 Other Professional Services Maintenance General 15,781 6,938 20,000 20,800 21,632 22,497 23,397 Insurance Administration General 192,661 251,078 305,000 317,200 329,888 343,084 356,807 Janitorial & Household Supplies Administration General 403 311 700 728 757 787 819 Cement Gravel Sand & Asphalt Maintenance General 40,951 25,882 80,000 55,000 57,200 59,488 61,868 Pipes Valves & Fittings Maintenance General 143,377 108,317 95,000 98,800 102,752 106,862 111,137 Other Department Supplies Administration General 7,514 7,423 9,000 9,360 9,734 10,124 10,529 Small Tools Maintenance General 5,976 7,400 7,500 7,800 8,112 8,436 8,774 Equipment Maintenance Maintenance General 19,459 (432) 20,000 20,800 21,632 22,497 23,397 Central Garage Charges Administration General 109,436 146,136 125,897 130,933 136,170 141,617 147,282 Equipment Rental Maintenance General 780 0 1,000 1,040 1,082 1,125 1,170 IT Services & Maintenance Administration General 22,432 13,649 21,622 22,487 23,386 24,322 25,295 Overhead Administration General 243,492 255,970 265,200 275,808 286,840 298,314 310,246 Tech Subscription Interest Administration General 248 0 0 0 0 0 0 AmortizeTech Subscript Lial Administration General ($1,173) $0 $0 $0 $0 $0 $0 Subtotal $1,703,328 $1,682,132 $1,896,082 $1,943,725 $2,021,474 $2,102,333 $2,186,427

Table 4
City of Arcata
Water COS Rate Study Draft 09.24.25
O&M Expense Projections
Escalation Factor Allocation
Category
Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Water Purchases Water 5.5% 5.5% 5.5% 5.5%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
Actual Estimated Projected Projected Projected Projected Projected 64 - Water Treatment & Distribution
Regular Salaries Administration General $517,466 $581,448 $617,154 $641,840 $667,514 $694,214 $721,983 Overtime Wages Administration General 9,084 13,569 15,000 15,600 16,224 16,873 17,548 Part-time & Temporary Salaries Administration General 27,592 22,058 26,000 27,040 28,122 29,246 30,416 Other Employee Benefits Administration General 322,620 344,133 400,000 416,000 432,640 449,946 467,943 Utilities Utilities General 85,338 82,742 85,000 88,400 91,936 95,613 99,438 Training & Conferences Administration General 8,418 12,545 10,470 10,889 11,324 11,777 12,248 Clothing & Personal Expenses Administration General 8,594 7,855 9,650 10,036 10,437 10,855 11,289 Memberships & Dues Administration General 11,022 11,919 16,740 17,410 18,106 18,830 19,583 Lab Testing & Analysis Water Treatment General 4,390 2,627 6,000 6,240 6,490 6,749 7,019 Other Professional Services Water Treatment General 139,544 33,261 73,770 76,721 79,790 82,981 86,300 Other Planning Services Water Treatment General 0 0 0 0 0 0 0 Taxes & Other Fees Administration General 26,404 32,658 33,750 35,100 36,504 37,964 39,483 Insurance Administration General 169,724 218,836 270,000 280,800 292,032 303,713 315,862 Haz Mat Response Team Water Treatment General 2,350 2,709 3,400 3,536 3,677 3,825 3,978 Postage Administration General 15,343 20,869 21,000 21,840 22,714 23,622 24,567 Photocopy Administration General 0 0 50 52 54 56 58
Office Supplies Administration General 1,359 1,606 2,000 2,080 2,163 2,250 2,340 Bank Service Charges Administration General 61,894 63,048 68,000 70,720 73,549 76,491 79,550 Chemicals & Lab Supplies Water Treatment General 7,340 21,315 25,000 26,000 27,040 28,122 29,246 Janitorial & Household Supplies Administration General 1,021 1,052 1,000 1,040 1,082 1,125 1,170 Purchase Of Water Water Purchases Water 1,580,080 1,604,848 1,725,000 1,819,875 1,919,968 2,025,566 2,136,973 Other Department Supplies Administration General 5,610 4,074 6,000 6,240 6,490 6,749 7,019 Small Tools Water Treatment General 5,996 3,711 4,000 4,160 4,326 4,499 4,679 Fuels & Lubricants Water Treatment General 0 0 250 260 270 281 292 Equipment Maintenance Maintenance General 62,223 45,867 75,000 78,000 81,120 84,365 87,739 Building/Grounds Maintenance Maintenance General 67,460 80,667 125,000 130,000 135,200 140,608 146,232 Central Garage Charges Administration General 38,276 28,622 69,262 72,032 74,914 77,910 81,027 IT Services & Maintenance Administration General 31,759 43,355 73,268 76,199 79,247 82,417 85,713 Overhead Administration General $568,152 $597,270 $618,800 $643,552 $669,294 $696,066 $723,908 Subtotal $3,779,059 $3,882,663 $4,380,564 $4,581,662 $4,792,226 $5,012,715 $5,243,607 Total Water Expenses $5,482,387 $5,564,794 $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033

Table 5
City of Arcata
Water COS Rate Study Draft 09.24.25
Non-Rate Revenue Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 3.5% 3.5% 3.5% 3.5%
Interest Rate Interest 2.0% 2.0% 2.0% 2.0%
Fund 661 - Water Enterprise
Actual Estimated Projected Projected Projected Projected Projected Investment Earnings1
Interest Interest $474,907 $339,035 $183,584 $138,702 $154,910 $181,774 $182,544 Water Service - Jacoby Creek Administration None 3,839 2,009 3,800 3,800 3,800 3,800 3,800 Non Payment Penalty Administration None 58,060 68,234 65,000 65,000 65,000 65,000 65,000 Change of Service Charges Administration None 61,303 63,253 65,000 65,000 65,000 65,000 65,000 Connection Fees Capital None 177,238 150,765 680,000 100,000 100,000 100,000 100,000 Double-check Valve Administration None 36,496 42,574 35,000 35,000 35,000 35,000 35,000 Private Fire Protection Administration None 31,048 31,916 35,000 35,000 35,000 35,000 35,000 Reimbursement Revenue Administration None 719 0 0 0 0 0 0 Operating Transfers Administration General ($100,000) $969,750 ($110,000) ($113,850) ($117,835) ($121,959) ($126,228) Total NonRate Water Revenues $743,610 $1,667,536 $957,384 $328,652 $340,875 $363,615 $360,116 1, Projected based on 2% earnings on fund balance.

Table 6
City of Arcata
Water COS Rate Study Draft 09.24.25
Capital Improvement Plan
Capital Improvement Projects
(Current $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected Citywide Steel waterline
replacement $0 $0 $10,089,000 $0 $0 $7,500,000 $7,500,000 Plunkett Waterline
Improvements 0 0 1,441,000 0 0 0 0
Water Meters & Registers 0 0 0 0 0 0 0
Tank 4 Rehabilitation 0 0 210,000 400,000 0 0 0
Tank 1D in Zone 1 0 0 0 0 0 2,500,000 2,500,000
Tank Rehab 0 0 0 0 0 0 0
Alliance Intertie Electrical
System Replacement 0 0 200,000 0 0 0 0
Booster Pump Station 0 0 0 0 0 0 0
Ongoing Capital Maintenance 0 0 150,000 150,000 150,000 150,000 150,000 Other $40,777 $1,266,134 $0 $0 $0 $0 $0
Total Project Cost (Current $) $40,777 $1,266,134 $12,090,000 $550,000 $150,000 $10,150,000 $10,150,000 Capital Improvement Projects
(Inflation $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected Citywide Steel waterline
replacement $0 $0 $10,089,000 $0 $0 $8,400,000 $8,700,000 Plunkett Waterline
Improvements 0 0 1,441,000 0 0 0 0
Water Meters & Registers 0 0 0 0 0 0 0
Tank 4 Rehabilitation 0 0 210,000 416,000 0 0 0
Tank 1D in Zone 1 0 0 0 0 0 2,800,000 2,900,000
Tank Rehab 0 0 0 0 0 0 0
Alliance Intertie Electrical
System Replacement 0 0 200,000 0 0 0 0
Booster Pump Station 0 0 0 0 0 0 0
Ongoing Capital Maintenance 0 0 150,000 156,000 162,000 168,000 174,000 Other $40,777 $1,266,134 $0 $0 $0 $0 $0
Total Project Cost (Inflation $) $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000

$12.1
$0.6
$0.2
$11.4
$11.8
$0
$2
$4
$6
$8
$10
$12
$14
25-26 26-27 27-28 28-29 29-30
Millions
City of Arcata
Water System Improvement Projects
Distribution System All Other

Table 7
City of Arcata
Water COS Rate Study Draft 09.24.25
Capital Funding Sources
Capital Improvement Projects 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Projected Projected Projected Projected Projected Total Project Cost (Inflation $) $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Capital Funding $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Grants $0 $0 $0 $0 $0 $0 $0
Use of New Debt Proceeds 0 0 9,100,000 400,000 0 10,000,000 10,000,000 Cash Funded $40,777 $1,266,134 $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Debt Service
Total Debt Service 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected 2015 Bond $138,356 $138,804 $139,089 $138,562 $138,551 $139,028 $138,666 Interfund Loan1
0 0 99,167 0 0 0 0
New Debt2
$0 $0 $261,250 $670,853 $670,853 $1,369,227 $2,067,602
Total Debt Service $138,356 $138,804 $499,506 $809,415 $809,404 $1,508,255 $2,206,268 Proposed Borrowing
Net Proceeds Needed $9,500,000 $20,000,000
Repayment Term (yrs) 30 30
Interest Rate 5.50% 5.50%
Issuance Costs $250,000 $300,000
Total Debt Issue Size $9,750,000 $20,300,000
Prorated Debt Service Payment - Current Yr. Only $261,250 $698,375 Annual Debt Service Payment (rounded) $670,853 $1,396,749 Total Proposed Annual Water Debt Service $261,250 $670,853 $670,853 $1,369,227 $2,067,602 1 - Interfund loan provided for Steel Water Line Replacement Project from Fund 662 Wastewater. 2 - Includes interfund loan refinancing.

