Camarillo City Council
AGENDA REPORT
Date: March 12, 2025
To: Honorable Mayor and City Councilmembers
From: Greg Ramirez, City Manager
Submitted by: Mark Uribe, Finance Director
Subject: FY 2024/25 Water and Sewer Rate Study Preliminary Results and Public Outreach Plan
BACKGROUND
The City has historically adjusted water and sewer rates on a two-year cycle. A comprehensive rate study is conducted to analyze the costs of providing water and sewer services to the community. The last rate study was completed in 2023, with rates effective January 1, 2024 and July 1, 2024.
The City of Camarillo retained an independent consultant, Raftelis Financial Consultants, Inc., to prepare a comprehensive rate study. The study establishes water and sewer rates that are based on the cost of providing the service and incorporates the expected cost of the capital improvement plan, operating budgets, customer billing and water use data, and future growth and inflationary estimates for the study period. The results of the rate study have been discussed at five Utilities Committee (UC) meetings between November 2024 and February 2025.
On February 26, 2025, staff presented to City Council a history of expenditures and future projections of expenditures in water and sewer. Staff also presented a high-level overview of how rates are determined, what factors affect rate changes, customer impacts at the proposed rates, and comparisons to neighboring agencies water and sewer services.
Staff is proposing water rate increases effective July 1, 2025 to users of the City Water Enterprise (Water) and the Camarillo Sanitary District (CSD). Staff will return to the City Council on March 26 to request Council to authorize Proposition 218 notices to customers.
Staff also proposes changing the two-year cycle of rate studies to a four-year cycle.
Transitioning to a four-year cycle gives customers transparency in what to expect over a longer time horizon and it shows potential bond agents that Water and CSD have a
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2 reliable revenue source to meet minimum debt coverage, should the City need to bond future capital projects.
DISCUSSION
As part of the water and sewer rate adoption, staff has planned a robust community engagement plan to ensure that ratepayers understand the basis and need for rate adjustments. The engagement plan will include updates to the city’s website, videos that explain the process, frequently asked questions, and in-person informational sessions where community members can ask experts questions one-on-one in an informal setting.
During tonight’s discussion, staff will focus on the proposed engagement plan and present the proposed rates for Water and CSD. In addition, staff will review the proposed rates that will go into effect July 1, 2025.
Water
Staff is proposing four years of rate increases as shown in the following tables.
Table 1 shows the current and proposed monthly water service charge by meter size.
Table 1: Proposed Four-Year Schedule of Monthly Water Meter Service Charge Meter Size Current 7/1/2025 7/1/2026 7/1/2027 7/1/2028
3/4" $26.19 $32.48 $38.33 $42.93 $44.65
1” $34.94 $43.33 $51.13 $57.27 $59.57
1 ½” $56.84 $70.49 $83.18 $93.17 $96.90
2” $83.12 $103.07 $121.63 $136.23 $141.68
3” $166.33 $206.25 $243.38 $272.59 $283.50
4” $288.95 $358.30 $422.80 $473.54 $492.49
6” $626.20 $776.49 $916.26 $1,026.22 $1,067.27
8” $1,064.16 $1,319.56 $1,557.09 $1,743.95 $1,813.71
Fire Hydrant $166.33 $206.25 $243.38 $272.59 $283.50
Table 2 shows current and proposed water consumption rates per unit of water for residential and non-residential customers. The commodity rate is in dollars per unit ($/hcf). Note: One unit of water is 100 cubic feet (hcf) or approximately 748 gallons of water.
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2 Table 2: Proposed Four-Year Schedule of Monthly Water Commodity Rates (use/consumption)
Customer Type & Tier Current 7/1/2025 7/1/2026 7/1/2027 7/1/2028 Residential
Tier 1 $2.66 $3.30 $3.90 $4.37 $4.55
Tier 2 $3.94 $4.89 $5.78 $6.48 $6.74
Tier 3 $5.34 $6.63 $7.83 $8.77 $9.13
Uniform Classes
Commercial, Industrial,
and Governmental (CIG)
$3.35 $4.16 $4.91 $5.50 $5.72
Landscape, Agriculture,
and Construction
$5.92 $7.35 $8.68 $9.73 $10.12
Recycled Water $3.55 $4.41 $5.21 $5.84 $6.08
Drought Rates
In October 2023, City Council adopted drought surcharges. These surcharges can be applied in addition to the City’s existing water rates during times of drought or other water emergency. In order for these to become active, City Council would need to take separate action to recognize that drought conditions exist and establish the severity level. Staff is not recommending changes to the existing drought rates and does not anticipate the use of drought surcharges in the near-term, but these existing surcharges by severity level are included below as a reference.
