City of Hayward
Sewer Rate and Connection Fee Study
Alex Ameri,
Director of Public Works
1 Public Hearing
February 18, 2025
Study Overview
Sewer Rates
• Recovers costs for existing sewer system and current customers • Financial plan to determine revenue needs and maintain financial sufficiency • Cost-of-service analysis to equitably allocate costs between customers • Sewer rate calculation to develop five-year rate schedule Sewer Connection Fees
• Recovers costs for remaining capacity in existing system and future system • System asset valuation to determine cost of existing and future sewer system • “Growth pays for growth”
2 Water Resource Recovery Facility
Why is This Project Necessary?
• 3rd Nutrient Watershed Permit Order by Regional Water Board • Reduce nutrients in wastewater by 53% by 2034 to comply with regulations What are the Financial Impacts?
• WRRF Phase II project costs total $488 million
• No grants or other sources of funding available
• City plans to fund via WIFIA Loans ($243 million) and revenue bonds ($215 million)
3 Sewer Rates
Financial Plan
• CIP to meet regulatory requirements and replace aging infrastructure • Meet debt coverage requirements for new debt to fund CIP • Meet reserve policy targets for cash flow and emergencies • 12% revenue adjustments per year, starting FY 2026
Sewer Rate Overview
• No changes to rate structure
• Conducted cost-of-service to prove “nexus” required by Proposition 218 • Five-year sewer rate schedule
4 May 31, 2022 5
Residential Sewer Bill Comparison
• Weighted average residential sewer charge is ~$35/month • ~40% of Hayward residential customers benefit from Economy and Lifeline rates 5 May 31, 2022 6
Restaurant Sewer Bill Comparison
6 May 31, 2022 7
Sewer Connection Fee Comparison
• Surveyed agencies with Nutrient Removal projects may not have included costs of those projects in current connection fees
7 Public Outreach and Response
• Public hearing notices sent to all property owners, tenants, and bill payers on record (Proposition 218 only requires notification of owners) • Council cannot adopt rates if protests are received from a majority of property owners (about 17,000 protests)
• 42 written protest notices received as of close of business on February 4 • Proposed rates published twice in newspaper
• Proposed connection fee information distributed to developers, Building Industry Association, and the Chamber of Commerce Government Relations Council
8 Public Hearing and Schedule
1. Council Questions
2. Open Public Hearing
3. Council Discussion and Action
Recommendation: That the Council adopts resolutions amending the Master Fee Schedule and approving the proposed sewer rates and connection fees and finding the action is exempt from CEQA review.
Effective dates:
• Sewer Rates: Annually from July 1, 2025 to July 1, 2029 • Sewer Connection Fees: September 1, 2025 and September 1, 2026 9 Discussion
Thank you!