Staff Report – 2025-26 RMRA Project List Page 1 of 4
STAFF REPORT
TO: Mayor and Members of the City Council
FROM: Brad Donohue, Director of Public Works and Planning Abdulkader Hashem, Principal Project Manager
VIA: Dan Barros, City Manager
MEETING DATE: May 14, 2025
SUBJECT: FY 2025-26 Water Conservation Incentive Program
RECOMMENDATION
Staff recommends that the City Council adopt the following:
RESOLUTION ESTABLISHING THE AUTHORIZED SUBSIDY AT $61,697.28, WITH A $4,000 CONTINGENCY, FOR A TOTAL OF $65,697.28, FOR THE WATER CONSERVATION INCENTIVE PROGRAM IN FISCAL YEAR 2025-26 PURSUANT TO CEQA GUIDELINE 15378, 15307, AND 15308
COUNCIL ADOPTED VALUES
The Water Conservation Incentive Program serves as a valid public purpose by rewarding and encouraging water conservation by both residents and businesses for their conservation efforts.
The program is innovative and visionary , providing for an annual sewer subsidy for those who want to conserve a valued natural resource. The program also demonstrates the City Council’s commitment to adopting and implementing sustainability policies and programs.
BACKGROUND
Pursuant to its adoption of Resolution No. 2012-28, adopted in July 2012, the City Council approved a Water Conservation Incentive Program for all residential and commercial sewer service customers beginning in FY 2014-15. The program’s purpose was to create an incentive program by promoting water conservation, which could help ease the cost of increasing sewer service rates for the various property owners in Town.
The process of calculating the Annual Sewer Service charge discount was amended by the City Council at the April 11, 2018, City Council meeting.
After the annual water consumption reports are provided to the Town via the Town’s water purveyor, Cal Water, Staff inputs the information and calculate out each property owners cost for their Annual Cost of Sewer charges.
AGENDA ITEM #3
Staff Report – 2025-26 RMRA Project List Page 2 of 4
Once that effort has been completed, the next calculation is to determine who are “Eligible Customers” (Definition of Eligible Customer is: A property owner who is connected to the Towns Sanitary Sewer System whose domestic water use is the same or less than the prior three (3) year average).
The Annual Sewer Service Discount is then based on the Annual Cost of Service for Eligible Customers only, for example if the Annual Cost of Service for Eligible Customers were $500,000 and the approved discount was 10%, the Annual Discount that the Town would be responsible for would be $50,000.
ANALYSIS
Authorized Subsidy
The proposed resolution would establish $61,697.28 as the Authorized Subsidy for the Water Conservation Incentive Program. The Town’s Annual Cost of Service for Eligible Customers for providing Town-wide sewer service is calculated to be $616,972.86 for FY 2025-26. Using this data, the Individual Sewer Service Discount would be calculated as follows:
Annual Cost of Collection Service for Eligible
Customers (NEW)
(South San Francisco + NCSMSD annual charges)
$110,448.08
Annual Cost of Treatment Service for Eligible
Customers
$506,524.78
Subtotal $616,972.86
Proposed Individual Sewer Service Discount
(Authorized Subsidy divided by Annual Cost of Service)
10.00%
Authorized Subsidy $61,697.28
Here’s an example of how this discount could affect an eligible residential customer 1:
Sewer service charge applicable to parcel1 $791.00
Collection Charge (NEW) applicable to parcel1 $206.40
Subtotal $997.40
Individual Sewer Service Discount 10.00%
Savings to customer (Includes d iscount on Treatment
& Collection costs) $99.74
Net charge to Eligible Customer $897.66
1 Using a hypothetical customer in the South San Francisco Sewer District plus new collection charge based on a annualized water consumption of 60 HCF,
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The maximum cost to the Town would only be the approved Individual Sewer Service Discount percentage of the Annual Cost of Service for Eligible Customers.
Detailed Description of the Project
In July 2012, City Council approved a Water Conservation Incentive Program for all sewer service customers in Town. The program grants each sewer service user a subsidy if the customer used the same amount of water or less compared to the average of the prior three years. The proposed resolution would approve an authorized subsidy of $61,697.28 for the Water Conservation Incentive Program and direct the City Manager to include the appropriation in the proposed budget for fiscal year (FY) 2025-26 (as a reduction of General Fund revenue).
