Water and Sewer Rate Study
City of Fort Bragg
January 12, 2026
Background
The City of Fort Bragg currently provides water and sewer service to about 2,700 customers The City last raised rates in 2019. Since then, there have been several court rulings against tiered water rates.
Both utilities are currently doing well financially with reasonable reserves and positive net revenues (i.e. revenues are covering expenses) The City has been very successful in securing grants for many infrastructure projects However, rate increases are needed to keep up with inflation and fund improvements that likely won’t be covered by grants This rate study proposes new rates each July 1 from 2026 to 2030 LT presented to the Finance Committee on 12/10. This presentation reflects the Committee’s input. 2 Legal Requirements: Proposition 218
3 Governs how water and sewer service charges can be calculated and adopted Rates can be adopted over a maximum 5-year period with a single study Rates must be based on the reasonable cost of providing service Rates must proportionally recover costs based on how customers take service Procedural requirements for adopting rate adjustments: mail a notice of hearing and conduct hearing at least 45 days later Ratepayers can block the increase with a 50% protest
WATER ENTERPRISE
Current Monthly Water Rates
5 Meter Size
Monthly Rate
Residential Customers
5/8 & 3/4"
$36.86
1"
$52.42
1.5"
$62.80
2"
$109.16
3"
$157.76
4"
$206.38
6"
$498.01
Non-Residential Customers
5/8 & 3/4" Low-Usage Customers
$36.86
5/8 & 3/4"
$74.98
1"
$115.09
1.5"
$141.83
2"
$275.53
3"
$409.24
4"
$542.94
6"
$1,234.61
Rate per HCF
Single Family Residential
Tier 1: 0-5 HCF
$3.49
Tier 2: 6-10 HCF
$5.23
Tier 3: 11+ HCF
$7.84
Non-Single Family Residential
All Use
$6.01
Fixed meter fees
+ Usage Rates
HCF = hundred cubic feet
1 HCF = 748 gallons
Current Avg Residential Water Bill
6 Rate
Count
Charges
Meter Fee 5/8”
$36.86
X
1 $36.86
Usage Rates
Tier 1: 0-5 HCF
$3.49
X
4 $13.96
Tier 2: 6-10 HCF
$5.23
X
0 $0.00
Tier 3: 11+ HCF
$7.84
X
0 $0.00
TOTAL MONTHLY BILL
$50.82
13 HCF of use = $103.98 monthly bill
Current Water System Financial Standing
7 Current reserves of about $4.8M
Current revenues of about $3M are covering expenses of about $2.8M resulting in net positive revenues of about $200,000.
The City must fund needed infrastructure improvements via rates totaling $1.55M over the next 5 years Noyo River Crossing ($1.2M)
Cedar Street Water Line Design ($320,000) – from the Master Plan; will upsize to a 16” main Oak Street Valves ($30,000) - Addition of two isolation valves to 10-inch water main on Oak Street Plus, the Cedar Street Water Line Construction of $3.3M is proposed to be debt financed and will result in annual payments of $168,400 beginning in FY2029/30
Water Financial Projection
8 Average revenue increases shown above. Not every customer will receive exactly the % increase shown due to rate structure changes.
Rate Option A (presented to Fin. Com. on 12/10) = 9% rate increases NEW Rate Option B (lower meter fees) =
8% rate increases
Water Rate Design
9 Rate design changes are proposed to comply with Proposition 218, industry best practices, and recent court cases Proposed changes:
Combine the separate residential and commercial meter fees into one rate schedule for all customers by the end of the five-year rate plan. Similar customers must have similar rates.
Dedicate a portion of existing cash reserves to phase the residential meter fees in over 5 years to mitigate impacts on customers Eliminate the single family residential tiered usage rates All customers will pay the same usage rates at all levels of usage 2 revenue recovery options:
Both options will fund operations and the same amount of capital costs The difference is how the rates will be recovered between the meter fees and volume rates
2 Water Revenue Recovery Options
10 OPTION A: Maintain Current Revenue Recovery (Presented on 12/10) 56% Meter Fees / 44% Volume Rates
Provides greater revenue stability
Reflects that the majority of Water Fund expenses are fixed Customers, especially low water users, have less control over their bills 9% revenue increases proposed, FY2027/28 - FY2030/31
OPTION B: Lower Meter Fees (NEW!)
