ADMINISTRATIVE REPORT
MEETING DATE: June 11, 2025 AGENDA CATEGORY: Hearings TO: Honorable Mayor and City Council
FROM: Kristina Budak, Water Director
DATE: May 29, 2025
SUBJECT: Public Hearing to Consider Adoption of Domestic Water Rates for Fiscal Years 2026 thru 2030.
Resolution to Adopt Increases to Water Rates for Domestic Water Service Area for Fiscal Year 2026 thru 2030.
RECOMMENDATION:
Staff recommends adoption of the resolution
BACKGROUND:
The Water Department – Water Resources Division provides domestic water services for the distribution of clean drinking water to residents and businesses within the City of Bakersfield's Domestic Service Area.
The Domestic Water Enterprise fund is self -sustaining supported primarily by service connecti on fees, referred to as water availability fees , readiness -to-serve fee, and monthly domestic water sales to residents within the Domestic Service Area. The City of Bakersfield' s domestic water system currently has one of the lowest monthly rates in urban Bakersfield.
In 2022, the City contracted with a consultant to prepare a five -year Water Rate and Service Connection Fee Study. The consultant recommended a 5 -year rate increase of 15%, 10%, 10%, 3%, 3% annually ; however, a rate increase of 10% in FY 24 , with four additional years of 6% increases, was ultimately approved by the City Council in June 2023 and adopted July 1, 2023.
Since the rate increase went into effect, water system infrastructure continues to age and significant well rehabilitations, service line replacements, and generator replacements have been identified. In addition, new State regulations have recently passed that impact the City’s operation of the Domestic Water System. These regulations include Water Conservation is a Way of L ife, Lead and Copper Rule Improvements, and additional water quality regulations for PFOs, which were all finalized in 2024. These regulations have increased anticipated operating and capital improvement project expenditures to comply with regulations , which were not factored in to the 2022-23 rate study. A 2025 Supplemental Report was prepared as a result of a thorough ten -year infrastructure master plan and identified insufficient funding from the previously approved 2023 rate structure.
Chapter 14.04 o f the Bakersfield Municipal Code outlines the process by which the City establishes the fees and rates for the Domestic Water Service Area. Based on the above reasoning and several additional operational factors, which contribute to increased costs; including electricity, removal of the groundwater contaminant 123- TCP, system repair and maintenance, and additional capital improvement projects, it has been determined that this rate increase for Fiscal Years 2026 through 2030 is necessary to help fund these operational and project costs.
California state law (Proposition 218) requires that fees adopted by City for services rendered do not exceed the reasonable estimated cost for providing the services. Staff have determined that the proposed rates do not exceed the cost of services. Proposition 218 also requires a public hearing in which the public may support or protest the rate increase.
Proposition 218 Notices for the proposed increased rates were mailed to residents within the City Domestic Service areas, informing them of proposed changes to domestic water rates for FY 2026 through FY 2030. Notices were mailed to residents on April 25, 2025. As of the date of the Administrative Report, the Clerks’ Office has received 77 written protests.
This proposed resolution adopts new domestic water rates for residential and commercial users fees as defined below:
Fiscal Year 2026 – 34% Increase
Fiscal Year 2027 – 6% Increase
Fiscal Year 2028 – 6% Increase
Fiscal Year 2029 – 2.4% Increase
Fiscal Year 2030 – 2.4% Increase
If approved, the proposed rates will go into effect July 1, 2025, and future increases would go into effect each July 1 thereafter through July 1, 2029.
FISCAL IMPACT:
The resolution results in no impact to the General Fund.
COUNCIL GOAL:
Reliable Infrastructure
ATTACHMENTS:
1. Resolution to Adopt Domestic Water Rates
2. Exhibit A – Rate Schedule FY 26 thru FY 30
3. 2025 Supplemental Report