Water and Sewer Rate Study
City of Red Bluff
July 21, 2026
Background
The City of Red Bluff provides water and wastewater (sewer) service to about 4,600 active service connections
The goal of the rate study is to fund the full cost of providing service Cost of service includes operating & maintenance costs, capital improvement projects, maintaining reserve funds for emergencies
Rate structure adjustments are proposed to more fairly recover costs proportional to usage of the systems
This rate study proposes new 5-year plan with rates going into effect each January 1 from 2027 to 2031
2 Background Continued
Water and sewer rates have not increased for 14 years Last rate increase – July 15, 2012
Both funds are operating in a deficit (revenues are less than expenses) Without rate increases, water reserves will be depleted by 2029/30 (w/ no CIP funding)
Sewer reserves are fully depleted – Estimated July 1, 2026 balance is negative $2,826,200
Utility funds are Enterprise Funds
Separate from General Fund
Similar to a private business; should be self-supported from rates and charges 3 Legal Requirements: Proposition 218
4 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:
Conduct a rate study
Mail a notice of public hearing and conduct hearing at least 45 days later Ratepayers can block the increase with a 50% protest
Rate Study Process
5 1. FINANCIAL
PLAN
Long-term cash
flow analysis to
evaluate cost
of service
needs
2. RATE
DESIGN
Review water
and sewer rate
structures to
ensure
compliance
with
Proposition 218
3. PUBLIC
OUTREACH
Engage
ratepayers
through public
outreach
process
Key Considerations
6 1. Financial Plan
Reverse deficit for both the Water and Sewer Enterprises Finance Capital Improvement Plan (developed in Master Plan process)
2. Rate Design
Comply with all Proposition 218 requirements
Replace tiered water rates with a uniform rate for all use Revise non-residential sewer rate customer categories
3. Public Outreach
Rates must be adopted before January 1, 2027
WATER ENTERPRISE
Current Base Meter Rates
8 Fee Description Monthly Charge [1]
BASE RATE (fixed)
Meter Size
$15.04 3/4"
1" $25.78
1.5" $48.33
$60.24 2"
3" $82.69
4" $205.81
$454.39 6"
1 – Customers outside the City limits are billed 2x the rates shown here * Meter fee rate structure is not proposed to be adjusted. Larger meters are billed higher rates in proportion to the capacity of each meter in the system.
Current Consumption Rates
9 Fee Description Charge per 100 cubic feet [1]
CONSUMPTION RATE
Volume (Cubic Feet)
$0.791 - 2,500
$0.742,501 - 4,000
$0.694,001 - 6,000
$0.666,001 - 8,000
$0.628,001 - 12,000
$0.6112,001 - 20,000
$0.5520,001 - 36,000
$0.5436,001 - 68,000
$0.4868,000+
1 – Customers outside the City limits are billed 2x the rates shown here 2 – 100 cubic feet = 1 HCF = 748 gallons
Tiers are
proposed to be
replaced with a
uniform rate for
all water use.
Current Average Residential Water Bill
10 Based on average monthly water use of 16 HCF; 1 HCF = 748 gallons Average Monthly Bill, 3/4” Meter (16 HCF)
TotalCountRateCategory
$15.041x$15.04Base Fee (3/4”)
Consumption Rate ($/HCF) 16x$0.79 $12.64
$27.68Total Monthly Bill
Water Financial Standing
11 July 1, 2026:
Remaining
cash reserves
of $5.6M
The fund has
been operating
in a deficit for
the past five
years.
Water Infrastructure Needs
12 Capital Improvement Plan (CIP) for the next 5 years totals $18.9M Short-term focus is funding high-priority projects identified in the August 2025 Water Master Plan
Another priority is completing pipeline replacements in conjunction with roadway improvements funded via Street Smart Initiative Critical improvements include:
Well improvements – mitigate PFAS at Well 6, emergency chlorination of well sites, standby generators at Wells 10 & 14
Replacing old steel water pipelines and inoperable isolation valves Replace existing SCADA and telemetry system
Water Financial Plan Scenarios
13 Scenario 3
(Phase-in)
Scenario 2
(50% cash / 50% debt)
Scenario 1
(Cash Fund Full CIP)
Variable
$9.2M cash funded
(about half of full CIP)
$8.8M loan + $10.1M
cash
CIP Funding Over 5 yrs $18.9M cash funded
No debt
Annual payments of
$709,000 beginning yr 4 Debt Service No debt
$59 $59$28 $28 $42$28
Initial Avg Bill
Increase
• Positive Operating
revenues yr 2
• Positive net revenues
yr 4
• Positive Operating
revenues yr 1
• Positive net revenues
yr 4
• Positive Operating
revenues yr 1
• Positive net revenues
yr 4
Net Revenues
$2.64M
Current balance: $5.6M
$3.57M
Current balance: $5.6M
$4.96M
Current balance: $5.6M
Estimated ending
fund balance (yr 5)
Water Scenario Bill Comparison
14 Water Bill Survey
15 HCF = hundred cubic feet; 1 HCF = 748 gallons
Avg Water Bill Compared w/Inflation
16 SEWER ENTERPRISE
Current Monthly Sewer Rates
18 Fixed Monthly RateResidential Class
$34.00Single Family
$34.00Multi-Family (Condo or Townhouse)
$24.00Mobile Homes, per unit
$24.00Apartment, per unit
Use rate over
minimum
Amount Included in
Minimum (HCF)Commercial Class
$/HCF
$34.00Minimum Fee
$3.634Bakery
$2.995Restaurant
$2.6911All Others
Multi-family customers
are proposed to be
consolidated into one
class.
