Sewer Rate Study Establishing Rate Schedule for Fiscal Years 2026 27 to FY 2030

POINT ARENA CITY COUNCIL

AGENDA ITEM SUMMARY
AGENDA ITEM: IX A
MEETING DATE: 4/21/2026
TITLE
Sewer Rate Study Establishing Rate Schedule for Fiscal Years 2026-27 to FY 2030-31

RECOMMENDED ACTION

1. Select a rate schedule from the Sewer Rate Proposal Tables (ATT 2) options or provide direction

2. Authorize staff and LT Municipal Consultants to complete Prop 218 public hearing process

3. Approve the hearing date May 27, 2026, at 5:30pm

ANALYSIS
The City of Point Arena provides wastewater service to approximately 155 parcels, consisting of 105 residential and 50 non-residential customers. The current wastewater rate structure is a fixed monthly charge of $69.12 per residential equivalent unit, which is collected annually on the property tax roll. Sewer flows are not metered; therefore, the City must rely on standardized methodologies to equitably allocate costs among users.

The City’s last comprehensive wastewater rate study was completed in 2016, and rates were most recently increased in 2021. Since that time, operating costs, regulatory requirements, and capital needs have continued to increase, while revenues have not kept pace. As a result, the wastewater enterprise fund is currently operating with a negative fund balance (~$66,000) and existing rates are insufficient to fully support ongoing operations, capital maintenance, and reserve funding.

The Wastewater Fee Study prepared by LT Municipal Consultants evaluates the City’s near-term and long-term financial needs based on a comprehensive review of:
• FY 2025–26 budget projections
• FY 2024–25 year-end actuals
• Current enterprise fund cash position
• Existing reserve policies
• Operational and staffing needs
• Tax roll data and customer classifications
• Wastewater flow and loading data (including BOD and TSS) • Anticipated capital improvement and infrastructure replacement needs The City’s wastewater treatment plant (WWTP) and collection system are its most significant and critical infrastructure assets. While the facility is operating within permit requirements, the system remains aging and increasingly vulnerable. At current rate levels, the operations budget is insufficient to sustain proper system management, and the City is not funding reserves at levels recommended by industry standards. This creates significant financial and operational risk, particularly in the event of system failures, emergency repairs, or extreme weather events.

The study therefore recommends a rate structure designed to achieve the following objectives over a five-year planning horizon:
• Eliminate the existing operations fund deficit
• Establish and maintain adequate operating reserves
• Fund routine and preventative maintenance
• Build capital replacement and repair (R&R) reserves
• Provide funding capacity for major capital improvements • Position the City to meet grant and loan match requirements Consistent with Proposition 218, the proposed rates are based on the reasonable cost of providing service and include a documented methodology for allocating costs among customer classes. The proposed rate design maintains a fixed charge structure billed via the tax roll, while refining how costs are distributed across land uses to better reflect typical wastewater generation and pollutant loading characteristics.

Specifically:
• Residential customers will continue to be billed per dwelling unit • Hotels will be billed per room
• Schools will be billed based on student population
• Most non-residential users will be billed per 1,000 square feet These allocations are based on industry-standard wastewater generation factors as well as observed data from comparable systems, including the City of Fort Bragg.

The study further recommends establishing two operational reserve categories:

1. Emergency Reserve – to address unplanned failures, storm events, and urgent compliance issues

2. Budget Stabilization Reserve – to address variability in staffing, operations, and regulatory costs
Implementation of the proposed rate adjustments is critical to ensuring the long-term financial sustainability of the wastewater enterprise and reducing the risk of catastrophic system failures or regulatory non-compliance. Without corrective action, the City will likely face increasing financial strain, deferred maintenance, and heightened exposure to environmental and public health risks.

Finally, adoption of updated rates must follow the procedural requirements of Proposition 218, including mailed notice to property owners, a public protest process, and a duly noticed public hearing. The proposed schedule would allow for rate adoption and implementation by July 1, ensuring timely alignment with the City’s fiscal and operational needs.