35% Meter Fees / 65% Volume Rates
Gives customers more control over monthly bills
Revenues can vary especially during times of drought
8% revenue increases proposed, FY2027/28 - FY2030/31
Proposed Water Meter Fees – Option A
11 Meter Size
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
5/8 & 3/4"
$36.86
$36.86
$35.00
$40.29
$45.58
$50.87
$56.17
1"
$52.42
$52.42
$60.00
$67.55
$75.10
$82.65
$90.20
1.5"
$62.80
$62.80
$90.00
$111.32
$132.64
$153.96
$175.26
2"
$109.16
$109.16
$160.00
$189.34
$218.68
$248.02
$277.34
3"
$157.76
$157.76
$220.00
$302.39
$384.78
$467.17
$549.56
4"
$206.38
$206.38
$400.00
$513.95
$627.90
$741.85
$855.80
6"
$498.01
$498.01
$700.00
$951.62
$1,203.24
$1,454.86
$1,706.46
Non-Residential
5/8 & 3/4" Low-Usage
$36.86
$36.86
$35.00
$40.29
$45.58
$51.54
$56.17
5/8 & 3/4"
$74.98
$74.98
$39.80
$43.37
$47.28
$51.54
$56.17
1"
$115.09
$115.09
$63.91
$69.64
$75.92
$82.76
$90.20
1.5"
$141.83
$141.83
$124.17
$135.33
$147.52
$160.81
$175.26
2"
$275.53
$275.53
$196.49
$214.15
$233.44
$254.47
$277.34
3"
$409.24
$409.24
$389.35
$424.33
$462.56
$504.23
$549.56
4"
$542.94
$542.94
$606.31
$660.79
$720.32
$785.21
$855.80
6"
$1,234.61
$1,234.61
$1,208.97
$1,317.63
$1,436.32
$1,565.71
$1,706.46
Meter Size
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
5/8 & 3/4"
$36.86
$36.86
$35.00
$40.29
$45.58
$50.87
$56.17
1"
$52.42
$52.42
$60.00
$67.55
$75.10
$82.65
$90.20
1.5"
$62.80
$62.80
$90.00
$111.32
$132.64
$153.96
$175.26
2"
$109.16
$109.16
$160.00
$189.34
$218.68
$248.02
$277.34
3"
$157.76
$157.76
$220.00
$302.39
$384.78
$467.17
$549.56
4"
$206.38
$206.38
$400.00
$513.95
$627.90
$741.85
$855.80
6"
$498.01
$498.01
$700.00
$951.62
$1,203.24
$1,454.86
$1,706.46
SAME
Proposed Water Usage Rates ($/HCF) – Option A
12 Current
Single Family Residential
Tier 1: 0-5 HCF
$3.49
Tier 2: 6-10 HCF
$5.23
Tier 3: 11+ HCF
$7.84
Non-Single Family Residential
All Use
$6.01
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
$5.28
$5.76
$6.28
$6.84
$7.46
All usage ($/HCF)
Proposed Water Meter Fees – Option B
13 Meter Size
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
5/8 & 3/4"
$36.86
$36.86
$35.00
$40.29
$45.58
$50.87
$56.17
1"
$52.42
$52.42
$60.00
$67.55
$75.10
$82.65
$90.20
1.5"
$62.80
$62.80
$90.00
$111.32
$132.64
$153.96
$175.26
2"
$109.16
$109.16
$160.00
$189.34
$218.68
$248.02
$277.34
3"
$157.76
$157.76
$220.00
$302.39
$384.78
$467.17
$549.56
4"
$206.38
$206.38
$400.00
$513.95
$627.90
$741.85
$855.80
6"
$498.01
$498.01
$700.00
$951.62
$1,203.24
$1,454.86
$1,706.46
Non-Residential
5/8 & 3/4" Low-Usage
$36.86
$36.86
$25.49
$27.53
$29.73
$32.11
$34.68
5/8 & 3/4"
$74.98
$74.98
$25.49
$27.53
$29.73
$32.11
$34.68
1"
$115.09
$115.09
$39.94
$43.14
$46.59
$50.32
$54.35
1.5"
$141.83
$141.83
$76.08
$82.18
$88.74
$95.83
$103.51
2"
$275.53
$275.53
$119.44
$129.02
$139.32
$150.45
$162.51
3"
$409.24
$409.24
$235.06
$253.92
$274.20
$296.11
$319.85
4"
$542.94
$542.94
$365.14
$394.44
$425.94
$459.97
$496.85
6"
$1,234.61
$1,234.61
$726.48
$784.78
$847.44
$915.13
$988.51
Meter Size
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
5/8 & 3/4"
$36.86
$36.86
$25.49
$27.53
$29.73
$32.11
$34.68
1"
$52.42
$52.42
$39.94
$43.14
$46.59
$50.32
$54.35
1.5"
$62.80
$62.80
$76.08
$82.18