Table 8
City of Arcata
Water COS Rate Study Draft 09.24.25
Cash Flow
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30
Proposed Revenue Increase 44.0% 0.0% 10.0% 10.0% 8.0%
Growth 0.0% 0.0% 0.0% 0.0% 0.0%
Beginning Reserve Balance $9,179,175 $6,935,088 $7,745,508 $9,088,705 $9,127,187

REVENUES
Rate Revenues
Current Rate Revenue $5,547,618 $7,988,570 $7,988,570 $8,787,426 $9,666,169 Revenue from Rate Increases 2,440,952 0 798,857 878,743 773,294 Timing adjustment 1 ($1,423,889)
Total Rate Revenues $6,564,681 $7,988,570 $8,787,426 $9,666,169 $10,439,463 Non-Rate Revenues
Connection Fees $680,000 $100,000 $100,000 $100,000 $100,000 Other Revenues 93,800 89,950 85,965 81,841 77,572
Interest on Pooled Cash 2
$183,584 $138,702 $154,910 $181,774 $182,544
Total Non-Rate Revenues $957,384 $328,652 $340,875 $363,615 $360,116 Total Revenue $7,522,064 $8,317,221 $9,128,302 $10,029,784 $10,799,579

EXPENDITURES
Total O&M $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033 Existing Debt Service 139,089 138,562 138,551 139,028 138,666 New Debt Service 261,250 670,853 670,853 1,369,227 2,067,602 Interfund Loan 99,167 0 0 0 0
Rate Funded Capital $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Total Expenditures $9,766,152 $7,506,802 $7,785,104 $9,991,303 $11,410,301 Net Revenue ($2,244,087) $810,420 $1,343,198 $38,481 ($610,722) Ending Fund Balance $6,935,088 $7,745,508 $9,088,705 $9,127,187 $8,516,465 Debt Service Coverage 2.49 2.21 2.86 1.93 1.53
1, Reflects rates effective February 1, 2026, and July 1 each year thereafter. 2, 2% earnings on fund balance.

$0
$2
$4
$6
$8
$10
$12
2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Millions
City of Arcata
Projected Water Revenues & Expenses
O&M Debt Service Cash Funded Capital
Revenue Reserves

Table 9
City of Arcata
Water COS Rate Study Draft 09.24.25
Functional Allocation
5-Year Average
Allocation Category Expenses
Less Non-Rate
Revenue
Revenue
Requirement Capacity All Volume
As All
Other Total
Administration $4,258,016 $85,826 $4,172,190 40% 60% 100% Maintenance 434,812 0 434,812 25% 75% 100%
Utilities 92,077 0 92,077 10% 90% 100%
Water Purchases 1,925,476 0 1,925,476 0% 100% 100%
Water Treatment 121,781 0 121,781 0% 100% 100%
Interest 0 168,303 (168,303) 0% 0% 100% 100%
Debt Service 1,103,134 0 1,103,134 15% 85% 100%
Capital 1,293,200 216,000 1,077,200 15% 85% 100%
Functional Allocation $ $2,113,837 $6,812,834 n/a $8,926,671 Functional Allocation % 23.68% 76.32% n/a 100.00%
Revenue Requirement $1,313,677 $4,233,941 $5,547,618

Table 10
City of Arcata
Water COS Rate Study Draft 09.24.25
Rate Derivation
Allocation Units Capacity All Volume
Unit of Measure EDU CCF
Allocation Units 104,820 590,000
Revenue Requirement $1,313,677 $4,233,941
Unit Cost ($/Unit) $12.53 $7.18
Meter Size AWWA Capacity Ratio
Monthly
Fixed Charge
5/8" 1.00 $12.53
3/4" 1.00 $12.53
1" 1.67 $20.93
1 1/2" 3.33 $41.73
2" 5.33 $66.80
3" 10.00 $125.33
4" 16.67 $208.92
6" 33.33 $417.72
8" 53.33 $668.37
10" 76.67 $960.88

Table 11
City of Arcata
Water COS Rate Study Draft 09.24.25
Proposed Rates
Volumetric
Rates ($/hcf) 2025/26 2/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Current Proposed Proposed Proposed Proposed Proposed
All Usage $7.15 $10.33 $10.33 $11.37 $12.50 $13.50
Monthly Fixed
Charges 2025/26 2/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Current Proposed Proposed Proposed Proposed Proposed
Meter Size
5/8" and 3/4" $12.23 $18.05 $18.05 $19.85 $21.84 $23.58 1" $20.43 $30.14 $30.14 $33.15 $36.47 $39.39
1 1/2" $40.73 $60.10 $60.10 $66.11 $72.72 $78.53
2" $65.19 $96.19 $96.19 $105.81 $116.39 $125.70
3" $122.31 $180.47 $180.47 $198.52 $218.37 $235.84
4" $203.89 $300.85 $300.85 $330.93 $364.02 $393.14
6" $407.65 $601.51 $601.51 $661.66 $727.83 $786.05
8" $652.27 $962.45 $962.45 $1,058.70 $1,164.57 $1,257.73 10" $937.74 $1,383.67 $1,383.67 $1,522.04 $1,674.24 $1,808.18

Preliminary Draft Tables
City of Arcata
Water COS Rate Study
(Phased-In) -
Draft 09.24.25

Table 1
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Historical Rates
Volume Charges ($/hcf) 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 All Usage $6.74 $6.84 $6.94 $7.05 $7.15 $7.15
Monthly Fixed Charges ($/meter) 1
Meter Size
5/8" and 3/4" $11.52 $11.70 $11.87 $12.05 $12.23 $12.23 1" 19.24 19.53 19.83 20.12 20.43 20.43
1 1/2" 38.37 38.95 39.53 40.13 40.73 40.73
2" 61.42 62.34 63.28 64.23 65.19 65.19
3" 115.24 116.97 118.72 120.50 122.31 122.31
4" 192.10 194.98 197.91 200.87 203.89 203.89
6" 384.08 389.85 395.69 401.63 407.65 407.65
8" 614.56 623.78 633.13 642.63 652.27 652.27
10" 883.52 896.77 910.22 923.88 937.74 937.74
1, Fixed monthly charges for customers located outside of city limits subject to 1.5x cost factor.

Table 2
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Customer Characteristics
Meter Size Total Meters
AWWA
Capacity Factor
Equivalent Demand
Units (EDUs)
Annual
EDUs
5/8" 5,540 1.00 5,540 66,480
3/4" 429 1.00 429 5,148
1" 359 1.67 600 7,194
1 1/2" 71 3.33 236 2,837
2" 192 5.33 1,023 12,280
3" 31 10.00 310 3,720
4" 8 16.67 133 1,600
6" 10 33.33 333 4,000
8" 1 53.33 53 640
10" 1 76.67 77 920
Totals 6,642 8,735 104,820

Table 3
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Demand
Annual Consumption 2022-2023 2023-2024 2024-2025 2025-20261 Actual Actual Actual Projected
Total Water Use (hcf) 620,540 596,621 606,996 590,000
1, Projected based on average annual consumption history.

Table 4
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
O&M Expense Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Water Purchases Water 5.5% 5.5% 5.5% 5.5%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
Actual Estimated Projected Projected Projected Projected Projected 63 - Water System Maintenance
Regular Salaries Administration General $427,420 $515,635 $529,163 $550,330 $572,343 $595,236 $619,046 Overtime Wages Administration General 6,728 9,403 10,000 10,400 10,816 11,249 11,699 Part-time & Temporary Salaries Administration General 17,540 17,959 25,000 26,000 27,040 28,122 29,246 Other Employee Benefits Administration General 440,908 307,085 350,000 364,000 378,560 393,702 409,450 Training & Conferences Administration General 6,402 3,968 9,000 9,360 9,734 10,124 10,529 Clothing & Personal Expenses Administration General 1,950 603 2,000 2,080 2,163 2,250 2,340 Memberships & Dues Administration General 1,041 4,806 20,000 20,800 21,632 22,497 23,397 Other Professional Services Maintenance General 15,781 6,938 20,000 20,800 21,632 22,497 23,397 Insurance Administration General 192,661 251,078 305,000 317,200 329,888 343,084 356,807 Janitorial & Household Supplies Administration General 403 311 700 728 757 787 819 Cement Gravel Sand & Asphalt Maintenance General 40,951 25,882 80,000 55,000 57,200 59,488 61,868 Pipes Valves & Fittings Maintenance General 143,377 108,317 95,000 98,800 102,752 106,862 111,137 Other Department Supplies Administration General 7,514 7,423 9,000 9,360 9,734 10,124 10,529 Small Tools Maintenance General 5,976 7,400 7,500 7,800 8,112 8,436 8,774 Equipment Maintenance Maintenance General 19,459 (432) 20,000 20,800 21,632 22,497 23,397 Central Garage Charges Administration General 109,436 146,136 125,897 130,933 136,170 141,617 147,282 Equipment Rental Maintenance General 780 0 1,000 1,040 1,082 1,125 1,170 IT Services & Maintenance Administration General 22,432 13,649 21,622 22,487 23,386 24,322 25,295 Overhead Administration General 243,492 255,970 265,200 275,808 286,840 298,314 310,246 Tech Subscription Interest Administration General 248 0 0 0 0 0 0 AmortizeTech Subscript Lial Administration General ($1,173) $0 $0 $0 $0 $0 $0 Subtotal $1,703,328 $1,682,132 $1,896,082 $1,943,725 $2,021,474 $2,102,333 $2,186,427