FISCAL IMPACT
Fiscal security for the WWTP enterprise funds and the City General Fund

ATTACHMENTS

1. Sewer Rate Study Presentation

2. Sewer Rate Proposal Tables

3. Prop 218 Notice

CITY MANAGER SIGNATURE
_________________________________
Molly C. Haviland, City Manager
Sewer Rate Study
City of Point Arena
April 21, 2026
Background
▪ There are about 155 parcels in Point Arena receiving sewer service ▪ 105 Residential parcels
▪ 50 Non-residential parcels
▪ The last rate study was conducted in 2016; rates last increased 2021 ▪ The current rate is $69.12 per month per residential customer ▪ The rate is a fixed charge that is billed annually on the property tax roll ▪ The goals of this rate study are:
▪ Comply with grant program requirements
▪ Fund operating costs
▪ Fund capital improvement projects
▪ Repay negative fund balance
▪ Document the apportionment of rates to various landuses 2 Proposition 218
▪ Governs how property-related charges are calculated and adopted ▪ Rates must be based on the reasonable cost of service ▪ Rates can be adopted over a maximum 5-year period with a single study ▪ Revenues from rates can only be used for intended purpose ▪ Procedural requirements:
▪ Conduct a rate study
▪ Mail a notice to property owners
▪ Allow property owners to submit written protests
▪ Hold a public hearing a minimum of 45 days after notice is mailed ▪ Rates cannot be adopted if more than 50% of ratepayers submit written protests 3 Current Financial Standing
4 ▪ Current fund balance of about ($95,400)
▪ Absent a rate increase in FY2026/27, revenues of about $286,900 would NOT cover operating expenses of about $361,100 resulting in net negative revenues of about ($74,200).

Capital Improvement Plan
5 Project Priority
Budget
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Treatment Plant Upgrade High $200,000
Security Fence & Cameras High $60,000
Storage & Equipment Low $75,000
Pond Dredging & Maintenance High $150,000
Regulatory Upgrades Medium $100,000
Contingency & Inflation High $50,000 $50,000 $50,000 $50,000 $50,000 Total $150,000 $310,000 $150,000 $125,000 $50,000 $50,000 ▪ CIP listed below with City Staff desired timing of projects ▪ These projects may not be covered by the City’s I&I grant or other grants ▪ It is proposed that pond dredging be funded via a loan over 15 years at 3% Rate Option Comparison
6 Option 1a – Lowest
Initial Rate
No rate funded CIP
Negative operations for
first 2 years; positive
operations year 3
($14,400) year 5 ending
fund balance
Option 1a – Lowest
Initial Rate
Option 1b – Covers
Operations
No rate funded CIP No rate funded CIP
Negative operations for
first 2 years; positive
operations year 3
Positive net revenues
year 1; very slow payback
of negative fund balance
($14,400) year 5 ending
fund balance
($62,800) year 5 ending
fund balance
Option 1a – Lowest
Initial Rate
Option 1b – Covers
Operations Option 2 – Middle Rate
No rate funded CIP No rate funded CIP
$285,000 rate funded
CIP; treatment plant +
regulatory projects
funded 100% by grants
Negative operations for
first 2 years; positive
operations year 3
Positive net revenues
year 1; very slow payback
of negative fund balance
Positive net revenues
year 1
($14,400) year 5 ending
fund balance
($62,800) year 5 ending
fund balance
$35,100 year 5 ending
fund balance
Option 1a – Lowest
Initial Rate
Option 1b – Covers
Operations Option 2 – Middle Rate Option 3 – Highest Rate No rate funded CIP No rate funded CIP
$285,000 rate funded
CIP; treatment plant +
regulatory projects
funded 100% by grants
$460,000 rate funded
CIP; treatment plant +
regulatory projects
funded 50% by grants
Negative operations for
first 2 years; positive
operations year 3
Positive net revenues
year 1; very slow payback
of negative fund balance
Positive net revenues
year 1
Positive net revenues
year 1
($14,400) year 5 ending
fund balance
($62,800) year 5 ending
fund balance
$35,100 year 5 ending
fund balance
$57,000 year 5 ending
fund balance
Comparative Rate Schedule
7 PROPOSED MONTHLY RATE
Current FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 OPTION 1a $69.12 $83.83 $96.40 $110.86 $116.40 $122.22
21% 15% 15% 5% 5%
OPTION 1b $69.12 $91.85 $98.74 $103.67 $108.85 $114.29
33% 8% 5% 5% 5%
OPTION 2 $69.12 $91.85 $110.23 $126.77 $139.45 $146.41
33% 20% 15% 10% 5%
OPTION 3 $69.12 $120.29 $126.31 $132.64 $139.27 $146.23 74% 5% 5% 5% 5%
Rate Survey
8 SD – Sanitary District
PUD – Public Utility District
CSD – Community Service District
CWD – County Water District

