4916-6007-6981 v1
RESOLUTION NO. 2026-C47
A JOINT RESOLUTION OF THE CITY OF AZUSA, AND THE UTILITY BOARD OF
THE CITY OF AZUSA, CALIFORNIA, ADOPTING WATER RATES, INCLUDING
THE COMMODITY DROUGHT RATE SCHEDULE AND THE REPLACEMENT WATER COST ADJUSTMENT FACTOR, EFFECTIVE AUGUST 1, 2026, WITH ANNUAL ADJUSTMENTS EACH JULY 1 THROUGH JULY 1, 2030
WHEREAS, the City of Azusa (“City”) owns and operates a water utility that provides water to over 23,000 customers, and Azusa Municipal Code (“AMC”) Section 2-414 authorizes the City Council to act jointly with the Utility Board of the City of Azusa (“Utility Board”) when establishing rates for water service. This resolution shall use the phrase “Azusa Light & Water” (or “ALW”) to mean actions taken by the City jointly with the Utility Board; and WHEREAS, ALW provides water service to property owners (which also includes tenants obligated to pay for water services, and owners and tenants may be collectively referred to as “owners” or “ratepayers” or “customers”) within the relevant ALW service area, and ALW establishes the amount of water rates to be charged to customers in accordance Azusa Municipal Code Chapter 78, Article VI and applicable law; and
WHEREAS, California law authorizes ALW to charge a fee to customers for the proportionate cost of providing water services to each customer in accordance with the procedural and substantive requirements of the voter-approved ballot measure known as “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been judicially interpreted by appellate court decisions). ALW refers to those fees as water rates (herein referenced as “water rates,” or “rate”); and
WHEREAS, ALW has previously established water rates under Azusa Municipal Code Chapter 78, Article V, pursuant to Resolution No. 2023-UB02 adopted by ALW on October 23, 2023. The purpose of water rates is to ensure that adequate funding is provided to protect the public health, safety and general welfare through the provision of a reliable and adequate water system that meets current and anticipated demands to serve the owners and customers of the ALW, including the establishment of drought surcharges to address the unique cost impacts on the water system during a drought; and
WHEREAS, ALW undertook an analysis of previously established water rates, as documented in the Water Rate Study prepared by the ALW’s consultant, Utility Financial Solutions, LLC dated May 2026 (“Rate Study”), and determined that proposed changes to the water rates are warranted in order to offset the ALW’s ongoing costs of providing water services to owners and customers. The Rate Study can be found here:
www.azusaca.gov/2325/27162/Proposed-Updates-to-Water-Rates. This study is available for public review upon request; and
WHEREAS, On May 26, 2026, ALW approved Resolution No. 2026-C28, by which the ALW established Utility Rate Setting Procedures for considering and acting on proposed updates to water rates in accordance with the requirements of Proposition 218, and including implementation of the administrative remedies for owners to submit written objections to the water rates (in accordance with “AB 2257” codified at Government Code Sections 53759.1 and Resolution 2026-C47
4916-6007-6981 v1
53759.2); and ALW directed City staff to provide notice of a public hearing to consider the approval of updated water rates in accordance with the Utility Rate Setting Procedures; and WHEREAS, by May 29, 2026, ALW mailed the notice of public hearing (to be held on July 27, 2026) to all property owners receiving water service from ALW, which identified the deadline for submitting written objections as July 13, 2026, and ALW posted the notice on its website www.azusaca.gov/2325/27162/Proposed-Updates-to-Water-Rates; and WHEREAS, as of the deadline on July 13, 2026, ALW received one written objection for which ALW included a written response in the staff report accompanying this resolution; and WHEREAS, consistent with the notices of public hearing, the public hearing was held on July 27, 2026, ALW provided an opportunity for every interested person to comment on the proposed water rates, ALW considered all timely written objections from property owners and written responses from ALW staff, and ALW determined that the proposed water rates comply with the requirements of Proposition 218 and proceeded to conduct the public hearing to consider timely written protests submitted prior to the close of public hearing; and WHEREAS, ALW determines, after having duly received and considered oral and documentary evidence concerning the necessity for the proposed water rates, that it is warranted and necessary to establish revised water rates as set forth in this Resolution; and WHEREAS, this Resolution is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code Section 21080(b)(8), and California Code of Regulations Section 15273 (of the “CEQA Regulations”) because it establishes, modifies, structures, or restructures, and approves rates and charges for the purposes of: (1) meeting operating expenses; (2) purchasing supplies, equipment and materials; (3) meeting financial requirements; and (4) obtaining funds for capital projects necessary to maintain service within existing service areas.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Azusa, and the Utility Board of the City of Azusa as follows:
SECTION 1: Revisions to Water Rates and Charges.
A. Consistent with the recitals to this resolution, the phrase “Azusa Light & Water” (or “ALW”) shall refer to actions of the City Council acting jointly with the Utility Board.
B. Update to Water Charges and Water Rates. ALW hereby approves the water rates set forth on “Exhibit A,” which is attached and incorporated by this reference. The water rates approved by this Resolution shall be implemented in accordance with Resolution Sections 1(C) through 1(F). The water rates are approved based on the following findings and determinations by ALW:
1. After considering all timely written objections and written responses, the Rate Study and all evidence identified in this Resolution document the bases on which these water rates are approved, and there is no need to reduce, alter, or clarify the proposed water rates.
2. At the close of the public hearing on July 27, 2026, ALW considered all timely written protests and determined that, from the total number of 25,269 parcels served by ALW, the owners of a majority of those parcels did not submit a written protest. Therefore, ALW Resolution 2026-C47
4916-6007-6981 v1
overruled all written protests against the proposed water rates, and ALW may approve the water rates in accordance with California Constitution Article XIII D, Section 6(a)(2).
