RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI ADOPTING
UPDATED WATER AND SEWER RATES AND RESCINDING THE EXISTING RATES WHEREAS, the City of Cotati (“City”), provides water and sewer services within the City and also to certain customers outside the boundaries of the City; and WHEREAS, the City water and sewer systems are operated as separate not-for-profit selfsupporting utility enterprises; and WHEREAS, revenue from water service rates fund the ongoing operating and capital needs of the City water system, including providing for facility replacement, repair, operations and expansion, water purchase, service improvements to satisfy state and federal compliance requirements, meeting debt service obligations, supporting the capital projects needed to rehabilitate and upgrade the water system, and maintaining prudent financial reserves; and WHEREAS, revenue from sewer service rates fund the ongoing operating and capital needs of the City sewer collection system, treating and disposal of wastewater via the Santa Rosa Subregional System, meeting debt service obligations, supporting capital projects needed to rehabilitate and upgrade the sewer system, and maintaining prudent financial reserves; and WHEREAS, the City has not conducted a water and sewer rate study to adjust rates since March 2017, at which time the City established a series of rate adjustments to cover the cost of providing water and sewer service in Cotati; and
WHEREAS, it is industry practice to conduct a water and sewer rate study every few years to ensure the rates are sufficient to meet each utility’s financial and service obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent reserves; and
WHEREAS, on December 14, 2021, the City Council authorized the City Manager to execute an agreement with Hildebrand Consulting to revise the City’s rate models to incorporate current and projected expenses in operating and maintaining the utilities; and WHEREAS, Hildebrand Consulting has revised the rate models and has completed a Water and Sewer Rate Study Draft Report (“Study”) based on the revised models; and WHEREAS, the Study recommends overall water and sewer rate adjustments as indicated in the attached report for June 15, 2022, and for each of the following four subsequent years on June 15: 2023, 2024, 2025, and 2026; and
WHEREAS, the Study recommends and provides justification for maintaining a three- tier water usage rate structure for single family residential customers and a uniform water usage rate for multi-family, non-residential, and irrigation accounts; and WHEREAS, in 2017, the City adopted Water Shortage Surcharges to protect the Water Enterprise from the revenue volatility associated with droughts, and while the current Study does not propose to renew that policy, the City can re-establish the Water Shortage Surcharge during the next rate study; and
WHEREAS, the Study recommends and provides justification for retaining the same basic sewer rate structure including 1) fixed bi-monthly service charge based on the size of the water meter, and 2) a uniform sewer usage rate for all customer accounts; and WHEREAS, in accordance with Government Code Section 50076, fees that do not exceed the reasonable cost of providing the service or regulatory activity for which the fees are charged and which are not levied for general revenue purposes are not special taxes; and WHEREAS, the Study demonstrates the recommended rates do not exceed the reasonable cost of providing water or sewer service and, as such, the proposed rates are not levied for general revenue purposes; and
WHEREAS, on April 11, 2022, the City Council accepted the Water and Sewer Rate Study with no changes and directed staff to proceed with the Proposition 218 public noticing process for the proposed water and sewer rate adjustments and set the date for the public hearing and adoption of rates to June 14, 2022; and
WHEREAS, at least 45 days in advance of the public hearing at which this Resolution was considered, notices including the proposed sewer and water service charges, the basis upon which the charges were calculated, the reason for the charges, together with the date, time and location of the public hearing on the proposed charges and written protest procedures against the proposed rate increases, were mailed to all property owners and customers in compliance with California Constitution Article XIII D, Section 6; and
WHEREAS, a public hearing was duly held, and at its conclusion the City staff tabulated the number of written protests received, if any, and reported there was not a majority protest of the proposed rates by owners or authorized representatives of identified parcels receiving such services; and
WHEREAS, after due consideration, the Cotati City Council finds based on the Study and in accordance with Article XIIID, Section 6 of the California Constitution that:
a. The proposed rates as presented herein are necessary to achieve full recovery of the costs of providing water and sewer services to residents and businesses in Cotati; b. The proposed rates as presented herein will not generate revenue in excess of the cost of providing water and sewer services;
c. The proposed rates as presented herein will not be used for purposes other than providing water and sewer services;
d. The rates or charges imposed on any parcel or person as an incident of property ownership do not exceed the proportional cost of the service attributable to the parcel; e. Proper notice of the proposed rate increases was given to record owners of properties that would be impacted by the proposed increases, as prescribed by law; and f. A majority of record owners of properties that would be impacted by the proposed increases did not protest the proposed rate increases; and WHEREAS, adoption of revised rates and charges pursuant to this Resolution involves the establishment, modification, restructuring or approval of rates and charges, as identified and analyzed in the Study, including rates and charges to obtain funds for meeting operating expenses, purchasing or leasing supplies, equipment or materials, meeting financial reserve needs and requirements and/or obtaining funds for capital projects necessary to maintain service within existing service areas. Therefore, adoption of this Resolution setting sewer and water rates and charges is not a project under the California Environmental Quality Act pursuant to California Public Resources Code Section 21080(b)(8)(D) and 14 Cal. Code of Regs. Section 15273.