Proposed Rate Design
9 Proposed Billing Units
Customer Class Billing Unit
EDUs per
Billing Unit
Residential per dwelling 1.00
Auto shop 1,000 sq ft 1.00
Church/meeting hall 1,000 sq ft 0.67
Coffee Shop (no grease trap) 1,000 sq ft 0.56
Medical Office 1,000 sq ft 1.00
Professional Office 1,000 sq ft 0.31
Restaurant 1,000 sq ft 2.19
Retail 1,000 sq ft 0.31
Theater 1,000 sq ft 0.61
Hotel per room 0.56
Elementary School per student 0.06
High School per student 0.08
▪ All customers are proposed to continue to be billed a fixed rate through the tax roll
▪ Sewer flows are unmetered and water usage data is easily available and verifiable
▪ Proposed rate design:
▪ Residential customers will continue to be billed per dwelling unit
▪ Hotels are proposed to be billed per room
▪ Schools are proposed to be billed based on the number of students
▪ It is proposed that most non-residential customers be billed per 1,000 sq ft
▪ Proposed rates are based on industry-typical sewer flows and pollutant loading for different landuses as well as flows and loads observed in Fort Bragg
Rate schedule – Opt1a (low bookend)
10 CURRENT PROPOSED
Customer Class Billing Unit Monthly Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 21% 15% 15% 5% 5%
Residential Dwelling Unit $69.12 Dwelling Unit $83.83 $96.40 $110.86 $116.40 $122.22 Non-residential varies 15% 15% 5% 5%
Auto shop
Current non-residential rates
vary based on land use
1,000 sq ft $83.83 $96.40 $110.86 $116.40 $122.22
Church/meeting hall 1,000 sq ft $56.17 $64.59 $74.28 $77.99 $81.89 Coffee Shop (no grease trap) 1,000 sq ft $46.94 $53.98 $62.08 $65.18 $68.44 Medical Office 1,000 sq ft $83.83 $96.40 $110.86 $116.40 $122.22 Professional Office 1,000 sq ft $25.99 $29.88 $34.37 $36.08 $37.89 Restaurant 1,000 sq ft $183.59 $211.12 $242.78 $254.92 $267.66 Retail 1,000 sq ft $25.99 $29.88 $34.37 $36.08 $37.89
Theater 1,000 sq ft $51.14 $58.80 $67.62 $71.00 $74.55
Hotel per room $46.94 $53.98 $62.08 $65.18 $68.44
Elementary School per student $5.03 $5.78 $6.65 $6.98 $7.33 High School per student $6.71 $7.71 $8.87 $9.31 $9.78
Rate schedule – Opt3 (high bookend)
11 CURRENT PROPOSED
Customer Class Billing Unit Monthly Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 74% 5% 5% 5% 5%
Residential Dwelling Unit $69.12 Dwelling Unit $120.29 $126.31 $132.64 $139.27 $146.23 Non-residential varies 5% 5% 5% 5%
Auto shop
Current non-residential rates
vary based on land use
1,000 sq ft $120.29 $126.31 $132.64 $139.27 $146.23
Church/meeting hall 1,000 sq ft $80.59 $84.63 $88.87 $93.31 $97.97 Coffee Shop (no grease trap) 1,000 sq ft $67.36 $70.73 $74.28 $77.99 $81.89 Medical Office 1,000 sq ft $120.29 $126.31 $132.64 $139.27 $146.23 Professional Office 1,000 sq ft $37.29 $39.16 $41.12 $43.17 $45.33 Restaurant 1,000 sq ft $263.44 $276.62 $290.48 $305.00 $320.24 Retail 1,000 sq ft $37.29 $39.16 $41.12 $43.17 $45.33
Theater 1,000 sq ft $73.38 $77.05 $80.91 $84.95 $89.20
Hotel per room $67.36 $70.73 $74.28 $77.99 $81.89
Elementary School per student $7.22 $7.58 $7.96 $8.36 $8.77 High School per student $9.62 $10.10 $10.61 $11.14 $11.70 Rate Study Schedule
▪ April 21: City Council meeting to review rate results, choose a rate plan option, and authorize the Prop 218 mailing
▪ May 1: Prop 218 postmark date; LT finalizes the rate study report ▪ Customer Outreach Meeting: May 27
▪ June 16: Prop 218 Hearing (46 days after postmark)
▪ July 1: New rates go into effect
▪ August 10: Tax roll due
▪ Each year, the City Council will review its financial standing and can implement rates up to the legal maximum
12 Wrap Up
13 1

