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8 DATE: April 20, 2026
TO: President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, District Manager
Marlene Subhashini, Assistant District Manager
FROM: Andrew Brozyna, Public Works Director
Nate Cruz, Finance Director
DEPARTMENT: Public Works
SUBJECT: CONFIRMING PREVIOUSLY ADOPTED WASTEWATER RATES EFFECTIVE JULY 1, 2025, WITH ANNUAL ADJUSTMENTS
EACH JULY 1 THROUGH JULY 1, 2029
RECOMMENDATION
It is recommended that the Board of Directors of the Estero Municipal Improvement District (EMID) review the attached study on Wastewater Rates, which confirms that no change is recommended to the previously adopted Wastewater Rates effective July 1, 2025, with annual adjustments each July 1 through 2029.This is an informational item only no action is needed.
EXECUTIVE SUMMARY
On March 24, 2025, the EMID Board held a Budget Study Session to consider an analysis of proposed wastewater rates for a five-year period from FY 2025-2026 to FY 2029-2030 conducted by EMID's rate consultant, Bartle Wells Associates (BWA).
Pursuant to direction received from the EMID Board at that meeting, staff prepared a public hearing notice of the proposed adoption of maximum new wastewater rates.
In conformance with Proposition 218 and AB 2257, a public hearing notice with the proposed rates was mailed to all record property owners and customers of record on March 31, 2025. For this five-year rate cycle, it was recommended to hold the rate for FY 2025-2026, and increase the rate by 2% annually in FY 2026-2027 through FY 2029-
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8 2030. A public hearing was held, and the rates were adopted on June 2, 2025.
BACKGROUND/ANALYSIS
EMID provides wastewater service to over 13,980 residential, commercial and institutional accounts.
The rates that residential wastewater customers pay are based on a fixed charge for the category or type of residential unit (single family, townhouse/duplex, or apartment/condominium). Commercial customers are charged a variable rate based upon the amount of water consumed by their business and the business wastewater strength category.
EMID is responsible for its share of operating and maintenance costs that San Mateo (as the lead agency and the contracting party) incurs treating the District’s wastewater, as well as 24% of the capital improvement costs and 12% of program management costs incurred as part of the Clean Water Program (CWP), a multi-year comprehensive capital improvement project initiated in 2014 to replace aging infrastructure and meet regulatory requirements at the Wastewater Treatment Plant (WWTP). The District also has operational costs associated with the wastewater enterprise services.
On March 24, 2025, the EMID Board held a Budget Study Session regarding updated wastewater rates to be effective July 1, 2025, with annual increases through July 1, 2029. At the Budget Study Session, the EMID Board considered information developed by EMID's rate consultant, BWA, and approved the Rate Setting Procedures which incorporate and implement the requirements contained in Proposition 218 and the procedures by which property owners/rate payers are required to exhaust administrative remedies as set forth in Government Code section 53759.1 and 53759.2 (AB 2257). Pursuant to that direction and in conformance with Proposition 218, staff prepared and mailed the public hearing notice with the proposed rates by March 31, 2025.
A public hearing was held on June 2, 2025, there was no majority protest to the rates, and the rates adopted were effective July 1, 2025, with annual adjustments each July 1 through 2029. The rate included no increase for FY 2025-2026, and an increase of 2% annually in FY 2026-2027 through FY 2029-2030. For each annual update to the water rates authorized through July 1, 2029, a supplemental notice will be provided by the District to rate payers at least 30 days prior to the effective date of each update.
The proposed rates provide adequate revenue for operations, capital expenditures and transfers, and maintain the operating fund balance at or above target levels. The rates include consideration of the joint cost of the WWTP, and the operational and maintenance costs related to wastewater, local wastewater collection system operations, and capital improvement projects.
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8 Projections for the need for 2% increases in Fiscal Year 2026-2027 through 2029-2030 are included in Table 2 from the BWA Rate Study.
The EMID Board has implemented a long-term rate smoothing model that considers long-range projections for wholesale water rates and significant capital improvements and maintains rate increases at no greater than 10% per year. The proposed rates were prepared using a 15-year model, which has proven to be successful in dampening rate spikes. EMID customers will be notified of the previously approved rate change at least 30 days prior to the change in rates.
CALIFORNIA ENVIRONMENTAL QUALITY ACT
This action is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code Section 21080(b)(8), and California Code of Regulations Section 15273 (of the “CEQA Regulations”) because it establishes, modifies, structures, or restructures, and approves rates and charges for the purposes of: (1) meeting operating expenses; (2) purchasing supplies, equipment and materials; (3) meeting financial requirements; and (4) obtaining funds for capital projects necessary to maintain service within existing service areas. Additionally, it is exempt per CEQA General Rule, Section 15061 (b) (3)
FISCAL IMPACT
The adopted wastewater rates will cover the projected system expenditures while adhering to budget policy objectives established by the EMID Board related to
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8 enterprise funds. All fiscal impacts for the wastewater system are borne by wastewater system customers. There is no General Fund impact.
VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
Innovation and Sustainability
Smart Planning, Development, and the Local Economy
ATTACHMENTS:
Attachment 1 – Bartle Wells Associates Wastewater Rate Study Analysis Attachment 2 – EMID Resolution No. 3805 Adopting Wastewater Rates effective July 1, 2025, with annual adjustments each July 1 through 2029