With City Council approval of the Water Conservation Incentive Program subsidy, the City Engineer will prepare the Annual Engineer’s Report which will show the proposed sewer charge for each parcel for FY 2025-26. The Engineer’s Report will be presented to the City Council at the June 25, 2025, City Council meeting for approval. Upon approval, the Engineer’s Report will be submitted to the County Tax Collector, who shall then collect the sewer service charge against each parcel at the same time as the Collector collects the property tax against that parcel.
FISCAL IMPACT
Based on the 10% discount on each “Eligible Customer” the maximum cost the Town’s General Fund would incur for FY 2025-26 is estimated to be $61,697.28. Staff also request a contingency amount of $4,000.00 for unforeseen changes due to modifications or usage calculation errors for a total amount of $65,697.28.
ENVIRONMENTAL
The City Council’s adoption of the resolution to establish the Water Conservation Incentive Program Subsidy is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) pursuant to CEQA Guideline 15378 as a governmental fiscal activity with no commitment to any specific project which may result in a potentially significant physical impact on the environment. It is also exempt pursuant to CEQA Guideline 15307 and 15308 as an action taken to protect natural resources and the environment via water conservation.
ALTERNATIVES
Several alternatives are available to the Council: (2 examples, 5% and 15% discount) •The Council could lower the proposed Authorized Subsidy at 5% for Eligible Customers.
Please see example below:
Sewer service charge applicable to parcels $616,972.86
Individual Sewer Service Discount 5.00%
Savings to Eligible Customers $30,848.64
Net charge to Eligible Customers $586,124.22
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•The Council could raise the proposed Authorized Subsidy at 15% for Eligible Customers.
Please see example below:
Sewer service charge applicable to parcels $616,972.86
Individual Sewer Service Discount 15.00%
Savings to Eligible Customers $92,545.93
Net charge to Eligible Customers $524,426.93
CONCLUSION
Approval of an authorized subsidy of $61,697.28 would reduce the sewer service charge for each “Eligible Customer” by 10% for FY 2025-26. If the subsidy is not approved, the community may fail to prioritize the importance of water conservation for a sustainable future.
ATTACHMENTS
A.Resolution
Res 2025-##, Water Conservation Incentive Program 2025-26 Page 1 of 2 RESOLUTION NO. 2025-##
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION ESTABLISHING THE AUTHORIZED SUBSIDY AT $61,697.28, WITH A $4,000 CONTINGENCY, FOR A TOTAL OF $65,697.28, FOR THE WATER CONSERVATION INCENTIVE PROGRAM IN FISCAL YEAR 2025-26 PURSUANT TO CEQA GUIDELINE 15378, 15307, AND 15308
The City Council of the Town of Colma hereby resolves:
1.Background
(a) On July 11, 2012, the City Council adopted Resolution No. 2012-28 establishing a Water Conservation Incentive Program for all sewer service customers in the Town. The proposed program would grant each sewer service user a subsidy if the customer used the same amount of water or less compared to the average of the prior three years. (b)The City Council finds that the payments to be made under the Water Conservation Incentive Program serve a valid public purpose – to reduce water consumption – and that the program is fair and equitable to all users.
2.Findings
The City Council finds as follows:
(a)The Water Conservation Incentive Program serves a valid public purpose, to wit, it rewards and encourages water conservation by both residents and businesses, especially in drought periods;
(b)The program is innovative, providing for an annual sewer subsidy for those who want to conserve a precious natural resource;
(c)The program demonstrates the City Council’s commitment to adopting and implementing sustainability policies and programs;
(d)The proposed Authorized Subsidy described herein is affordable; and (e)In establishing the Authorized Subsidy described herein, the City Council has considered the long-term consequences to the financial health of the Town.
3.Order
The City Council hereby establishes an Authorized Subsidy of $61,697.28 for the Water Conservation Incentive Program for fiscal year 2025-26, with a $4,000 contingency, for a total of $65,697.28.
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ATTACHMENT A
Res 2025-##, Water Conservation Incentive Program 2025-26 Page 2 of 2 Certification of Adoption
I certify that the foregoing Resolution No. 2025-__ was duly adopted at a regular meeting of said City Council held on May 14, 2025 by the following vote:
Name Voting Present, Not Voting Absent
Aye No Abstain Not Participating
Ken Gonzalez, Mayor
Carrie Slaughter
Helen Fisicaro
Joanne F. del Rosario
Thomas Walsh
Voting Tally
Dated _________________ ________________________________ Ken Gonzalez, Mayor
Attest: ____________________________
Michelle Estabillo, City Clerk