DRAFT TABLES
City of Point Arena
Sewer Rate Study
April 15, 2026
Table 1: July 1, 2025 Fund Balance
Fund Cash Balances
Wastewater Enterprise Fund ($55,000)
Wastewater Rehab ($40,400)
Total Wastewater ($95,400)
Table 2: Operating Expense Projection
Budget Escalation Projected
FY2025/26 Factor FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Wastewater
Salaries & Wages $90,000 4.0% $93,600 $97,300 $101,200 $105,200 $109,400 Payroll Taxes & Benefits $10,000 4.0% $10,400 $10,800 $11,200 $11,600 $12,100 General Administration Costs $38,000 3.0% $39,100 $40,300 $41,500 $42,700 $44,000 Professional Services [1] $32,855 3.0% $33,800 $34,800 $35,800 $36,900 $38,000 Program Supplies & Services $73,000 5.0% $76,700 $80,500 $84,500 $88,700 $93,100 Enterprise Supplies & Services $36,000 3.0% $37,100 $38,200 $39,300 $40,500 $41,700 Subtotal Wastewater $279,855 $290,700 $301,900 $313,500 $325,600 $338,300 Wastewater Rehab
Salaries & Wages $40,000 4.0% $41,600 $43,300 $45,000 $46,800 $48,700 Payroll Taxes & Benefits $4,000 4.0% $4,200 $4,400 $4,600 $4,800 $5,000 General Administration Costs $108 3.0% $100 $100 $100 $100 $100 Professional Services [2] $450,000 3.0% $0 $0 $0 $0 $0
Program Supplies & Services $23,350 5.0% $24,500 $25,700 $27,000 $28,400 $29,800 Subtotal Wastewater Rehab $517,458 $70,400 $73,500 $76,700 $80,100 $83,600 Total Operating Expenses $797,313 $361,100 $375,400 $390,200 $405,700 $421,900 1 - Average of professional services expense from FY2025 and FY2024 actuals 2 - Assumes budgeted professional services are one time expenses, since previous years show $0 2 Table 3: Rate Options
OPTION Description Current
Rate
Proposed Rates
FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31
1A No CIP besides loan funded
pond dredging; deficit of
$30,700 in the first year and
$7,500 the second year.
$69.12 $83.83 $96.40 $110.86 $116.40 $122.22
21% 15% 15% 5% 5%
1B No CIP besides loan funded
pond dredging.
$69.12 $91.85 $98.74 $103.67 $108.85 $114.29
33% 7.5% 5% 5% 5%
2 Loan funded pond dredging.

Equipment, lighting, and
fencing ($135,000) funded from
rates. $150,000 infrastructure
contingency funded from rates.
$69.12 $91.85 $110.23 $126.77 $139.45 $146.41
33% 20% 15% 10% 5%
3 Loan funded pond dredging.

Equipment, lighting, and
fencing ($135,000) funded from
rates. 50% of treatment and
regulatory upgrades ($150,000)
funded from rates and 50%
grants. $175,000 of
infrastructure contingency
funded from rates.
$69.12 $120.29 $126.31 $132.64 $139.27 $146.23
74% 5% 5% 5% 5%
All options assume that pond dredging will be funded via a loan for $150,000 over 15 years at 3% interest resulting in annual debt service of $12,600
Table 4: Capital Improvements for each Option
OPTION 1A/1B – no rate funded capital projects; all projects funded from grants OPTION 2
Project
Projected
FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31
Backhoe & Chlorine Injector $75,000
Fence & Lighting $60,000
Contingency & Inflation $25,000 $25,000 $50,000 $50,000 Total $0 $25,000 $85,000 $125,000 $50,000
3 OPTION 3
Project
Projected
FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31
Backhoe & Chlorine Injector $75,000
Fence & Lighting $60,000
Treatment Plant Upgrade (50% Grant) $100,000
Regulatory Upgrades (50% Grant) $50,000
Contingency & Inflation $25,000 $50,000 $50,000 $50,000 Total $100,000 $75,000 $110,000 $125,000 $50,000
Table 5: Option 1A Cash Flow
Budget Projected: Years 1 - 5 (Prop 218 Period)
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Revenue Increase % 15% 15% 15% 5% 5%
BEGINNING FUND BALANCE ($95,400) ($94,400) ($125,600) ($134,200) ($100,700) ($60,900)

REVENUES
I&I Grant $511,500
Sewer Service Fees 286,900 329,900 379,400 436,300 458,100 481,000 Subtotal Revenues 798,400 329,900 379,400 436,300 458,100 481,000

REVENUES
I&I Grant $511,500
Sewer Service Fees 286,900 361,500 388,600 408,000 428,400 449,800 Subtotal Revenues 798,400 361,500 388,600 408,000 428,400 449,800