Table 4
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
O&M Expense Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Water Purchases Water 5.5% 5.5% 5.5% 5.5%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
Actual Estimated Projected Projected Projected Projected Projected 64 - Water Treatment & Distribution
Regular Salaries Administration General $517,466 $581,448 $617,154 $641,840 $667,514 $694,214 $721,983 Overtime Wages Administration General 9,084 13,569 15,000 15,600 16,224 16,873 17,548 Part-time & Temporary Salaries Administration General 27,592 22,058 26,000 27,040 28,122 29,246 30,416 Other Employee Benefits Administration General 322,620 344,133 400,000 416,000 432,640 449,946 467,943 Utilities Utilities General 85,338 82,742 85,000 88,400 91,936 95,613 99,438 Training & Conferences Administration General 8,418 12,545 10,470 10,889 11,324 11,777 12,248 Clothing & Personal Expenses Administration General 8,594 7,855 9,650 10,036 10,437 10,855 11,289 Memberships & Dues Administration General 11,022 11,919 16,740 17,410 18,106 18,830 19,583 Lab Testing & Analysis Water TreatmentGeneral 4,390 2,627 6,000 6,240 6,490 6,749 7,019 Other Professional Services Water TreatmentGeneral 139,544 33,261 73,770 76,721 79,790 82,981 86,300 Other Planning Services Water TreatmentGeneral 0 0 0 0 0 0 0 Taxes & Other Fees Administration General 26,404 32,658 33,750 35,100 36,504 37,964 39,483 Insurance Administration General 169,724 218,836 270,000 280,800 292,032 303,713 315,862 Haz Mat Response Team Water TreatmentGeneral 2,350 2,709 3,400 3,536 3,677 3,825 3,978 Postage Administration General 15,343 20,869 21,000 21,840 22,714 23,622 24,567 Photocopy Administration General 0 0 50 52 54 56 58
Office Supplies Administration General 1,359 1,606 2,000 2,080 2,163 2,250 2,340 Bank Service Charges Administration General 61,894 63,048 68,000 70,720 73,549 76,491 79,550 Chemicals & Lab Supplies Water TreatmentGeneral 7,340 21,315 25,000 26,000 27,040 28,122 29,246 Janitorial & Household Supplies Administration General 1,021 1,052 1,000 1,040 1,082 1,125 1,170 Purchase Of Water Water Purchases Water 1,580,080 1,604,848 1,725,000 1,819,875 1,919,968 2,025,566 2,136,973 Other Department Supplies Administration General 5,610 4,074 6,000 6,240 6,490 6,749 7,019 Small Tools Water TreatmentGeneral 5,996 3,711 4,000 4,160 4,326 4,499 4,679 Fuels & Lubricants Water TreatmentGeneral 0 0 250 260 270 281 292 Equipment Maintenance Maintenance General 62,223 45,867 75,000 78,000 81,120 84,365 87,739 Building/Grounds Maintenance Maintenance General 67,460 80,667 125,000 130,000 135,200 140,608 146,232 Central Garage Charges Administration General 38,276 28,622 69,262 72,032 74,914 77,910 81,027 IT Services & Maintenance Administration General 31,759 43,355 73,268 76,199 79,247 82,417 85,713 Overhead Administration General $568,152 $597,270 $618,800 $643,552 $669,294 $696,066 $723,908 Subtotal $3,779,059 $3,882,663 $4,380,564 $4,581,662 $4,792,226 $5,012,715 $5,243,607 Total Water Expenses $5,482,387 $5,564,794 $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033

Table 5
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Non-Rate Revenue Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 3.5% 3.5% 3.5% 3.5%
Interest Rate Interest 2.0% 2.0% 2.0% 2.0%
Fund 661 - Water Enterprise
Actual Estimated Projected Projected Projected Projected Projected Investment Earnings1
Interest Interest $474,907 $339,035 $183,584 $128,993 $133,990 $155,386 $151,683 Water Service - Jacoby Creek Administration None 3,839 2,009 3,800 3,800 3,800 3,800 3,800 Non Payment Penalty Administration None 58,060 68,234 65,000 65,000 65,000 65,000 65,000 Change of Service Charges Administration None 61,303 63,253 65,000 65,000 65,000 65,000 65,000 Connection Fees Capital None 177,238 150,765 680,000 100,000 100,000 100,000 100,000 Double-check Valve Administration None 36,496 42,574 35,000 35,000 35,000 35,000 35,000 Private Fire Protection Administration None 31,048 31,916 35,000 35,000 35,000 35,000 35,000 Reimbursement Revenue Administration None 719 0 0 0 0 0 0 Operating Transfers Administration General ($100,000) $969,750 ($110,000) ($113,850) ($117,835) ($121,959) ($126,228) Total NonRate Water Revenues $743,610 $1,667,536 $957,384 $318,943 $319,955 $337,227 $329,255 1, Projected based on 2% earnings on fund balance.

Table 6
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Capital Improvement Plan
Capital Improvement Projects
(Current $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected Citywide Steel waterline
replacement $0 $0 $10,089,000 $0 $0 $7,500,000 $7,500,000 Plunkett Waterline
Improvements 0 0 1,441,000 0 0 0 0
Water Meters & Registers 0 0 0 0 0 0 0
Tank 4 Rehabilitation 0 0 210,000 400,000 0 0 0
Tank 1D in Zone 1 0 0 0 0 0 2,500,000 2,500,000
Tank Rehab 0 0 0 0 0 0 0
Alliance Intertie Electrical
System Replacement 0 0 200,000 0 0 0 0
Booster Pump Station 0 0 0 0 0 0 0
Ongoing Capital Maintenance 0 0 150,000 150,000 150,000 150,000 150,000 Other $40,777 $1,266,134 $0 $0 $0 $0 $0
Total Project Cost (Current $) $40,777 $1,266,134 $12,090,000 $550,000 $150,000 $10,150,000 $10,150,000 Capital Improvement Projects
(Inflation $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected Citywide Steel waterline
replacement $0 $0 $10,089,000 $0 $0 $8,400,000 $8,700,000 Plunkett Waterline
Improvements 0 0 1,441,000 0 0 0 0
Water Meters & Registers 0 0 0 0 0 0 0
Tank 4 Rehabilitation 0 0 210,000 416,000 0 0 0
Tank 1D in Zone 1 0 0 0 0 0 2,800,000 2,900,000
Tank Rehab 0 0 0 0 0 0 0
Alliance Intertie Electrical
System Replacement 0 0 200,000 0 0 0 0
Booster Pump Station 0 0 0 0 0 0 0
Ongoing Capital Maintenance 0 0 150,000 156,000 162,000 168,000 174,000 Other $40,777 $1,266,134 $0 $0 $0 $0 $0
Total Project Cost (Inflation $) $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000

$12.1
$0.6 $0.2
$11.4 $11.8
$0
$2
$4
$6
$8
$10
$12
$14
25-26 26-27 27-28 28-29 29-30
Millions
City of Arcata
Water System Improvement Projects
Distribution System All Other

Table 7
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Capital Funding Sources
Capital Improvement Projects 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected Total Project Cost (Inflation $) $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Capital Funding $40,777 $1,266,134 $12,090,000 $572,000 $162,000 $11,368,000 $11,774,000 Grants $0 $0 $0 $0 $0 $0 $0
Use of New Debt Proceeds 0 0 9,100,000 400,000 0 10,000,000 10,000,000 Cash Funded $40,777 $1,266,134 $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Debt Service
Total Debt Service 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Actual Estimated Budgeted Projected Projected Projected Projected 2015 Bond $138,356 $138,804 $139,089 $138,562 $138,551 $139,028 $138,666 Interfund Loan1
0 0 99,167 0 0 0 0
New Debt2
$0 $0 $261,250 $670,853 $670,853 $1,369,227 $2,067,602
Total Debt Service $138,356 $138,804 $499,506 $809,415 $809,404 $1,508,255 $2,206,268 Proposed Borrowing
Net Proceeds Needed $9,500,000 $20,000,000
Repayment Term (yrs) 30 30
Interest Rate 5.50% 5.50%
Issuance Costs $250,000 $300,000
Total Debt Issue Size $9,750,000 $20,300,000
Prorated Debt Service Payment - Current Yr. Only $261,250 $698,375 Annual Debt Service Payment (rounded) $670,853 $1,396,749 Total Proposed Annual Water Debt Service $261,250 $670,853 $670,853 $1,369,227 $2,067,602 1 - Interfund loan provided for Steel Water Line Replacement Project from Fund 662 Wastewater. 2 - Includes interfund loan refinancing.

Table 8
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Cash Flow
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30
Proposed Revenue Increase 23.0% 18.0% 12.0% 10.0% 10.0% Growth 0.0% 0.0% 0.0% 0.0% 0.0%
Beginning Reserve Balance $9,179,175 $6,449,671 $6,699,504 $7,769,277 $7,584,132

REVENUES
Rate Revenues
Current Rate Revenue $5,547,618 $6,823,570 $8,051,812 $9,018,030 $9,919,833 Revenue from Rate Increases 1,275,952 1,228,243 966,217 901,803 991,983 Timing adjustment 1 ($744,305) ($614,121) ($483,109) ($450,901) ($495,992) Total Rate Revenues $6,079,264 $7,437,691 $8,534,921 $9,468,931 $10,415,824 Non-Rate Revenues
Connection Fees $680,000 $100,000 $100,000 $100,000 $100,000 Other Revenues 93,800 89,950 85,965 81,841 77,572
Interest on Pooled Cash 2
$183,584 $128,993 $133,990 $155,386 $151,683
Total Non-Rate Revenues $957,384 $318,943 $319,955 $337,227 $329,255 Total Revenue $7,036,648 $7,756,635 $8,854,876 $9,806,158 $10,745,080

EXPENDITURES
Total O&M $6,276,646 $6,525,387 $6,813,700 $7,115,048 $7,430,033 Existing Debt Service 139,089 138,562 138,551 139,028 138,666 New Debt Service 261,250 670,853 670,853 1,369,227 2,067,602 Interfund Loan 99,167 0 0 0 0
Rate Funded Capital $2,990,000 $172,000 $162,000 $1,368,000 $1,774,000 Total Expenditures $9,766,152 $7,506,802 $7,785,104 $9,991,303 $11,410,301 Net Revenue ($2,729,504) $249,833 $1,069,772 ($185,145) ($665,221) Ending Fund Balance $6,449,671 $6,699,504 $7,769,277 $7,584,132 $6,918,910 Debt Service Coverage 1.52 1.52 2.52 1.78 1.50
1, Reflects rates effective February 1, 2026, and January 1 each year thereafter. 2, 2% earnings on fund balance.