$88.74
$95.83
$103.51
2"
$109.16
$109.16
$119.44
$129.02
$139.32
$150.45
$162.51
3"
$157.76
$157.76
$190.00
$222.46
$254.92
$287.38
$319.85
4"
$206.38
$206.38
$265.00
$322.96
$380.92
$438.88
$496.85
6"
$498.01
$498.01
$600.00
$697.13
$794.26
$891.39
$988.51
SAME
Proposed Water Usage Rates ($/HCF) – Option B
14 Current
Single Family Residential
Tier 1: 0-5 HCF
$3.49
Tier 2: 6-10 HCF
$5.23
Tier 3: 11+ HCF
$7.84
Non-Single Family Residential
All Use
$6.01
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
$7.74
$8.36
$9.03
$9.75
$10.53
All usage ($/HCF)
Proposed Meter Fee Comparison (FY’27)
15 Meter Size
Current
OPTION A
OPTION B
Residential Customers
5/8 & 3/4"
$36.86
$36.86
$35.00
$25.49
1"
$52.42
$52.42
$60.00
$39.94
1.5"
$62.80
$62.80
$90.00
$76.08
2"
$109.16
$109.16
$160.00
$119.44
3"
$157.76
$157.76
$220.00
$190.00
4"
$206.38
$206.38
$400.00
$265.00
6"
$498.01
$498.01
$700.00
$600.00
Non-Residential
5/8 & 3/4" Low-Usage
$36.86
$36.86
$35.00
$25.49
5/8 & 3/4"
$74.98
$74.98
$39.80
$25.49
1"
$115.09
$115.09
$63.91
$39.94
1.5"
$141.83
$141.83
$124.17
$76.08
2"
$275.53
$275.53
$196.49
$119.44
3"
$409.24
$409.24
$389.35
$235.06
4"
$542.94
$542.94
$606.31
$365.14
6"
$1,234.61
$1,234.61
$1,208.97
$726.48
Proposed Volume Rate Comparison
16 Current
Single Family Residential
Tier 1: 0-5 HCF
$3.49
Tier 2: 6-10 HCF
$5.23
Tier 3: 11+ HCF
$7.84
Non-Single Family Residential
All Use
$6.01
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
$5.28
$5.76
$6.28
$6.84
$7.46
All usage ($/HCF)
OPTION A
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
$7.74
$8.36
$9.03
$9.75
$10.53
OPTION B
Bill Comparison at Various Levels of Use
17 Avg Water Bill 5-Year Comparison
18 Water Bill Survey
19 SEWER ENTERPRISE
Current Monthly Sewer Rates
21 Customer Type
Monthly Rate
Residential Customers
per dwelling
Single Family Residential
$28.89
Multi-Family Residential
$28.89
Mobile Home Parks
$28.89
Non-Residential Customers
per business
Low Strength
$28.89
Medium Strength
$28.89
Breweries
$29.89
High Strength
$28.89
Fixed fees
+ Flow Rates
HCF = hundred cubic feet
1 HCF = 748 gallons
Residential sewer flow is based on winter water usage subject to a 2HCF minimum Customer Type
$/HCF
Residential Customers
Single Family Residential
$7.31
Multi-Family Residential
$3.28
Mobile Home Parks
$0.23
Customer Type
$/HCF
Residential Customers
Single Family Residential
$7.31
Multi-Family Residential
$3.28
Mobile Home Parks
$0.23
Non-Residential Customers
Low Strength
$9.90
Medium Strength
$10.19
Breweries
$20.30
High Strength
$25.38
Current Avg Residential Sewer Bill
22 Rate
Count
Charges
Fixed Fee
$28.89
X
1 $28.89
Flow Rate
$7.31
X
4 $29.24
TOTAL MONTHLY BILL
$58.13
Current Sewer System Financial Standing
23 Current reserves of about $3.6M
Current revenues of about $3.6M are covering operating expenses of about $3.1M + debt service of $186,000 resulting in positive net revenues of about $329,000.
This year, the City will draw down reserves about $2.6M to fund the biosolid dryer building design, biosolids storage building, and pipeline work The City’s wastewater master planning team has identified $12M of sewer pipeline improvements. This rate study will fund the first $5M via rate revenues.