REVENUES
I&I Grant $511,500
Sewer Service Fees 286,900 361,500 433,800 498,900 548,800 576,200 Subtotal Revenues 798,400 361,500 433,800 498,900 548,800 576,200

REVENUES
I&I Grant $511,500
Sewer Service Fees 286,900 473,400 497,100 522,000 548,100 575,500 Subtotal Revenues 798,400 473,400 497,100 522,000 548,100 575,500

EXPENSES
Operating Expenses
Wastewater Fund 279,900 290,700 301,900 313,500 325,600 338,300 Wastewater Rehab Fund 517,500 70,400 73,500 76,700 80,100 83,600 Subtotal Operating 797,400 361,100 375,400 390,200 405,700 421,900 Net Operating Revenues 1,000 112,300 121,700 131,800 142,400 153,600 Non-Operating Expenses
CIP Projects (Rate Funded) 0 100,000 75,000 110,000 125,000 50,000 New Debt Service [1] 0 0 12,600 12,600 12,600 12,600
Subtotal Non-Operating 0 100,000 87,600 122,600 137,600 62,600 Total Expenses 797,400 461,100 463,000 512,800 543,300 484,500 Total Net Revenues 1,000 12,300 34,100 9,200 4,800 91,000 ENDING FUND BALANCE ($94,400) ($82,100) ($48,000) ($38,800) ($34,000) $57,000 Target Reserve Balance [2] 320,800 331,600 342,700 354,300 366,400 Target Met? no no no no no
Debt Service Coverage [3] 9.66 10.46 11.30 12.19
1 - $150,000 pond dredging over 15 years at 3%
2 - 9 months of operating expenses plus $50,000 for an emergency repair 3 - Net operating revenues divided by total debt service. Annual target is > 1.2 7 Table 9: Cost Allocation
Expenses
FY2025/26
Budget Flow BOD TSS
Operating Expenses
Wastewater
Salaries & Wages $90,000 60% 20% 20%
Payroll Taxes & Benefits $10,000 60% 20% 20%
General Administration Costs $38,000 60% 20% 20%
Professional Services $32,855 60% 20% 20%
Program Supplies & Services $73,000 60% 20% 20%
Enterprise Supplies & Services $36,000 20% 40% 40%
Subtotal Wastewater $279,855 $153,513 $63,171 $63,171
Wastewater Rehab
Salaries & Wages $40,000 60% 20% 20%
Payroll Taxes & Benefits $4,000 60% 20% 20%
General Administration Costs $108 60% 20% 20%
Professional Services $450,000 60% 20% 20%
Program Supplies & Services $23,350 60% 20% 20%
Subtotal Wastewater Rehab $517,458 $310,475 $103,492 $103,492 Total Expenses for Cost
Allocation $797,313 $463,988 $166,663 $166,663
Total Cost Allocation 58% 21% 21%
BOD – biological oxygen demand
TSS – total suspended solids
8 Table 10: Flows and EDU Assignment
Allocation 58% 21% 21%
Cust. Class Billing Unit
Billing
Unit
Count
Gallons
per day Total Flow
BOD
(mg/l)
TSS
(mg/l)
EDUs per
billing unit
Total
EDUs
Residential Dwelling Units 187 90 16,830 200 200 1.00 187.00 Non-residential
Auto shop 1,000 sq ft 11.66 90 1,049 200 200 1.00 11.66 Church/meeting hall 1,000 sq ft 13.20 60 792 200 200 0.67 8.84 Coffee Shop (no grease trap) 1,000 sq ft 0.52 50 26 200 200 0.56 0.29 Medical Office 1,000 sq ft 5.23 90 471 200 200 1.00 5.23 Professional Office 1,000 sq ft 30.28 35 1,060 100 100 0.31 9.39 Restaurant 1,000 sq ft 26.21 150 3,931 350 350 2.19 57.39 Retail 1,000 sq ft 12.11 35 424 100 100 0.31 3.75
Theater 1,000 sq ft 6.52 50 326 250 250 0.61 3.97
Hotel per room 38 50 1,900 200 200 0.56 21.28
School
Arena Elementary per student 239 5 1,195 200 200 0.06 14.34 High Schools per student 139 7 973 200 200 0.08 11.12
Pacific Community (K-8) per student 64 5 320 200 200 0.06 3.84 29,296 338.11
Less 3% contingency 327.96
Commented [MH1]: With kitchen or no?
Commented [MH2]: What about counter service only ,
no seating or public bathroom?
9 Table 11: Rate Comparison
OPTION 1A
Current
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Increase % in Rate Revenue 15% 15% 15% 5% 5%
Rate Revenue Requirement $286,900 $329,900 $379,400 $436,300 $458,100 $481,000 EDUs 345.85 327.96 327.96 327.96 327.96 327.96
Monthly Rate ($/EDU) $69.12 $83.83 $96.40 $110.86 $116.40 $122.22 % Rate Increase 21% 15% 15% 5% 5%
OPTION 1B
Current
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Increase % in Rate Revenue 26% 7.5% 5% 5% 5%
Rate Revenue Requirement $286,900 $361,500 $388,600 $408,000 $428,400 $449,800 EDUs 345.85 327.96 327.96 327.96 327.96 327.96
Monthly Rate ($/EDU) $69.12 $91.85 $98.74 $103.67 $108.85 $114.29 % Rate Increase 33% 7.5% 5% 5% 5%
OPTION 2
Current
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Increase % in Rate Revenue 26% 20% 15% 10% 5%
Rate Revenue Requirement $286,900 $361,500 $433,800 $498,900 $548,800 $576,200 EDUs 345.85 327.96 327.96 327.96 327.96 327.96
Monthly Rate ($/EDU) $69.12 $91.85 $110.23 $126.77 $139.45 $146.41 % Rate Increase 33% 20% 15% 10% 5%
OPTION 3
Current
FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Increase % in Rate Revenue 65% 5% 5% 5% 5%
Rate Revenue Requirement $286,900 $473,400 $497,100 $522,000 $548,100 $575,500 EDUs 345.85 327.96 327.96 327.96 327.96 327.96
Monthly Rate ($/EDU) $69.12 $120.29 $126.31 $132.64 $139.27 $146.23 % Rate Increase 74% 5% 5% 5% 5%
10 Please see next page
11 Table 12: Monthly Rate Schedules
OPTION 1A