$0
$2
$4
$6
$8
$10
$12
2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Millions
City of Arcata
Projected Water Revenues & Expenses
O&M Debt Service Cash Funded Capital
Revenue Reserves

City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Preliminary Draft Tables

Table 9
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Functional Allocation
5-Year Average
Allocation Category Expenses
Less Non-Rate
Revenue
Revenue
Requirement Capacity All Volume
As All
Other Total
Administration $4,258,016 $85,826 $4,172,190 40% 60% 100% Maintenance 434,812 0 434,812 25% 75% 100%
Utilities 92,077 0 92,077 10% 90% 100%
Water Purchases 1,925,476 0 1,925,476 0% 100% 100%
Water Treatment 121,781 0 121,781 0% 100% 100%
Interest 0 150,727 (150,727) 0% 0% 100% 100%
Debt Service 1,103,134 0 1,103,134 15% 85% 100%
Capital 1,293,200 216,000 1,077,200 15% 85% 100%
Functional Allocation $ $2,113,837 $6,812,834 n/a $8,926,671 Functional Allocation % 23.68% 76.32% n/a 100.00%
Revenue Requirement $1,313,677 $4,233,941 $5,547,618

Table 10
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Rate Derivation
Allocation Units Capacity All Volume
Unit of Measure EDU CCF
Allocation Units 104,820 590,000
Revenue Requirement $1,313,677 $4,233,941
Unit Cost ($/Unit) $12.53 $7.18
Meter Size AWWA Capacity Ratio
Monthly
Fixed Charge
5/8" 1.00 $12.53
3/4" 1.00 $12.53
1" 1.67 $20.93
1 1/2" 3.33 $41.73
2" 5.33 $66.80
3" 10.00 $125.33
4" 16.67 $208.92
6" 33.33 $417.72
8" 53.33 $668.37
10" 76.67 $960.88

Table 11
City of Arcata
Water COS Rate Study (Phased-In) - Draft 09.24.25
Proposed Rates
Volumetric
Rates ($/hcf) 2025/26 2/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030 Current Proposed Proposed Proposed Proposed Proposed
All Usage $7.15 $8.83 $10.42 $11.67 $12.83 $14.12
Monthly Fixed
Charges 2025/26 2/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030 Current Proposed Proposed Proposed Proposed Proposed
Meter Size
5/8" and 3/4" $12.23 $15.42 $18.19 $20.37 $22.41 $24.65 1" $20.43 $25.74 $30.38 $34.02 $37.42 $41.17
1 1/2" $40.73 $51.33 $60.57 $67.84 $74.63 $82.09
2" $65.19 $82.16 $96.95 $108.59 $119.45 $131.39
3" $122.31 $154.15 $181.90 $203.73 $224.10 $246.51
4" $203.89 $256.97 $303.23 $339.61 $373.58 $410.93
6" $407.65 $513.79 $606.27 $679.03 $746.93 $821.62
8" $652.27 $822.10 $970.07 $1,086.48 $1,195.13 $1,314.64 10" $937.74 $1,181.89 $1,394.63 $1,561.98 $1,718.18 $1,890.00

Table 1
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Current Rates
Fixed Monthly Base Rate ($/account) 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Residential $54.99 $60.49 $66.54 $71.86 $77.61 $77.61
Commercial $57.43 $63.17 $69.49 $75.05 $81.05 $81.05
Volume Rates ($/hcf) Units1
Residential 4+ hcf $8.04 $8.44 $9.73 $10.50 $11.34 $11.34 Commercial
Low Strength 4+ hcf $7.00 $7.70 $8.47 $9.15 $9.88 $9.88 Medium Strength 4+ hcf $8.51 $9.36 $10.30 $11.12 $12.01 $12.01 High Strength 4+ hcf $14.27 $15.70 $17.27 $18.65 $20.14 $20.14 1, One hudred cubic feet (HCF) = 748 gallons

Table 2
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
O&M Expense Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
65 - Wastewater Collection
Actual Estimated Budget Projected Projected Projected Projected Regular Salaries Collection Personnel $418,037 $481,388 $506,123 $523,837 $542,172 $561,148 $580,788 Overtime Wages Collection Personnel 6,525 14,161 13,500 13,973 14,462 14,968 15,492 Part-time & Temporary Salaries Collection Personnel 27,902 29,556 45,089 46,667 48,300 49,991 51,741 Other Employee Benefits Collection General 469,715 311,320 345,000 358,800 373,152 388,078 403,601 Training & Conferences Collection General 11,910 6,121 12,000 12,480 12,979 13,498 14,038 Clothing & Personal Expenses Collection General 2,011 2,489 6,000 6,240 6,490 6,749 7,019 Memberships & Dues Collection General 3,509 1,549 6,000 6,240 6,490 6,749 7,019 Other Technical Services Collection General 4,961 11,841 14,000 14,560 15,142 15,748 16,378 Other Professional Services Collection General 15,821 16,222 25,000 26,000 27,040 28,122 29,246 Insurance Collection General 183,487 236,580 303,000 315,120 327,725 340,834 354,467 Property Liability Expense Collection General 0 5,031 5,000 5,200 5,408 5,624 5,849 Cement Gravel Sand & Asphalt Collection General 24,860 16,012 25,000 26,000 27,040 28,122 29,246 Pipes Valves & Fittings Collection General 3,957 5,274 8,000 8,320 8,653 8,999 9,359 Other Department Supplies Collection General 4,600 9,612 10,000 10,400 10,816 11,249 11,699 Small Tools Collection General 2,333 1,996 4,500 4,680 4,867 5,062 5,264 Equipment Maintenance Collection General 21,559 27,665 35,000 36,400 37,856 39,370 40,945 Central Garage Charges Collection General 268,688 327,130 273,700 284,648 296,034 307,875 320,190 Equipment Rental Collection General 1,670 0 3,000 3,120 3,245 3,375 3,510 IT Services & Maintenance Collection General 19,696 36,034 60,202 62,610 65,114 67,719 70,428 Overhead Collection General $364,040 $377,850 $384,090 $399,454 $415,432 $432,049 $449,331 Subtotal $1,855,282 $1,917,829 $2,084,204 $2,164,749 $2,248,416 $2,335,328 $2,425,611

Table 2
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
O&M Expense Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0.0% 0.0% 0.0% 0.0%
General General 4.0% 4.0% 4.0% 4.0%
Personnel Personnel 3.5% 3.5% 3.5% 3.5%
67 - Wastewater Treatment
Regular Salaries Treatment Personnel $676,432 $768,516 $805,051 $833,228 $862,391 $892,574 $923,815 Overtime Wages Treatment Personnel 9,228 13,250 15,000 15,525 16,068 16,631 17,213 Part-time & Temporary Salaries Treatment Personnel 102,046 92,465 110,000 113,850 117,835 121,959 126,228 Other Employee Benefits Treatment General 426,642 483,363 510,000 530,400 551,616 573,681 596,628 Utilities Treatment General 516,916 569,352 789,928 821,525 854,386 888,562 924,104 Training & Conferences Treatment General 13,081 15,039 18,000 18,720 19,469 20,248 21,057 Clothing & Personal Expenses Treatment General 13,516 11,491 14,995 15,595 16,219 16,867 17,542 Memberships & Dues Treatment General 17,072 18,039 20,000 20,800 21,632 22,497 23,397 Other Technical Services Treatment General 12,382 15,000 30,000 15,600 16,224 16,873 17,548 Engineering Services Treatment General 65,757 66,246 80,000 83,200 86,528 89,989 93,589 Lab Testing & Analysis Treatment General 105,715 104,368 119,538 124,320 129,292 134,464 139,843 Compost/Brush Chipping Treatment General 85,000 80,000 5,000 5,200 5,408 5,624 5,849 Other Professional Services Treatment General 72,870 99,680 175,000 182,000 189,280 196,851 204,725 Legal Consultations Treatment General 561 0 2,000 2,080 2,163 2,250 2,340 Other Consulting Services Treatment General 0 0 100,000 10,000 10,400 10,816 11,249 Taxes & Other Fees Treatment General 46,510 42,298 46,606 48,470 50,409 52,425 54,522 Insurance Treatment General 160,550 207,007 260,000 270,400 281,216 292,465 304,163 Insurance Deductibles Treatment General 0 6,188 0 0 0 0 0 Haz Mat Response Team Treatment General 2,400 2,400 2,400 2,496 2,596 2,700 2,808 Postage Treatment General 27,955 27,993 27,500 28,600 29,744 30,934 32,171 Photocopy Treatment General 2 0 100 104 108 112 117
Office Supplies Treatment General 2,276 2,922 3,000 3,120 3,245 3,375 3,510 Bank Service Charges Treatment General 63,589 63,740 68,000 70,720 73,549 76,491 79,550 Chemicals & Lab Supplies Treatment General 96,211 60,026 108,189 112,517 117,017 121,698 126,566 Janitorial & Household Supplie Treatment General 1,694 1,661 2,600 2,704 2,812 2,925 3,042 Other Department Supplies Treatment General 12,544 21,943 25,000 26,000 27,040 28,122 29,246 Small Tools Treatment General 13,939 4,690 5,000 5,200 5,408 5,624 5,849 Fuels & Lubricants Treatment General 1,796 0 500 520 541 562 585 Equipment Maintenance Treatment General 120,168 138,308 150,000 156,000 162,240 168,730 175,479 Building/Grounds Maintenance Treatment General 48,449 43,154 175,000 182,000 189,280 196,851 204,725 Central Garage Charges Treatment General 89,308 66,888 144,947 150,745 156,775 163,046 169,567 Equipment Rental Treatment General 1,229 0 2,000 2,080 2,163 2,250 2,340 IT Services & Maintenance Treatment General 32,712 78,229 144,497 150,277 156,288 162,539 169,041 Overhead Treatment General 493,052 516,810 526,720 547,789 569,700 592,488 616,188 Subtotal $3,331,599 $3,621,066 $4,486,571 $4,551,784 $4,729,042 $4,913,222 $5,104,595 Total Wastewater Expenses $5,186,881 $5,538,896 $6,570,775 $6,716,532 $6,977,458 $7,248,550 $7,530,206