This is an on-going program to repair sewer mains that are failing when leak repairs have become chronic or a significant source of inflow & infiltration (I&I) has been identified.
Plus, the Wastewater Treatment Plant Main Replacement of $4.5M is proposed to be debt financed and will result in annual payments of $230,000 beginning in FY2029/30. This the 36” line that leads to the plant.
Sewer Financial Projection
24 Average revenue increases shown above. Not every customer will receive exactly the % increase shown due to rate structure changes.
Sewer Rate Design
25 Similar to the proposed water options, 2 revenue recovery options for how to recover costs between fixed fees and flow rates Proposed total annual revenue increases are the same for both options OPTION A: Higher fixed charge (12/10 Proposal)
OPTION B: Lower fixed charge (NEW!)
Proposed changes to flow rates
All residential flow will have the same cost
Residential flow and medium strength commercial will have the same flow rate
Proposed Fixed Sewer Charges
26 Customer Type
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
Per dwelling
+12%
+12%
+12%
+12%
All Residential Customers
$28.89
$14.47
$16.21
$18.16
$20.34
$22.78
Non-Residential Customers
Per business
All businesses
$28.89
$14.47
$16.21
$18.16
$20.34
$22.78
OPTION A (12/10 Proposal) Fixed Charges
OPTION B (New Option) Fixed Charges
Customer Type
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
Per dwelling
+12%
+12%
+12%
+12%
All Residential Customers
$28.89
$24.22
$27.13
$30.39
$34.04
$38.12
Non-Residential Customers
Per business
All businesses
$28.89
$24.22
$27.13
$30.39
$34.04
$38.12
Proposed Sewer Flow Rates ($/HCF) – Option A
27 HCF = hundred cubic feet
1 HCF = 748 gallons
Single family residential sewer flow is based on winter water usage subject to a 2HCF minimum Customer Type
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
+12%
+12%
+12%
+12%
Single Family Residential
$7.31
$11.05
$12.38
$13.87
$15.53
$17.39
Multi-Family Residential
$3.28
$11.05
$12.38
$13.87
$15.53
$17.39
Mobile Home Parks
$0.23
$11.05
$12.38
$13.87
$15.53
$17.39
Non-Residential Customers
Low Strength
$9.90
$9.90
$11.09
$12.42
$13.91
$15.58
Medium Strength
$10.19
$11.05
$12.38
$13.87
$15.53
$17.39
Breweries
$20.30
$16.32
$18.28
$20.47
$22.93
$25.68
High Strength
$25.38
$18.54
$20.76
$23.25
$26.04
$29.16
Proposed Sewer Flow Rates ($/HCF) – Option B
28 HCF = hundred cubic feet
1 HCF = 748 gallons
Single family residential sewer flow is based on winter water usage subject to a 2HCF minimum Customer Type
Current
FY2026/27
FY2027/28
FY2028/29
FY2029/30
FY2030/31
Residential Customers
+12%
+12%
+12%
+12%
Single Family Residential
$7.31
$12.93
$14.48
$16.22
$18.17
$20.35
Multi-Family Residential
$3.28
$12.93
$14.48
$16.22
$18.17
$20.35
Mobile Home Parks
$0.23
$12.93
$14.48
$16.22
$18.17
$20.35
Non-Residential Customers
Low Strength
$9.90
$11.39
$12.76
$14.29
$16.00
$17.92
Medium Strength
$10.19
$12.93
$14.48
$16.22
$18.17
$20.35
Breweries
$20.30
$20.01
$22.41
$25.10
$28.11
$31.48
High Strength
$25.38
$22.98
$25.74
$28.83
$32.29
$36.16
Bill Comparison at Various Levels of Use
29 Avg Sewer Bill 5-Year Comparison
30 Current & Proposed Multi-Family Sewer Bill
31 Current
Proposed July 1, 2026
Rate
Count
Charges
Fixed Fee
$28.89
X
1 $28.89
Flow Rate
$3.28
X
3 $9.84
TOTAL BILL
$38.73
OPT A
Rate
Count
Charges
Fixed Fee
$24.22
X
1 $24.22
Flow Rate
$11.05
X