CURRENT PROPOSED
Customer Class Billing Unit Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 Residential Dwelling Unit $69.12 Dwelling Unit $83.83 $96.40 $110.86 $116.40 $122.22 Non-residential
Auto shop
Current non-residential
rates vary based on land use
1,000 sq ft $83.83 $96.40 $110.86 $116.40 $122.22
Church/meeting hall 1,000 sq ft $56.17 $64.59 $74.28 $77.99 $81.89 Coffee Shop (no grease trap) 1,000 sq ft $46.94 $53.98 $62.08 $65.18 $68.44 Medical /dental Office 1,000 sq ft $83.83 $96.40 $110.86 $116.40 $122.22 Professional Office 1,000 sq ft $25.99 $29.88 $34.37 $36.08 $37.89 Restaurant 1,000 sq ft $183.59 $211.12 $242.78 $254.92 $267.66 Retail 1,000 sq ft $25.99 $29.88 $34.37 $36.08 $37.89
Theater 1,000 sq ft $51.14 $58.80 $67.62 $71.00 $74.55
Hotel per room $46.94 $53.98 $62.08 $65.18 $68.44
Elementary School per student $5.03 $5.78 $6.65 $6.98 $7.33 High School per student $6.71 $7.71 $8.87 $9.31 $9.78
OPTION 1B

CURRENT PROPOSED
Customer Class Billing Unit Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 Residential Dwelling Unit $69.12 Dwelling Unit $91.85 $98.74 $103.67 $108.85 $114.29 Non-residential
Auto shop
Current non-residential
rates vary based on land use
1,000 sq ft $91.85 $98.74 $103.67 $108.85 $114.29
Church/meeting hall 1,000 sq ft $61.54 $66.16 $69.46 $72.93 $76.57 Coffee Shop (no grease trap) 1,000 sq ft $51.44 $55.29 $58.06 $60.96 $64.00 Medical /dental Office 1,000 sq ft $91.85 $98.74 $103.67 $108.85 $114.29 Professional Office 1,000 sq ft $28.47 $30.61 $32.14 $33.74 $35.43 Restaurant 1,000 sq ft $201.15 $216.24 $227.04 $238.38 $250.30 Retail 1,000 sq ft $28.47 $30.61 $32.14 $33.74 $35.43
Theater 1,000 sq ft $56.03 $60.23 $63.24 $66.40 $69.72
Hotel per room $51.44 $55.29 $58.06 $60.96 $64.00
Elementary School per student $5.51 $5.92 $6.22 $6.53 $6.86 High School per student $7.35 $7.90 $8.29 $8.71 $9.14
12 OPTION 2