3. The Rate Study and all evidence identified in this Resolution document that the water rates comply with the substantive requirements of Proposition 218, as set forth at California Constitution Article XIII D, Section 6(b):
a. The revenues derived from the rates do not exceed the cost of providing water service to property owners or customers served by the ALW’s water service. b. The revenues derived from rates are not, and shall not be, used for any other purpose other than meeting the costs of providing water service. c. The amount of the rate imposed upon any parcel does not exceed the proportional cost of the water service provided to that parcel. d. The revenues derived from rates are used for water services actually used by, or immediately available to, the person or owner of the property responsible for the payment of the rate.
e. No rate is imposed for general governmental services, such as police or fire, that is available to the public at large.
4. The proposed water rates are not discriminatory or excessive, and will be sufficient under Government Code Section 54515 and under the provisions or covenants of any outstanding revenue bonds of ALW payable from the revenues of the enterprise and will be in compliance with applicable law.
C. Effective Date of Water Rates. The water rates set forth on “Exhibit A” shall be effective August 1, 2026, for the rates identified in each column labeled “August 1, 2026” for each row of rates as applicable to the relevant property owner or customer for each Meter Service Charge, Baseline Commodity Charge, and Fire Service Charge listed on Exhibit “A.” Thereafter, the water rates shall be automatically updated on an annual basis each July 1 for the years 2027, 2028, 2029 and 2030, in accordance with the schedule set forth on Exhibit “A” for the corresponding columns for each year labeled “August 1, 2026,” “July 1, 2027,” “July 1, 2028,” “July 1, 2029,” and “July 1, 2030.” The rates in effect on July 1, 2030, shall remain in effect thereafter until amended in accordance with Resolution Sections 1(G). Provided, however: (i) water rates identified on the Commodity Drought Rate Schedule shall only be effective during times when the General Manager of Utilities has approved a Declaration of Drought Rates pursuant to Resolution Section 1(D); and (ii) any adjustment to the water rates in effect on August 1, 2026, shall be effective no earlier than 30 days after ALW provides written notice to customers in accordance with Resolution Section 1(F).
D. Declaration of Drought Rates. The Utilities General Manager is authorized to implement the Drought Rate Schedule set forth on Exhibit “A,” at the appropriate phase (I through IV), upon publishing on the City’s website a written determination of either: (i) the Utilities General Manager declares a water shortage at Phase I through IV (in accordance with the Water Shortage Contingency Plan authorized by Resolution No. 2026-UB-04); or (ii) the Utilities General Manager determines that the volume of ALW water forecasted to be used over a twelve- Resolution 2026-C47
4916-6007-6981 v1
month period of time is less than the estimated usage volumes identified in the Rate Study (see Table 8) by the corresponding percentage for the relevant water shortage phase (5% less for Phase 1; 10% less for Phase I1; 15% less for Phase II1; or 20% less for Phase 1V). Any such forecast of decreased water usage shall be based on a documented decrease of actual water usage over a period of 12 months. Any such implementation of drought rates shall be subject to compliance with Resolution Section 1(F).
E. Passthrough Wholesale Rates for the Replacement Water Cost Adjustment Factor.
The Utilities General Manager is authorized to implement annual adjustments to the water rates in accordance with the Replacement Water Cost Adjustment Factor (“RWCAF”) as described in the Rate Study (see Rate Study pages 11 and 38 through 41). Any such implementation of drought rates shall be subject to compliance with Resolution Section 1(F).
F. After the water rates are in effect on August 1, 2026, ALW shall mail written notice of any adjustment to water rates at least 30 days before the effective date, in accordance with Government Code Section 53756(d). Provided, however, for any annual establishment of water rates: (1) ALW may set the rates by resolution in an amount that is equal to or less than the amounts authorized by this Resolution Section 1; and (2) ALW may delay the effective date of an annual increase as long as the amount of the increase does not exceed the authorized amount of rates set forth on Exhibit “A.”
G. The water rates shall not be set in an amount that exceeds those set forth in this Resolution Section 1 unless ALW first conducts a noticed public hearing in accordance with the requirements of law including Proposition 218.
SECTION 2: Suspension of Water Utility User’s Tax. Concurrent with the initial effective date of these updated water rates on August 1, 2026, the City’s Utility User’s Tax for water utility users, as codified at Azusa Municipal Code Section 70-268, is hereby suspended in accordance with Azusa Municipal Code Section 70-279.
SECTION 3: Any delinquent payment of a water rate that is owed under this Resolution shall constitute a lien upon the real property served, in accordance with Government Code Section 54354.5.
SECTION 4: If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Resolution, is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution. ALW hereby declares that it would have adopted this Resolution, and each section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.
***************************
PASSED, APPROVED, AND ADOPTED THIS 27 DAY OF JULY 2026.
Resolution 2026-C47
4916-6007-6981 v1
________________________________
Edward J. Alvarez,Mayor, City of Azusa
ATTEST:
___________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
________________________________
Jessee Avila, Jr.,
Chairperson, Utility Board of the
City of Azusa
ATTEST:
___________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
APPROVED AS TO FORM:
_____________________________
Rachel Richman
City Attorney
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
Resolution 2026-C47
4916-6007-6981 v1
I HEREBY CERTIFY that the foregoing Resolution 2026-C47 was duly adopted by the City Council of the City of Azusa and the Utility Board of the City of Azusa, acting jointly as Azusa Light & Water, at a special meeting of the City Council and regular meeting of the Utility Board on the 27th day of July, 2026.
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
_____________________________
Jeffrey Lawrence Cornejo, Jr., City Clerk