Table 3
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
NonRate Revenue Projections
Escalation Factor
Allocation
Category Factor 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 No Escalation None 0% 0% 0% 0% 0%
General General 0% 3% 3% 3% 3%
Interest Interest 2% 2% 2% 2% 2%
Growth Growth 0% 0% 0% 0% 0%
Fund 662 - Wastewater Enterprise
Actual Estimated Budgeted Projected Projected Projected Projected Investment Earnings Administration Interest $328,685 $326,823 $291,083 $277,996 $378,510 $400,455 $344,426 Non Payment Penalty Administration None 60,601 83,541 50,000 50,000 50,000 50,000 50,000 Sewer Repair Fee Capital None 11,870 1,150 0 0 0 0 0
Connection Fees Capital None 190,726 233,112 750,000 100,000 100,000 100,000 100,000 FOG Pollution Prevention Treatment None 9,170 8,772 11,500 11,500 11,500 11,500 11,500 Pretreatment Permit Fee Treatment None 3,641 3,683 3,500 3,500 3,500 3,500 3,500 Other Sewer Revenue Administration None 132 60 200 200 200 200 200 Reimbursement Revenue Capital None 122,116 3,721 5,000 5,000 5,000 5,000 5,000 Donations Administration None 9,935 9,860 23,000 13,000 13,000 13,000 13,000 Interpretive Center Sales Administration None 17,473 19,724 18,000 18,000 18,000 18,000 18,000 Operating Transfers Administration None (149,294) (78,750) (135,000) (135,000) (135,000) (135,000) (135,000) Total NonRate Wastewater Revenues $605,055 $611,697 $1,017,283 $344,196 $444,710 $466,655 $410,626

Table 4
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Capital Improvement Plan
Capital Improvement Projects (Current $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 Totals Actual Estimated Budgeted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Pump Upgrades $0 $0 $500,000 $500,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $500,000 Manhole Rehab/Sewer Collection System 0 0 0 175,000 0 175,000 0 175,000 0 175,000 0 175,000 0 875,000 Sewer Inflow & Infiltration Reduction (I&I) 0 0 0 5,000,000 10,000,000 0 0 0 5,000,000 10,000,000 0 0 15,000,000 45,000,000 WWTP Reconfiguration 26,188,243 17,391,383 11,500,000 0 0 0 0 0 0 0 0 0 0 0 Levee Project to protect WWTP 0 0 0 0 0 7,500,000 10,000,000 0 0 0 0 0 0 17,500,000 WWTP Reconfiguration Future Upgrades 0 0 0 0 750,000 750,000 750,000 750,000 500,000 0 0 0 0 3,500,000 WWTP Reconfiguration Construction 0 0 0 0 0 0 0 0 0 0 3,000,000 3,000,000 0 6,000,000 Other $62,708 $464,932 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Project Cost (Current $) $26,250,951 $17,856,315 $12,000,000 $5,675,000 $10,750,000 $8,425,000 $10,750,000 $925,000 $5,500,000 $10,175,000 $3,000,000 $3,175,000 $15,000,000 $73,375,000 Capital Improvement Projects (Inflation $) 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 Totals Actual Estimated Budgeted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Pump Upgrades $0 $0 $500,000 $520,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $520,000 Manhole Rehab/Sewer Collection System 0 0 0 182,000 0 196,000 0 210,000 0 224,000 0 238,000 0 1,050,000 Sewer Inflow & Infiltration Reduction (I&I) 0 0 0 5,200,000 10,800,000 0 0 0 6,200,000 12,800,000 0 0 21,000,000 56,000,000 WWTP Reconfiguration 26,188,243 17,391,383 11,500,000 0 0 0 0 0 0 0 0 0 0 0 Levee Project to protect WWTP 0 0 0 0 0 8,400,000 11,600,000 0 0 0 0 0 0 20,000,000 WWTP Reconfiguration Future Upgrades 0 0 0 0 810,000 840,000 870,000 900,000 620,000 0 0 0 0 4,040,000 WWTP Reconfiguration Construction 0 0 0 0 0 0 0 0 0 0 3,960,000 4,080,000 0 8,040,000 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Project Cost (Inflation $) $26,188,243 $17,391,383 $12,000,000 $5,902,000 $11,610,000 $9,436,000 $12,470,000 $1,110,000 $6,820,000 $13,024,000 $3,960,000 $4,318,000 $21,000,000 $89,650,000

$12.0
$5.9
$11.6
$9.4
$12.5
$1.1
$6.8
$13.0
$4.0 $4.3
$21.0
$0
$5
$10
$15
$20
$25
25-26 26-27 27-28 28-29 29-30 30-31 31-32 32-33 33-34 34-35 35-36 Millions
City of Arcata
Wastewater System Improvement Projects
WWTP All other

Table 5
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Capital Funding Sources
Capital Improvement
Project (CIP) Funding 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 Actual Estimated Budgeted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Total Projected CIP Costs $26,188,243 $17,391,383 $12,000,000 $5,902,000 $11,610,000 $9,436,000 $12,470,000 $1,110,000 $6,820,000 $13,024,000 $3,960,000 $4,318,000 $21,000,000 Capital Funding
Grants $26,188,243 $13,638,137 $11,500,000 $5,000,000 $10,000,000 $0 $0 $0 $0 $0 $0 $0 $0 Use of New Debt Proceeds 0 0 0 0 0 4,000,000 4,000,000 6,000,000 13,000,000 3,000,000 20,000,000 Cash Funded $0 $3,753,246 $500,000 $902,000 $1,610,000 $5,436,000 $8,470,000 $1,110,000 $820,000 $24,000 $960,000 $4,318,000 $1,000,000 Debt Service
Total Debt Service 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 Actual Actual Budgeted Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected New Debt 0 0 0 0 0 285,542 571,085 571,085 1,339,985 2,108,885 2,108,885 2,108,885 2,808,980 Total Debt Service $0 $0 $0 $0 $0 $285,542 $571,085 $571,085 $1,339,985 $2,108,885 $2,108,885 $2,108,885 $2,808,980 New Debt Assumptions
Net Proceeds Needed $8,000,000 $22,000,000 $20,000,000
Repayment Term (yrs) 30 30 30
Interest Rate 5.50% 5.50% 5.50%
Month of Issue 1 1 1
Issuance Costs $300,000 $350,000 $350,000
Total Debt Issue Size $8,300,000 $22,350,000 $20,350,000 Prorated Debt Service Payment - Current Yr. Only $285,542 $768,900 $700,095 Annual Debt Service Payment (rounded) $571,085 $1,537,800 $1,400,190 Total Proposed Annual Wastewater Debt Service $0 $0 $0 $285,542 $571,085 $571,085 $1,339,985 $2,108,885 $2,108,885 $2,108,885 $2,808,980

Table 6
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Cash Flow
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 Proposed Rate Increase 0.0% 0.0% 5.0% 5.0% 5.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Beginning Fund Balance $14,554,148 $13,899,822 $18,925,486 $20,022,738 $17,221,300 $11,247,736 $12,629,552 $13,679,850 $14,903,102 $15,344,981 $12,573,399

REVENUES
Rate Revenues
Current Rate Revenue $8,800,000 $8,800,000 $8,800,000 $9,240,000 $9,702,000 $10,187,100 $10,594,584 $11,018,367 $11,459,102 $11,917,466 $12,394,165 Proposed Rates $0 $0 $440,000 $462,000 $485,100 $407,484 $423,783 $440,735 $458,364 $476,699 $495,767 Total Rate Revenues $8,800,000 $8,800,000 $9,240,000 $9,702,000 $10,187,100 $10,594,584 $11,018,367 $11,459,102 $11,917,466 $12,394,165 $12,889,931 Non-Rate Revenues
Interest Reserves2 $291,083 $277,996 $378,510 $400,455 $344,426 $224,955 $252,591 $273,597 $298,062 $306,900 $251,468 Connection Fees 750,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Water Loan Repayment 99,167 3,500,000 0 0 0 0 0 0 0 0 0 Other Revenues ($23,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) ($33,800) Total Non-Rate Revenues $1,116,450 $3,844,196 $444,710 $466,655 $410,626 $291,155 $318,791 $339,797 $364,262 $373,100 $317,668 Total Revenues $9,916,450 $12,644,196 $9,684,710 $10,168,655 $10,597,726 $10,885,739 $11,337,158 $11,798,899 $12,281,728 $12,767,264 $13,207,599

EXPENDITURES
Total O&M $6,570,775 $6,716,532 $6,977,458 $7,248,550 $7,530,206 $7,822,838 $8,126,875 $8,442,763 $8,770,964 $9,111,961 $9,466,254 Loan to Water Fund 3,500,000 0 0 0 0 0 0 0 0 0 0
Existing Debt Service 0 0 0 0 0 0 0 0 0 0 0
New Debt Service 0 0 0 285,542 571,085 571,085 1,339,985 2,108,885 2,108,885 2,108,885 2,808,980 Rate Funded Capital $500,000 $902,000 $1,610,000 $5,436,000 $8,470,000 $1,110,000 $820,000 $24,000 $960,000 $4,318,000 $1,000,000 Total Expenditures $10,570,775 $7,618,532 $8,587,458 $12,970,093 $16,571,291 $9,503,923 $10,286,860 $10,575,648 $11,839,849 $15,538,846 $13,275,234 Net Revenue ($654,325) $5,025,664 $1,097,252 ($2,801,438) ($5,973,565) $1,381,816 $1,050,299 $1,223,251 $441,879 ($2,771,582) ($67,634) Ending Fund Balance $13,899,822 $18,925,486 $20,022,738 $17,221,300 $11,247,736 $12,629,552 $13,679,850 $14,903,102 $15,344,981 $12,573,399 $12,505,764 Debt Service Coverage N/A N/A N/A 10.23 5.37 5.36 2.40 1.59 1.66 1.73 1.33 1, Reflects rates effective February 1, 2026, and July 1 each year thereafter. 2, 2% earnings on beginning fund balance

