Regular Council Meeting
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CirY CLERK'S OFF iCE
FRESNO CITY COUNCIL
October 8, 2026
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Supplement Packet
ITEM(S)
2.-N (ID 26-1280)
Actions related to initiating the Proposition 218 process for proposed updates and increases to the schedule of rates for water and wastewater services
[TITLE TRUNCATED FOR SUPPLEMENTAL PACKET COVER PAGE]
Contents of Supplement: DPU Water and Wastewater Rate Updates October 8, 2026
ltem(s)
Supplemental Information:
Any agenda related public documents received and distributed to a majority of the City Council after the Agenda Packet is printed are included in Supplemental Packets.
Supplemental Packets are produced as needed. The Supplemental Packet is available for public inspection in the City Clerk's Office, 2600 Fresno Street, during normal business hours (main location pursuant to the Brown Act, G.C. 54957.5(2). In addition, Supplemental Packets are available for public review at the City Council meeting in the City Council Chambers, 2600 Fresno Street. Supplemental Packets are also available on-line on the City Clerk's website.
Americans with Disabilities Act (ADA):
The meeting room is accessible to the physically disabled, and the services of a translator can be made available. Requests for additional accommodations for the disabled, sign language interpreters, assistive listening devices, or translators should be made one week prior to the meeting. Please call City Clerk's Office at 621-7650. Please keep the doorways, aisles and wheelchair seating areas open and accessible. If you need assistance with seatlnq because of a disability, please see Security.
October 8, 2026, City Council Meeting
Water and
Wastewater Rates
Updates
Today’s Actions
1. Direct City staff to initiate the Proposition 218
process for proposed updates and increases to
rates for water and wastewater services
2. Set a public hearing to consider proposed
updates and increases to rates for water and
wastewater services on December 3, 2026, at
5:00 p.m.
2 Discussion
1. Rate adjustment drivers and history
2. Proposition 218 requirements and process
3. Water rates overview
4. Wastewater rates overview
5. Customer engagement and education
3 Why we need rate
adjustments
● Create a charge reflective of the true cost
of service
● Maintain long-term financial stability of
water & wastewater operations
● Maintain our ability to continue providing a
high level of service
● Continue to meet/exceed all legal, Federal,
State Drinking Water & Clean Water
regulatory requirements
● Create stable investment in existing water
and wastewater infrastructure, so costs are
not deferred & higher in future
4 Water Rate History
Revenue has increased 4% since 2018 and
operating expenses have increased 36%
5 Wastewater Rates History
6 Revenue has increased 3% since 2018 and
operating expenses have increased 40%
7 Article XIIID, Section 6 of California Constitution (“Proposition 218”) requires that all water and sewer rates meet certain requirements.
Substantive:
• Total revenue from rates cannot exceed the City’s total costs of service • Revenues from rates can only be used for service
• Rates must be proportionate to the costs to serve each customer class • Realignment of rates
• The service must be immediately available to those charged The rate studies are intended to show that the proposed rates comply with Proposition 218’s substantive requirements.
Rates Must Comply With Proposition 218
Proposition 218’s
Procedural Requirements
• Mail notice to all property owners at least
45 days prior to the hearing with the
amount of proposed rates, basis for rate
calculation, a link to the rate studies,
reason for rate increase, and information
about how to protest the rates
• Receive, validate, and tabulate protests
before and during the hearing
• Hold a public hearing and consider the
proposed rates
• Council cannot adopt rates if protests are
submitted by a majority of parcels that
are subject to the rates
8 Long-Term Rate Planning Objectives
1. Proactive Planning and Economic Vitality
• Master Planning & 10-Year Financial Projection
• Complete plans & establish routine update cycle
• Maintain 10-year financial plans & rate models
2. Improve Financial Stability
• Implement consistent rate updates
• Increase Bond Rating
• Benefit: $84K savings in debt service per $1M
borrowed
9 Calculating Rates
10 Requirements
• Generate annual revenue needed for operating costs, capital investment, pay debt service, maintain reserves
• Establish rates that proportionally spread the cost of service to the different customer classes
Variables
• Monthly rates
• Debt financing
• End-of-year fund balance
Objectives
• Establish affordable monthly rates
• Balance pay-go & debt financing for capital improvements • Maintain adequate operating, capital, and rate stabilization reserves Water Rates To Meet Current Needs
11 • January 1, 2027, effective date
• $245M in 5-year capital plan, with $50M revenue bond proposed in FY30 • Major capital investment goals:
• Aging water main and fire hydrant replacement
• Production well and pump rehabilitation and replacement • Automated operations system and water meter renewal and replacement • Surface water treatment plant equipment replacement
• Master planning
• Increase staffing to enhance level of service and meet regulatory requirements Current FY27 FY28 FY29 FY30 FY31 Total
Average Single
Family Monthly Bill $47.48 $49.25 $51.97 $54.57 $57.44 $60.31 $ Increase $1.77 $2.72 $2.60 $2.87 $2.87 $12.83
% Increase 3.7% 5.5% 5.0% 5.3% 5.0% 27%
Fresno Water Rates Comparison
12 Wastewater Rates To Meet Current Needs
13 • January 1, 2027 effective date
• Completes cost of service true-up – small decrease in FY27 • $511M in 5-year capital plan, with $100M revenue bonds in FY28 and FY30 and $50M state revolving fund loan for new Sidestream treatment process • Major capital investment goals:
• Ramp up critical infrastructure renewal and replacement program (trunk sewers and treatment plan)
• New renewable natural gas process at treatment plant
• Complete Treatment Plant Master Plan
• Increase staffing to enhance level of service and manage high-risk infrastructure Current FY27 FY28 FY29 FY30 FY31 Total
Single Family
Monthly Bill $25.75 $24.80 $26.30 $27.85 $29.50 $31.30
$ Increase -$0.95 $1.50 $1.55 $1.65 $1.80 $5.55
% Increase -3.7% 6.0% 5.9% 5.9% 6.1% 22%
Fresno Wastewater Rates Comparison
14 Customer Engagement and Education
1. Notices will be mailed starting October 12
2. Nine public meetings across Fresno
3. City Hall kickoff meeting October 20
4. Commercial and industrial customer outreach
5. Community organization outreach
6. Public Hearing December 3
15 •6
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•4
•7
•2
• •8
5 •3
•9
1. October 20 - City Hall
2. October 22 - Sunnyside High
3. October 27 - Figarden Elementary
4. October 29 - Duncan Polytechnical
5. November 5 - Steinbeck Elementary
6. November 10 - Gaston Middle School
7. November 12 - Fresno High
8. November 17 - Oraze Elementary
9. November 19 - Fort Washington Elementary
Community Meeting Locations
October 8, 2026, City Council Meeting
Water and
Wastewater Rates
Updates