CURRENT PROPOSED
Customer Class Billing Unit Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 Residential Dwelling Unit $69.12 Dwelling Unit $91.85 $110.23 $126.77 $139.45 $146.41 Non-residential
Auto shop
Current non-residential
rates vary based on land use
1,000 sq ft $91.85 $110.23 $126.77 $139.45 $146.41
Church/meeting hall 1,000 sq ft $61.54 $73.85 $84.94 $93.43 $98.09 Coffee Shop (no grease trap) 1,000 sq ft $51.44 $61.73 $70.99 $78.09 $81.99 Medical /dental Office 1,000 sq ft $91.85 $110.23 $126.77 $139.45 $146.41 Professional Office 1,000 sq ft $28.47 $34.17 $39.30 $43.23 $45.39 Restaurant 1,000 sq ft $201.15 $241.40 $277.63 $305.40 $320.64 Retail 1,000 sq ft $28.47 $34.17 $39.30 $43.23 $45.39
Theater 1,000 sq ft $56.03 $67.24 $77.33 $85.06 $89.31
Hotel per room $51.44 $61.73 $70.99 $78.09 $81.99
Elementary School per student $5.51 $6.61 $7.61 $8.37 $8.78 High School per student $7.35 $8.82 $10.14 $11.16 $11.71 OPTION 3

CURRENT PROPOSED
Customer Class Billing Unit Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 Residential Dwelling Unit $69.12 Dwelling Unit $120.29 $126.31 $132.64 $139.27 $146.23 Non-residential
Auto shop
Current non-residential
rates vary based on land use
1,000 sq ft $120.29 $126.31 $132.64 $139.27 $146.23
Church/meeting hall 1,000 sq ft $80.59 $84.63 $88.87 $93.31 $97.97 Coffee Shop (no grease trap) 1,000 sq ft $67.36 $70.73 $74.28 $77.99 $81.89 Medical /dental Office 1,000 sq ft $120.29 $126.31 $132.64 $139.27 $146.23 Professional Office 1,000 sq ft $37.29 $39.16 $41.12 $43.17 $45.33 Restaurant 1,000 sq ft $263.44 $276.62 $290.48 $305.00 $320.24 Retail 1,000 sq ft $37.29 $39.16 $41.12 $43.17 $45.33
Theater 1,000 sq ft $73.38 $77.05 $80.91 $84.95 $89.20
Hotel per room $67.36 $70.73 $74.28 $77.99 $81.89
Elementary School per student $7.22 $7.58 $7.96 $8.36 $8.77 High School per student $9.62 $10.10 $10.61 $11.14 $11.70 1 City of Point Arena
PO Box 67 Point Arena, CA 95468
(707) 882-2122
Name
Address
City, State ZIP

NOTICE OF PUBLIC HEARING REGARDING PROPOSED
ADJUSTMENTS TO WASTEWATER RATES UNDER PROPOSITION 218
June 16, 2026 at 6:00pm
at 451 School Street, Point Arena, CA 95468

CUSTOMER OUTREACH MEETING TO DISCUSS THE PROPOSED RATE ADJUSTMENT May 27, 2026 at 5:30pm
at 451 School Street, Point Arena, CA 95468
You are receiving this notice as a property owner receiving sewer (wastewater) service from the City of Point Arena (City). The City Council will hold a public hearing on June 16, 2026 to hear public input and to consider and potentially approve sewer rate changes for the next five years.

Background
The City of Point Arena provides sewer service to about 155 active connections including single family residences, duplexes, mobile homes, businesses, and other non-residential land use types. The City’s Sewer Fund is self-supported from rate revenues and does not receive tax revenues. All customers are billed annually through the Mendocino County tax roll. The City last increased sewer rates in 2021. Point Arena is pursuing cost savings for residents wherever possible and has secured a grant of $841,000 to conduct sewer pipeline improvements. As part of the funding package, the City is required to complete a rate review to show that it can fund operations and maintenance costs that are not covered by the grant.

Why is an increase needed?
The City has not raised sewer rates in five years and is not able to fully fund the cost of service resulting in a deficit. To continue to provide service, the Sewer Fund has borrowed about 2 $95,000 from other City funds that it is required to pay back. Rate increases are needed to reverse the deficit to fully fund operating costs, pay back the amount borrowed, and to fund infrastructure improvements that are not covered by grants such as treatment upgrades and pond dredging.

Proposed Rates
Table 1 on page 3 identifies the current and proposed wastewater rates over the next five years.

Rates are calculated so that each customer pays charges that are proportional to his or her estimated flows and pollutants discharged into the sewer system. If adopted, the first adjustment for residential customers will consist of an increase from $69.12 (current) to $91.85 per month beginning July 1, 2026, an increase of $22.73 per month.