$0
$5
$10
$15
$20
$25
2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
Millions
City of Arcata
Projected Wastewater Revenues & Expenses
O&M Debt Service Cash Funded Capital
Reserves Revenue

Table 7
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Functional Allocation
Wastewater Budget 5-Year Average Fixed Flow BOD TSS
Operating Costs
Collection $2,251,662 10% 85% 5% 5%
Treatment 4,757,043 10% 30% 30% 30%
Non-Operating Costs
Debt Service 85,663 0% 33% 33% 33%
Cash-Funded Capital Spending 3,383,600 10% 85% 5% 5%
Sources
Connection Fees (230,000) 10% 85% 5% 5%
Use of Reserves (661,282) 10% 85% 5% 5%
Functional Allocation $ $9,586,685 $950,102 $5,488,049 $1,692,866 $1,692,866 Functional Allocation % 7.44% 57.25% 17.66% 17.66%
Revenue Requirement $8,800,000 $654,402 $5,037,699 $1,553,949 $1,553,949

Table 8
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Flows and Loadings
Customer Class Accounts Units HCF MG5 GPD6 BOD8 TSS9 BOD TSS Annual Bills (hcf per EDU) 2 (hcf) 3 (%) (mg/l) (mg/l) (lbs) (lbs) (#) Residential
Single-Family 4,949 4,949 4.00 237,552 100% 237,552 178 486,853 300 300 444,973 444,973 59,388 Multi-Family 98 1,352 3.20 51,917 100% 51,917 39 106,401 300 300 97,248 97,248 16,224 Commercial
Low 381 91,116 80% 72,893 55 149,390 200 200 91,026 91,026 4,572 Medium 136 84,100 80% 67,280 50 137,887 300 300 126,026 126,026 1,632 High 48 16,115 80% 12,892 10 26,422 600 600 48,299 48,299 576 Total 5,612 442,533 331 906,954 807,572 807,572 82,392
1 Residential flow is based on the City's billing data
2 "EDU" stands for equivalent dwelling unit.
3 "HCF" stands for hundred cubic feet.
4 Flow factor based on estimated flow returning to sewer. 5 "MG" stands for 1,000,000 gallons.
6 "GPD" stands for gallons per day.
7 State Water Resource Control Board (SWRCB) Guidelines for Wastewater Agencies. 8 "BOD" stands for biochemical oxygen demand.
9 "TSS" stands for total suspended solids.

Loadings (lbs)
Est. Mo Flow1
Projected
Water Use Flow Factor4
Projected Wastewater Flow Strength (mg/l) 7

Table 9
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Revenue Requirement by Class
Unit Cost Flow BOD TSS Fixed
(hcf) (lbs) (lbs) (per bill)
Demand Units 442,533 807,572 807,572 82,392
Revenue Requirement $5,037,699 $1,553,949 $1,553,949 $654,402 Unit Rate $11.38 $1.92 $1.92 $7.94
Allocation Units Flow BOD TSS Annual Bills
(hcf) (lbs) (lbs) (#)
Residential
Single-Family 237,552 444,973 444,973 59,388
Multi-Family 51,917 97,248 97,248 16,224
Commercial
Low Strength 72,893 91,026 91,026 4,572
Medium Strength 67,280 126,026 126,026 1,632
High Strength 12,892 48,299 48,299 576
Revenue Requirements Flow BOD TSS
Variable Revenue
Requirement
Fixed Revenue
Requirement
Total Revenue
Requirement
(hcf) (lbs) (lbs) ($)
Residential
Single-Family $2,704,237 $856,227 $856,227 $4,416,692 $471,692 $4,888,384 Multi-Family $591,009 $187,128 $187,128 $965,264 $128,860 $1,094,124 Commercial
Low Strength $829,792 $175,155 $175,155 $1,180,102 $36,313 1,216,415 Medium Strength $765,899 $242,502 $242,502 $1,250,903 $12,962 1,263,865 High Strength $146,763 $92,937 $92,937 $332,637 $4,575 337,212

Table 10
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Residential Rate Derivation
Residential Rate Derivation
Revenue
Requirement Annual Bills
Reallocated
FY 2024/25 Rate
($) (#) ($ per bill)
Single-Family $4,888,384 59,388 $82.31
Multi-Family $1,094,124 16,224 $67.44

Table 11
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Commercial Rate Derivation
Commercial Class
Rate Units
Variable Revenue
Requirement Units Unit Rate
Minimum Charge Monthly
Charge per Connection
($) (HCF) ($ per unit) (Up to 4 HCF)
Low Strength $1,180,102 91,116 $12.95 $51.81
Medium Strength 1,250,903 84,100 14.87 59.50
High Strength 332,637 16,115 20.64 82.56
Commercial Fixed
Rate Derivation
Fixed Monthly Charge per
Connection Fixed Unit Cost
Total Monthly
Fixed Charge
(per monthly bill) (per monthly bill) (per monthly bill) Low Strength $51.81 $7.94 $59.75
Medium Strength $59.50 $7.94 $67.44
High Strength $82.56 $7.94 $90.51
Volumetric Rev
Requirements Fixed Charge Annual Bills
Revenue From
Fixed Charge
Remaining Variable
Revenue Requirement
Demand >4
HCF Variable Rate
(Up to 4 HCF) (#) (HCF) (per HCF >4)
Low Strength $51.81 4,572 $236,860.44 $943,241.09 79,199 $11.91 Medium Strength $59.50 1,632 $97,097.61 $1,153,805.11 79,060 $14.59 High Strength $82.56 576 $47,556.93 $285,080.10 14,087 $20.24

Table 12
City of Arcata
Wastewater Rate Study - DRAFT 1.10.26
Proposed Rates
Wastewater User 2025/26 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Current Proposed Proposed Proposed Proposed Proposed
Residential - Fixed Monthly Rates per Dwelling Unit
Single-Family $77.61 $82.31 $82.31 $86.43 $90.75 $95.29 Multi-Family n/a 67.44 67.44 70.81 74.35 78.07
Residential - Volumetric Rates per Hundred Cubic Feet (hcf) of Water Use Greater Than 4 HCF Single-Family $11.34 $0.00 $0.00 $0.00 $0.00 $0.00
Commercial - Volumetric Rates per Hundred Cubic Feet (hcf) of Water Use Greater Than 4 HCF Low Strength $9.88 $11.91 $11.91 $12.51 $13.13 $13.79
Medium Strength 12.01 14.59 14.59 15.32 16.09 16.89
High Strength 20.14 20.24 20.24 21.25 22.31 23.43
Commercial - Monthly Fixed Rate per Connection
Low Strength $81.05 $47.64 $47.64 $50.02 $52.52 $55.15
Medium Strength 81.05 58.38 58.38 61.29 64.36 67.58
High Strength 81.05 80.95 80.95 84.99 89.24 93.71

ARZ0218A *** 3000000001 00.0000.0001 1/1

AMEJGOGLDLDIBLAKGICK CURRENT RESIDENT

AJEDDAOAFNKPOFPMDHPK AMJPENPFIDCLGLCHGCIK

AAHONJMCHBGPDFAKNOIK AAIOAGICCGIMEMKECKMK
City of Arcata
736 F Street
Arcata, CA 95521

ANENHKENFLDIBLAKGK AJCJHKMBDOGONCIDLK ANIONCJDFNONKAJGOK AEPEAEBHAPFNOEDKDK DDLDDLDLDDLLDDDDDL Important information about your WATER and WASTEWATER account! Notice of Public Hearing on Proposed Water and
Wastewater (Sewer) Rate Increases
Public Hearing: April 15, 2026, Arcata City Hall, 736 F Street, Arcata, CA 95521 Meeting starts at 6:00 p.m.

The City of Arcata (“City”) is proposing water and wastewater (sewer) rate increases over the next five years to support operating and maintenance needs and provide adequate funding for capital improvements that will support safe and reliable utility services. Customers, property owners, and community members are invited to attend the public hearing in person or observe the meeting on Zoom for an opportunity to participate, learn the details of, and comment on the proposed rate changes.

What do water and wastewater rates fund?
The City provides water and wastewater services to residences and businesses in Arcata and the surrounding area.

These utilities are self-supporting and rely on service charge revenue to meet annual funding needs. As such, water and wastewater rates need to be set at levels adequate to fund the costs of providing service. All revenues generated from utility bills are used to maintain and operate the water and wastewater systems and cannot be used for any other purpose. The revenues must be sufficient to meet system costs such as utility staffing, raw water purchases, electricity, treatment, system maintenance, and capital improvement costs.

The proposed rates are based on the 2025 Water and Wastewater Rate Study developed by Bartle Wells Associates independent rate consultants and reflect input from City staff. The proposed rate increases are phased in over the next five years, with the first rate increase scheduled to become effective for services provided on and after May 1, 2026.

Initial bill impacts will vary based on customer class and usage due to rate structure adjustments realigning rates with the cost of service. The rates shown on this Notice are the proposed maximum rates to be authorized. The City will periodically review its financial position to determine the necessary rate increases.

Capital Improvement Needs and Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its water and wastewater systems which requires a steady stream of repair, improvement, and replacement projects. For example, when pipes become weak, damaged, or are simply old, they are in danger of breaking and resulting in failures that can cause property damage and result in expensive emergency repairs. Arcata staff plans for and schedules improvements by strategically identifying pipelines and other critical system infrastructure most in need of repair. The City actively pursues grant funding opportunities to help offset capital improvement costs, whenever available.

How to Learn More:

The City will hold an open house informational meeting at the D Street Neighborhood Center, 1301 D Street, Arcata, CA 95521, on February 25, 2026, at 5:30 p.m. for residents and businesses to come and learn more about the capital improvement plans and how rates were developed for the water and wastewater utilities.

You can also view a copy of the 2025 Water and Wastewater Rate Study at:
https://www.cityofarcata.org/1157/Arcata-2025-Water-and-Wastewater-Rate-St

Note: Outside City customers are currently charged 1.5 times the monthly fixed charge. Going forward, Outside City customers will pay the same as Inside City Customers.