Customer
Class
Baseline
Rate 7/1/25
Level 1
Surcharge
Level 2
Surcharge
Level 3
Surcharge
Level 4
Surcharge
Residential
Tier 1 $3.30 $0.20 $0.33 $0.54 $0.81
Tier 2 $4.89 $0.30 $0.48 $0.79 $1.20
Tier 3 $6.63 $0.40 $0.65 $1.06 $1.62
Uniform Classes
CIG $4.16 $0.26 $0.41 $0.67 $1.02
Landscape,
Agr, Const $7.35 $0.44 $0.72 $1.18 $1.80
Sewer
Staff is proposing four years of rate increases shown in the following tables for the Camarillo Sanitary District (CSD).
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2 Table 1: Proposed Monthly Sewer Service Rates for Residential Customers Residential Class Current 7/1/2025 7/1/2026 7/1/2027 7/1/2028 Single Family Residential
(SFR) $74.30 $86.19 $99.99 $115.99 $134.55
Multi-family Residential
(MFR) $51.40 $59.63 $69.18 $80.25 $93.09
Duplex $51.40 $59.63 $69.18 $80.25 $93.09
Triplex $51.40 $59.63 $69.18 $80.25 $93.09
Condos/Cluster Housing $51.40 $59.63 $69.18 $80.25 $93.09 Mobile Home Parks $28.92 $33.55 $38.92 $45.15 $52.38
Qualifying Low-Income
Senior $28.92 $33.55 $38.92 $45.15 $52.38
Age Restricted $28.92 $33.55 $38.92 $45.15 $52.38
Table 2: Proposed Monthly Sewer Service Charge Based on Water Meter Size for Non-Residential Customers
Meter Size Current 7/1/2025 7/1/2026 7/1/2027 7/1/2028
3/4" $43.35 $50.29 $58.34 $67.68 $78.51
1” $94.23 $109.31 $126.80 $147.09 $170.63
1 ½” $179.10 $207.76 $241.01 $279.58 $324.32
2” $280.90 $325.85 $377.99 $438.47 $508.63
3” – 8” $518.42 $601.37 $697.59 $809.21 $938.69
Table 3: Proposed monthly sewer service variable rate based on water use for Non- Residential Customers. The commodity rate is in dollars per unit ($/hcf) of metered water use.
Commodity Rate Current 7/1/2025 7/1/2026 7/1/2027 7/1/2028 Low Strength Commercial $5.44 $6.32 $7.34 $8.52 $9.89
Medium Strength
Commercial $6.69 $7.77 $9.02 $10.47 $12.15
High Strength Commercial $7.80 $9.05 $10.50 $12.18 $14.13 Churches $5.44 $6.32 $7.34 $8.52 $9.89
Schools $5.44 $6.32 $7.34 $8.52 $9.89
Hospitals/Convalescent $5.44 $6.32 $7.34 $8.52 $9.89
Public/City $5.44 $6.32 $7.34 $8.52 $9.89
Industrial $7.80 $9.05 $10.50 $12.18 $14.13
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2 Proposition 218
In July 2006, the California Supreme Court ruled that utility rates like water and sewer are subject to Proposition 218. As a result, these fees may not be imposed or increased without a 45-day mailed notice of the proposed rate increase to all property owners and a majority protest proceeding.
In order to comply with Proposition 218, notices of the proposed rate increase will be mailed to all billing customers, as well as affected property owners within the City of Camarillo who are not utility billing customers (e.g., landlords). Staff will return to City Council on March 26, 2025 to authorize the mailing of the Proposition 218 notices, which will need to be postmarked by March 28, 2025. The notices will describe the rate proposal, the basis for the rates, why rate adjustments are required, explain the method for protesting the rate increase, and provide the day, time, and place of the Public Hearing.
Pursuant to Government Code Sections 6062a, 54354.5 and 66016 regarding Proposition 218 noticing requirements, the Public Hearing Notice and the Resolution will be published in the local newspaper.
Noticed rates represent the maximum fee or charge implementable each year. Future Councils/Boards will have the discretion to implement a rate lower than noticed as a matter of policy or if financially prudent. The City historically updates the financial needs of the Water Enterprise and CSD annually to ensure that the rates noticed are still required. As part of this four-year proposal, that practice would continue.
FISCAL IMPACT
There is no fiscal impact as a result of this recommended discussion.
RECOMMENDATION
Provide feedback and further direction to staff.
ATTACHMENTS
None
REFERENCE MATERIALS – AVAILABLE FOR REVIEW AT CITY HALL None