NOW THEREFORE BE IT RESOLVED THAT by the City of Cotati City Council:
1. The above recitals are hereby declared to be true and correct and to be findings of the City Council of the City of Cotati and are made a part of this Resolution.
2. Purpose. The purposes of the water and sewer service rates imposed pursuant to this Resolution are to: raise revenue for the cost of operation and maintenance of the City of Cotati’s water and sewer utilities. For the water utility, the revenue is used for collecting, pumping, treating, storing, and distributing water obtained from City wells and the Sonoma County Water Agency Aqueduct, and the cost of principal and interest on bonds and capital recovery costs of the water utility. For the sewer utility, the revenue is used for collecting and pumping sewage, paying for wastewater treatment and disposal services provided by the Santa Rosa Sub-regional System, and the cost of principal and interest on bonds and capital recovery costs of the water utility. The revenues are also used to establish a method of sharing the cost of the operation and maintenance of the City’s water and sewer utilities among the users of water and sewer services. The revenues and expenses are accounted for separately for the water and sewer utilities.
3. Study. This Resolution and the water and sewer charges established in this resolution are based on the Water and Sewer Rate Study, Final Report dated May 4, 2022 (“Study”) prepared by Hildebrand Consulting. The Study is attached to and made a part of this resolution as Exhibit A.
4. Water Service Charges. The City’s water service charges shall be as follows:
5. Sewer Service Charges. The City’s sewer service charges shall be as follows:
6. Effective Date. This Resolution shall become effective immediately. The rate increases listed in Sections 4 and 5 for 2022-2026 shall become effective on June 15th of the years indicated on the tables.
7. Severability. Each component of the rates and all portions of this Resolution are severable. Should any individual component of the rates or any portion of this Resolution be adjudged to be invalid and unenforceable by a body of competent jurisdiction, then the remaining rate components and/or Resolution portions shall be and continue in full force and effect, except as to those rate components and/or Resolution portions that have been adjudged invalid. The City Council hereby declares that it would have adopted this Resolution and each section, subsection, clause, sentence, phrase, and other portion thereof, irrespective of the fact that one or more section, subsection, clause, sentence, phrase or other portion may be held invalid or unconstitutional.
8. Supersession/Repeal/Savings. Any and all other resolutions and ordinances and parts thereof in conflict with the provisions of this Resolution are superseded and repealed, effective on the effective date of this Resolution. However, violations, rights accrued, liabilities accrued, or appeals taken, prior to the effective date of this Resolution, under any chapter, ordinance, or part of an ordinance, or resolution or part of a resolution, shall be deemed to remain in full force for the purpose of sustaining any proper suit, action, or other proceedings, with respect to any such violation, right, liability or appeal.
IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on the June 14th, 2022, by the following vote, to wit:
Approved:________________________________
Mayor
Attest:____________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:
____________________________
City Attorney