Proposed Maximum Wastewater Rates:

The City is proposing to phase in a series of annual wastewater rate increases over the next five years with the maximum allowable rates as shown on the table below. Wastewater rate increases are needed to support wastewater systems operating expenses, provide adequate funding for maintenance of facilities and equipment, meet annual debt service funding requirements, and help ensure continued compliance with regulatory requirements. The proposed wastewater rates also help support high-priority capital improvements for the aging sewer collection system pipelines, sewer lift stations, and the wastewater treatment plant to support safe and reliable service.

Based on the characteristics of their customer class, and to better align rates with the current cost of service, the City is proposing to transition to a flat, per unit fixed monthly charge for all residential customers and to establish a monthly fixed charge for commercial customers. Initial bill impacts will vary based on customer class and usage due to rate structure adjustments realigning rates with the cost of service. The rates shown on the following page are the proposed maximum rates to be authorized.

Current and Proposed
Water Rates
2025/26
Current
5/1/2026
Proposed
1/1/2027
Proposed
1/1/2028
Proposed
1/1/2029
Proposed
1/1/2030
Proposed
Rate Revenue Increase 23.0% 18.0% 12.0% 10.0% 10.0%
Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use All Water Use $7.15 $8.83 $10.42 $11.67 $12.83 $14.12
Fixed Monthly Rates by Meter Size ($ / meter / month)
Meter Size
5/8” and 3/4" $12.23 $15.42 $18.19 $20.37 $22.41 $24.65 1” 20.43 25.74 30.38 34.02 37.42 41.17
1 ½” 40.73 51.33 60.57 67.84 74.63 82.09
2” 65.19 82.16 96.95 108.59 119.45 131.39
3” 122.31 154.15 181.90 203.73 224.10 246.51
4” 203.89 256.97 303.23 339.61 373.58 410.93
6” 407.65 513.79 606.27 679.03 746.93 821.62
8” 652.27 822.10 970.07 1,086.48 1,195.13 1,314.64
10” 937.74 1,181.89 1,394.63 1,561.98 1,718.18 1,890.00 Proposed Maximum Water Rates:

The City is proposing to phase in a series of annual water rate increases over the next five years with the maximum allowable rates being those shown in the table below. Water rate increases are needed to support water system operating expenses, provide adequate funding for maintenance of facilities and equipment, meet annual debt service funding requirements, keep up with cost inflation, and help ensure continued compliance with regulatory requirements.

The proposed water rates also help support high-priority capital improvements for the aging water system infrastructure to support safe and reliable service.

The components of the proposed water rates are as follows:
• Use Charges: As proposed, all customers will be billed a uniform rate for all water use. Water volumetric charges are billed in units of 100 cubic feet. • Fixed Charges: These charges are levied independently of water use and are based on the size of each customer’s water meter.

ANENHKENFLDIBLAKGK AJCJHKMBDOGONDMBLK ANIOJFGACMPGIFCMKK AHBIIEDJLFHHKBJICK DLLDDLDLDDDLDDDDLL Wastewater User Current
7/1/2026
Proposed
7/1/2027
Proposed
7/1/2028
Proposed
7/1/2029
Proposed
7/1/2030
Proposed
Rate Increase % 0.0% 0.0% 5.0% 5.0% 5.0%
Residential – Fixed Monthly Rates per Dwelling Unit ($ / dwelling / month) Single Family $77.61 $82.31 $82.31 $86.43 $90.75 $95.29 Multi Family n/a 67.44 67.44 70.81 74.35 78.07
Residential – Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater than 4 HCF Single Family $11.34 $0.00 $0.00 $0.00 $0.00 $0.00
Commercial – Volumetric Rates per Hundred Cubic Feet (HCF) of Water Use Greater than 4 HCF Low Strength $9.88 $11.91 $11.91 $12.51 $13.13 $13.79
Medium Strength 12.01 14.59 14.59 15.32 16.09 16.89
High Strength 20.14 20.24 20.24 21.25 22.31 23.43
Commercial – Fixed Monthly Rate per Connection ($ / connection / month) Low Strength $81.05 $47.64 $47.64 $50.02 $52.52 $55.15
Medium Strength 81.05 58.38 58.38 61.29 64.36 67.58
High Strength 81.05 80.95 80.95 84.99 89.24 93.71
Note: Current Single-Family Fixed Monthly Rate includes 4 HCF. Proposed rates are fixed with no volumetric charge. Multi-Family rate applies to residential connections with two or more dwelling units.

Community Input and Written Protest Procedures:

Customers and property owners may submit written protests against the proposed rate increases. Pursuant to California law, protests must be submitted in writing and must a) identify the affected property or properties, such as by service address or Assessor’s Parcel Number, b) include the name and original signature of the customer or property owner submitting the protest, and c) indicate opposition to the proposed rate increases.

The proposed rates cannot be adopted if written protests are received from a majority (more than 50%) of parcels subject to the proposed water and wastewater rates. Written protests can be mailed to City Clerk, City of Arcata, 736 F Street, Arcata, CA 95521 or hand delivered to the City Clerk during the Public Hearing at Arcata City Hall on April 15, 2026. Written protests must be received by the City Clerk before the close of the Public Hearing to be counted. Protests or comments submitted by e-mail, fax or other electronic means are not counted as written protests. One written protest will be counted for each parcel that is mandated to comply with the proposed rates. If there is a majority protest filed from affected properties, the proposed rate changes cannot be imposed.

Pursuant to California Government Code 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fees. This statute of limitations applies to the water and wastewater service charges proposed in the Notice and future changes to water and wastewater rates and charges.

CITY OF ARCATA WATER &

WASTEWATER RATE INCREASES
(FY 2026-2030)

CITY COUNCIL MEETING
FEBRUARY 4, 2025

TONIGHT’S CITY COUNCIL ACTION
AUTHORIZE STAFF TO INITIATE THE PROPOSITION 218 PROCESS FOR PROPOSED RATE

ADJUSTMENTS TO WATER AND WASTEWATER RATES
• KICKS OFF THE CONSTITUTIONALLY MANDATED PUBLIC PROCESS FOR INCREASING UTILITY

RATES, WHICH PROVIDES TRANSPARENCY INTO THE PROPOSED RATE CHANGES AND PROVIDES AN OPPORTUNITY FOR PUBLIC PARTICIPATION IN THE PROCESS. • ACTION DOES NOT APPROVE OR IMPLEMENT RATE CHANGES
• COUNCIL WILL CONSIDER APPROVING THE RATES AT THE PUBLIC HEARING ON 4.15.26

WHY INCREASE WATER RATES?

CRITICAL CAPITAL NEEDS
• $36 M OVER NEXT 5 YEARS
• CURRENT STEEL WATER LINE REPLACEMENT
WITH OCT. 2026 PROJECT COMPLETION
• FY 2028-29 STEEL WATER LINE REPLACEMENT

PROJECT
• RECENTLY COMPLETED PLUNKETT ROAD WATER

LINE REPLACEMENT
• BUILD TANK 1D WITH UP TO 2-MILLIONGALLON CAPACITY FOR MUCH NEEDED WATER

STORAGE
• BUILDS EMERGENCY RESILIENCY

OPERATING NEEDS
• CURRENT REVENUE DOES NOT SUPPORT:
• CURRENT COST OF PROVIDING WATER SERVICE
• REPAYMENT OF WASTEWATER LOAN
• FUTURE DEBT SERVICE FOR CRITICAL CAPITAL
NEEDS
• RESTORING ADEQUATE OPERATING RESERVES
• RECEIVING OUTSIDE GRANTS AND LOW

INTEREST LOANS

WHAT ABOUT WASTEWATER RATES?

CRITICAL CAPITAL NEEDS
• $51.4 M OVER NEXT 5 YEARS
• UNLIKE WATER FUND, OFFSET BY $26.5 M

GRANT FUNDING
• EST 6-30-2026 COMPLETION OF PHASE I

AWTF IMPROVEMENT PROJECT
• FUTURE LEVEE PROJECT FOR AWTF

ADAPTATION FOR SEA LEVEL RISE
• PHASE II IMPROVEMENT PROJECT
• FY 2027 INFLOW & INFILTRATION

REDUCTION PROJECT (I&I)

OPERATING NEEDS
• CURRENT REVENUES AND OPERATING

RESERVES SUFFICIENT
• 5% INCREASES IN 2028, 2029 AND 2030

WILL SUPPORT INFLATION AND POSSIBLE

CHANGES IN ECONOMIC ASSUMPTION

WHY IS THERE A NEED FOR WATER CAPITAL PROJECT
FUNDING?

MILLIONS)
$13.95
$17.70
$6.06
$14.03
$12.48
$33.86
$14.57
$93.10
$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00

FORTUNA

MCKINLEYVILLE CSD
ARCATA

FORT BRAGG
HUMBOLDT CSD*
EUREKA
WILLITS**
UKIAH
As Reported in the FY 2023-24 Entity Financial Statements (in millions) Except - *Humboldt CSD FY 2021-22 /** Willits FY 2022-23

NEED FOR INVESTMENT IN WATER INFRASTRUCTURE
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
Water

HISTORIC INVESTMENT IN WATER AND WASTEWATER

INFRASTRUCTURE
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
Water Page 154 of 286 Wastewater

PRIOR RATE INCREASES AND PROPOSED RATE

INCREASES
RATES FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
Water 37% 1.5% 1.5% 1.5% 1.5%
Wastewater 10% 10% 10% 8% 8%
RATE
SCENARIOS FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Water 1 44% 0% 10% 10% 8%
Water 2 23% 18% 12% 10% 10%
Wastewater 0% 0% 5% 5% 5%

AVERAGE ARCATA SINGLE-FAMILY RESIDENTIAL (SFR)

INCREASE IN FIRST YEAR
35%
65%
Water $47.98 Wastewater $88.95
$1-
$21.72 $11.59
$47.98
$47.98
$47.98
$88.95
$82.31
$82.31
Current Bill 44% Average Water ↑ 23% Average Water ↑
Water Increase Water Wastewater
↑11.0%
$152.01 ↑ 3.6%
141.88 $136.93