The rates for other customer groups are also proposed to increase. It is proposed that the City bill most non-residential customers based on the square footage of their building size using County tax records. Businesses such as restaurants have higher sewer flows on a square foot basis when compared to low flow businesses such as offices or retail shops. Hotels are proposed to be billed based on the number of hotel rooms and schools are proposed to be billed based on the number of students.

How to Participate
The proposed rate increases are governed by section 6 of Article XIII D of the California Constitution (Proposition 218), Government Code sections 53751 et seq. and 53759 et seq., and related laws. More information and the Sewer Rate Study Report are on the City’s website at https://pointarena.ca.gov/ or you can call (707) 882-2122. A Community Outreach meeting will be held to discuss the proposed rates on May 27 at 5:30pm at 451 School Street, Point Arena, CA 95468 to hear public input and answer questions. The City Council will hold a public hearing on June 16, 2026, to receive public comment, including any written protests to the proposed rates, and potentially adopt rate increases. Page 4 provides information regarding how to submit a written protest.

Please see pages 3 and 4.
3 Table 1: Current and Proposed Monthly Sewer Rates

CURRENT PROPOSED
Customer Class Billing Unit Rate Billing Unit 1-Jul-26 1-Jul-27 1-Jul-28 1-Jul-29 1-Jul-30 Residential Dwelling
Unit
$69.12 Dwelling
Unit
$91.85 $110.23 $126.77 $139.45 $146.41
Non-residential
Auto shop
Current nonresidential rates vary
based on land use
1,000 sq ft $91.85 $110.23 $126.77 $139.45 $146.41
Church/meeting hall 1,000 sq ft $61.54 $73.85 $84.94 $93.43 $98.09 Coffee Shop (no grease trap) 1,000 sq ft $51.44 $61.73 $70.99 $78.09 $81.99 Medical /dental Office 1,000 sq ft $91.85 $110.23 $126.77 $139.45 $146.41 Professional Office, Fire Station 1,000 sq ft $28.47 $34.17 $39.30 $43.23 $45.39 Restaurant 1,000 sq ft $201.15 $241.40 $277.63 $305.40 $320.64 Retail 1,000 sq ft $28.47 $34.17 $39.30 $43.23 $45.39
Theater 1,000 sq ft $56.03 $67.24 $77.33 $85.06 $89.31
Hotel per room $51.44 $61.73 $70.99 $78.09 $81.99
Elementary School per student $5.51 $6.61 $7.61 $8.37 $8.78 High School per student $7.35 $8.82 $10.14 $11.16 $11.71 If you would like to confirm your property’s customer class or sewer charges with the City’s records, please call (707) 882-2122.

Rates will continue to be collected annually on the property tax bill.

Please see the next page.
4 How do I file a protest?
Proposition 218 provides that “Property Related Fees” such as these proposed rates are subject to a “majority protest” process. Any property owner may submit a written protest of proposed rates; provided, however, that only one protest will be counted per property. If protests are filed on behalf of a majority of the properties subject to the rates, the City cannot adopt the proposed rates.

Every written protest MUST include ALL of the following to be counted:

1. A statement that it is a protest against the proposed wastewater rates;

2. Name of the property owner who is submitting the protest;

3. Identification of the assessor’s parcel number or street address (service address) of the property for which the protest is made; and

4. An original signature of the property owner who is submitting the protest.

Written protests may be submitted by:

1. Mail to: Prop 218 Protest, 451 School Street, Point Arena, CA 95468; or

2. In-person delivery during normal business hours to the same address; or

3. In-person at the public hearing, before the end of the public hearing.

Regardless of how the written protest is submitted, it must be received by the Clerk before the end of the public hearing to be held on June 16, 2026, beginning at 6:00 p.m. at 451 School Street, Point Arena, CA 95468. (Postmark dates will not be accepted.) To ensure protests are genuine, they will not be accepted by e‐mail or other electronic means. Please identify on the front of the envelope for any written protest, whether mailed or submitted in person to the City, that the enclosed protest is for the public hearing on the Proposed Wastewater Rate Increases. Oral comments at the public hearing will not qualify as formal protests unless accompanied by a written protest, but the City Council welcomes that input.

At the end of the public hearing, protests will be counted in public view. If protests are not submitted as to a majority of the properties subject to the fees, the City Council may adopt the proposed rates. The first rate change, if approved, will take effect on or after July 1st, 2026.

Pursuant to California Government Code 53759, a 120-day statute of limitations applies to any legal challenge to a new, increased, or extended fee.

Point Arena City CouncilApril 21, 2026

Point Arena City Council
April 21, 2026