3 $33.15
TOTAL BILL
$57.37
+48.1%
OPT B
Rate
Count
Charges
Fixed Fee
$14.47
X
1 $14.47
Flow Rate
$12.93
X
3 $38.79
TOTAL BILL
$53.26
+37.5%
The City serves about 1,000 multi-family dwelling units
Current & Proposed Mobile Home Sewer Bill
32 Current
Proposed July 1, 2026
Rate
Count
Charges
Fixed Fee
$28.89
X
1 $28.89
Flow Rate
$0.23
X
2 $0.46
TOTAL BILL
$29.35
OPT A
Rate
Count
Charges
Fixed Fee
$24.22
X
1 $24.22
Flow Rate
$11.05
X
2 $22.10
TOTAL BILL
$46.32
+57.8%
OPT B
Rate
Count
Charges
Fixed Fee
$14.47
X
1 $14.47
Flow Rate
$12.93
X
2 $25.86
TOTAL BILL
$40.33
+37.4%
The City serves about 200 mobile home dwelling units
Sewer Survey
33 34
Water & Sewer Combined Survey
35 Single Family Water & Sewer Bill Impacts
Single family residential customer with a 5/8” meter, 4 HCF monthly water use, and 4 HCF sewer flow
Current
Proposed
July 1, 2026
July 1, 2027
July 1, 2028
July 1, 2029
July 1, 2030
Water OPT A
$50.82
$56.12
$63.33
$70.70
$78.23
$86.01
Sewer OPT A
$58.13
$68.42
$76.65
$85.87
$96.16
$107.68
Total Bill
$108.95
$124.54
$139.98
$156.57
$174.39
$193.69
$ Increase
$15.59
$15.44
$16.59
$17.82
$19.30
% Increase
14.3%
12.4%
11.9%
11.4%
11.1%
Water OPT B
$50.82
$56.45
$60.97
$65.85
$71.11
$76.80
Sewer OPT B
$58.13
$66.19
$74.13
$83.04
$93.02
$104.18
Total Bill
$108.95
$122.64
$135.10
$148.89
$164.13
$180.98
$ Increase
$13.69
$12.46
$13.79
$15.24
$16.85
% Increase
12.6%
10.2%
10.2%
10.2%
10.3%
36 Sample Multi-Family Water & Sewer Bill Impacts
Multi-family residential customer with 69 units, a 6” meter, and 177 HCF monthly water use and sewer flow
Current
Option A
Option B
Rate
Count
Total
Rate
Count
Total
Rate
Count
Total
Water Bill
Fixed Charge - 6"
$498.01
x
1 $498.01
$700.00
x
1 $700.00
$600.00
x
1 $600.00
Variable Charge
$6.01
x
177
$1,063.77
$5.28
x
177
$934.56
$7.74
x
177
$1,369.98
Total Water Bill
$1,561.78
$1,634.56
$1,969.98
Sewer Bill
Fixed Fee
$28.89
x
69 $1,993.41
$24.22
x
69 $1,671.18
$14.47
x
69 $998.43
Flow Rate
$3.28
x
177
$580.56
$11.05
x
177
$1,955.85
$12.93
x
177
$2,288.61
Total Sewer Bill
$2,573.97
$3,627.03
$3,287.04
Total Combined Bill
$4,135.75
$5,261.59
$5,257.02
Bill per Unit
$59.94
$76.25
$76.19
37 Sample Mobile Home Water & Sewer Bill Impacts
Mobile residential customer with 46 units, a 4” meter, and 210 HCF monthly water use and sewer flow
Current
Option A
Option B
Rate
Count
Total
Rate
Count
Total
Rate
Count
Total
Water Bill
Fixed Charge - 4"
$206.38
x
1 $206.38
$400.00
x
1 $400.00
$265.00
x
1 $265.00
Variable Charge
$6.01
x
210
$1,262.10
$5.28
x
210
$1,108.80
$7.74
x
210
$1,625.40
Total Water Bill
$1,468.48
$1,508.80
$1,890.40
Sewer Bill
Fixed Fee
$28.89
x
46 $1,328.94
$24.22
x
46 $1,114.12
$14.47
x
46 $665.62
Flow Rate
$0.23
x
210
$48.30
$11.05
x
210
$2,320.50
$12.93
x
210
$2,715.30
Total Sewer Bill
$1,377.24
$3,434.62
$3,380.92
Total Combined Bill
$2,845.72
$4,943.42
$5,271.32
Bill per Unit
$61.86
$107.47
$114.59
Wrap Up
38 Please provide direction regarding the rate options or other proposed changes LTMC will finalize the rate recommendation, provide a final report, and request authorization to move forward with public outreach All ratepayers and property owners will be provided written notice of the proposed rate change 45 days in advance of a public hearing At the public hearing, residents may provide written and verbal comments. We will tally any protests received. Absent a majority protest, the City can adopt the rates.