AVERAGE SFR UTILITY BILL RATE CHANGES SCENARIO 1
$47.98
$69.70 $69.70 $76.70 $84.34 $91.08
$88.95
$88.95 $82.31
$86.43
$90.75
$95.29
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
$200.00
Current 5/1/2026 7/1/2026 7/1/2028 7/1/2029 7/1/2030
Water Wastewater
$21.72 ↑

15.9% ($ 6.64) ↓
-4.2%
$11.12↑

7.3%
$11.96↑

7.3%
$11.28↑

6.4%
UP 36% OR $49 TOTAL INCREASE BY 7-1-2030

AVERAGE SFR UTILITY BILL RATE CHANGES SCENARIO 2
$88.95
$88.95 $82.31
$82.31
$82.31 $86.43 $86.43 $90.75
$90.75 $95.29
$47.98 $59.57 $59.57 $70.29 $78.72 $78.72 $86.56 $86.56 $95.25 $95.25 $-
$50.00
$100.00
$150.00
$200.00
$250.00
Current 5/1/2026 7/1/2026 1/1/2027 1/1/2028 7/1/2028 1/1/2029 7/1/2029 1/1/2030 7/1/2030 Water Wastewater
$11.59 ↑

8.5% ($ 6.64) ↓
-4.5%
$10.72↑

7.6%
$8.43↑

5.5%
$4.12↑

2.6%
$7.84↑

5.5%
$4.32↑

2.5%
$8.69↑

4.9%
$4.54↑

2.4%
UP 39% OR $53 TOTAL INCREASE BY 7-1-2030

NO ONE IS AVERAGE…
• AVERAGE OR MEDIAN DATA PUTS INFORMATION IN CONTEXT
CPI-U, HOME PRICE, INCOME, STEPS PER DAY, SAVINGS, ETC. • MANY FACTORS IMPACT ONE’S MONTHLY WATER/WASTEWATER BILL • BILLING CLASSIFICATION
• METER SIZE
• # PERSONS
• HABITS
• GARDENS/LANDSCAPING/YARDS
• ENCOURAGE RATEPAYERS TO COMPARE THEIR MONTHLY BILL TO THE PROPOSED RATE SCHEDULES Page 159 of 286

PUBLIC PARTICIPATION IN RATE PROCESS

1. PROPOSITION 218 NOTICE OF PROPOSED WATER/WASTEWATER RATES • MUST BE MAILED TO PROPERTY OWNERS AND TENANTS RESPONSIBLE FOR

PAYING BILLS
• NOTICE INCLUDES:
• REASON FOR INCREASE
• DATE, TIME AND LOCATION OF PUBLIC HEARING
• INSTRUCTIONS ON HOW TO SUBMIT A WRITTEN PROTEST

PUBLIC PARTICIPATION IN RATE PROCESS
(CONTINUED)

2. REVIEW THE INFORMATION
• REVIEW THE NOTICE, RATE STUDY AND OTHER MATERIALS
• USING A CURRENT BILL, CALCULATE THE IMPACT TO YOUR ACCOUNT • ATTEND THE WORKSHOP ON 2.25.26 5:30PM AT THE D STREET NEIGHBORHOOD CENTER

PUBLIC PARTICIPATION IN RATE PROCESS
(CONTINUED)

3. SUBMIT A WRITTEN PROTEST (OPTIONAL BUT IMPORTANT)
• ONLY WRITTEN PROTESTS COUNT TOWARD STOPPING THE RATE INCREASE • PROTESTS MUST:
• BE IN WRITING
• IDENTIFY THE PROPERTY ADDRESS OR PARCEL NUMBER
• CLEARLY STATE OPPOSITION TO THE PROPOSED WATER RATES
• BE RECEIVED BEFORE OR DURING THE PUBLIC HEARING – 4.15.2026

IF CITY COUNCIL REDUCES THE PROPOSED INCREASES
– WHAT HAPPENS?
• APPROVED RATES ONLY SET THE CAP ON HOW MUCH RATES CAN INCREASE OVER THE NEXT FIVE YEARS – COUNCIL CAN ADJUST DOWN OR SKIP
• CITY COUNCIL ACTION TONIGHT
• APPROVE OR NOT APPROVE THE PROPOSITION 218 NOTICE AND PROCESS • ALTERNATIVELY PROVIDE DIRECTION TO STAFF ON RATE REVISIONS • IF CITY COUNCIL REDUCES THE PROPOSED RATE INCREASES, INFRASTRUCTURE PROJECTS WILL

BE REDUCED IN SCOPE, DELAYED OR ELIMINATED FROM THE PLAN

JANUARY 2ND DOWNTOWN ARCATA FIRE
• APPROXIMATELY 2 MILLION GALLONS OF WATER WAS ESSENTIAL TO COMBAT THE FIRE • WATER RESOURCES CRUCIAL TO SUCCESS:
• NEWLY BUILT TANK 1C WITH 1 MILLION GALLONS WATER STORAGE • ACCESS TO HUMBOLDT BAY MUNICIPAL WATER DISTRICT ACTIVE PUMPING AFTER 4:00PM • NO DISRUPTIONS IN DISTRIBUTION SYSTEM (PIPES & PUMPS) • CAPACITY, STORAGE AND WATER PRESSURE ARE VITAL TO EMERGENCY RESPONSE

RECOMMENDED ACTION FOR TONIGHT
• MOTION TO ADOPT RESOLUTION #256-18
• INITIATES THE PROPOSITION 218 PROCESS
• APPROVES MAILING 218 NOTICE TO RATEPAYERS
• SETS THE PUBLIC HEARING DATE 4.15.2026
• COUNCIL WILL CONSIDER RATE ADOPTION ON 4.15.2026

QUESTIONS

City of Arcata
2025 Water and
Wastewater Rate Study
February 4, 2026

Presentation
Overview
Rate Study Overview
Proposition 218
Water Financial Plan & Rates
Wastewater Financial Plan & Rates
Next Steps
Questions and Discussion
2 Page 168 of 286
Rate Study
Objectives
Financial Sufficiency
Legal Compliance (Prop. 218)
Rates Aligned with City Objectives
Minimize the Impact on Ratepayers
3 Page 169 of 286
Rate Study Process
Project
Initiation
Customer
Analysis
Financial
Plan
Cost
Allocation
Rate
Design
Prop. 218
Process
4 Page 170 of 286
Proposition
218
• Voter-approved constitutional amendment
1996
o Rates cannot exceed cost of providing service
• Substantive requirements for property-related
charges
o Rates cannot exceed cost of providing service
o Proportionate cost recovery (fair and equitable)
• Procedural requirements for rate increases
o Mail notice of rate increases to all property
owners/customers
o Hold public hearing at least 45 days after the mailing o Rates are subject to “majority protest”
5 Page 171 of 286
Water
Enterprise
Overview
• Water utility is a financially self-supporting
enterprise that provides service to 6,600
customers
o Single Family Residential: 3,900 (60%)
o Commercial: 2,700 (40%)
• Rates are the main source of revenues
• Rates need to be set at levels adequate to fund
the cost of providing service
6 Page 172 of 286
Water Capital
Improvement
Planning
Efforts
7 $12.1
$0.6
$0.2
$11.4 $11.8
$0
$2
$4
$6
$8
$10
$12
$14
25-26 26-27 27-28 28-29 29-30
Millions
City of Arcata
Water System Improvement Projects
Distribution System All Other

Water
Financial
Challenges
(Short-Term)
• FY 25/26 capital improvements $12.1 million
• Steel water line replacement and Plunkett water line
improvements $11.5 million
• Sewer loan of $3.5 million insufficient
• With a 44% rate increase reserves will drop from $9
million to $1.5 million with no additional financing
• Insufficient reserves increase enterprise risk and impede future borrowing
• Recommendation: Issue 30-year bonds for $9.5
million
• $6 million for additional capital funding
• $3.5 million to refund sewer loan
• Sewer loan will bridge gap until rate increases effective 8 Page 174 of 286
Water
Financial
Challenges
(Long-Term)
• Aging infrastructure & capital improvement needs
• Water system upgrades, repairs & replacements needed to maintain safe & reliable operations
• Approximately $36 million over the next 5 years
• Debt service
• Existing annual debt service of $139,000
• Projected need to issue $30 million in new debt to fund capital improvements in the next five years
• Issuances of $10 million in FY 25/26 and $20 million in FY 28/29 • Additional debt service building to $2 million per year in FY 29/30 • Operating cost inflation
• Annual operating cost inflation of 4.0% for the next five years • Annual rate adjustments needed to keep rates in line with escalating costs (chemicals, utilities, staffing, supplies, insurance, etc.) • Maintain Prudent Reserves
• Emergencies, demand fluctuation, cash funding capital, credit 9 worthiness etc. Page 175 of 286
Water Rate
Scenarios
10 Water Rate Revenue Scenarios
Scenario 1: Immediate Revenue Recovery
Rates Effective May 1, 2026 Jul. 1, 2027 Jul. 1, 2028 Jul. 1, 2029 Jul. 1, 2030 Net Rate Revenue Increase
in FY ($) $1,017,063 $0 $798,857 $878,743 $773,294
Rate Revenue Increase (%) 44.0% 0.0% 10.0% 10.0% 8.0%
Ending Reserve Balance $6,935,088 $7,745,508 $9,088,705 $9,127,187 $8,516,465 Scenario 2: Phased-In Revenue Recovery
Rates Effectives May 1, 2026 Jan. 1, 2027 Jan. 1,2028 Jan. 1,2029 Jan. 1, 2030 Net Rate Revenue Increase
in FY ($) $531,647 $614,121 $483,109 $450,901 $495,992
Rate Revenue Increase (%) 23.0% 18.0% 12.0% 10.0% 10.0% Ending Reserve Balance $6,449,671 $6,699,504 $7,769,277 $7,584,132 $6,918,910 *Initial bill impacts will vary based on customer class and usage due to rate structure adjustments realigning rates with cost of service.
• Scenario 1, returning to Fiscal Year (July 1) increases • Scenario 2, maintaining calendar year (January 1) rate increases