Non-residential customers
are proposed to be
reclassified into low,
medium, and high
strength classes, with 7
HCF included in minimum
for all.
Proposed Sewer Customer Classes
19 Residential
Single Family
Multi-family (existing condo, townhouse, mobile home, and apartment customers) Non-residential (based on pollutant strength)
High Strength = bakeries, restaurants, and theaters
Medium Strength = assisted living facilities, auto shops and dealerships, bars, car washes, churches, medical offices, gas stations, grocery stores, laundromats, hotel/motels, schools, veterinarians, RV parks, and mixed use Low Strength = retail, offices, gyms
Sewer Financial Standing
20 July 1, 2026:
Cash balance of
negative $2.8M
(owed to other
City funds)
The fund has
been operating
in a deficit for
over five years.
Sewer Infrastructure Needs
21 Recent capital spending has consisted of emergency repairs. Goal is to proactively improve sewer system before emergencies occur.
Draft CIP recommends $16M of projects over five years Similar to the Water Fund, focus is funding high-priority projects identified in the 2025 Sewer Master Plan and conducting pipeline replacements concurrent with planned road work
Unlike the Water Fund, the Waste Water Fund does not have existing reserves to allow for the rates to be phased in
Critical improvements include:
Second clarifier at WWTP – City cannot apply for an SRF loan without a rate increase Improve operational efficiency during wet weather conditions Sewer Financial Plan Scenarios
22 Scenario 3
(Cash Fund Low CIP)
Scenario 2
(Cash/Debt Medium
CIP)
Scenario 1
(Cash Fund Full CIP) Variable
CIP Funding Over 5 yrs ed $8M cash funded$8M loan + $10.6M cash$16M cash fund Full repayment in
about 10 years
Full repayment in about
10 years
Full repayment in
about 10 years
Repayment of Past
Deficit (negative $2.8M)
No new debt
Annual payments of
$641,900 beginning yr 3 New Debt No new debt
Initial Avg Bill Increase $86 $86$34 $34 $86$34
$3.78M$3.92M$4.15M
Estimated ending fund
balance (yr 5)
Sewer Scenario Bill Comparison
23 Sewer Survey
24 Sewer Bill Compared w/ Inflation
25 26
Water & Sewer Survey
Combined Bill Compared w/ Inflation
27 Tentative Schedule and Wrap Up
28 Receive feedback from City Council and revise calculations as needed Return on August 4 with final recommendations; request authorization to conduct Proposition 218 notification
August 20 - Mail Proposition 218 notices (47 days in advance) September 16 - Public outreach meeting
October 6 - Prop 218 hearing
January 1, 2027 - New rates go into effect
Detailed Rate Plans (for background)
29 Proposed Water Rates – Scenario 1
30 PROPOSED
CURRENT
Year FY2030/31FY2029/30FY2028/29FY2027/28FY2026/27Fiscal ffective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, 2027E
METER FEE
Meter Size
3/4” $40.44 $40.44 $40.44 $33.95 $20.73 $15.04
1” $65.05 $65.05 $65.05 $54.60 $33.34 $25.78
1.5” $126.56 $126.56 $126.56 $106.24 $64.85 $48.33
2” $200.38 $200.38 $200.38 $168.20 $102.67 $60.24
3” $397.24 $397.24 $397.24 $333.42 $203.53 $82.69
4" $618.70 $618.70 $618.70 $519.30 $316.99 $205.81
6” $1,233.86 $1,233.86 $1,233.86 $1,035.64 $632.15 $454.39 ALL USE ($/HCF)VOLUME RATE
All Use ($/HCF) Varies by tier $4.70 $4.70 $4.70 $3.95 $2.42 HCF = hundred cubic feet; 1 HCF = 748 gallons
Proposed Water Rates – Scenario 2
31 PROPOSED
CURRENT
Year FY2030/31FY2029/30FY2028/29FY2027/28FY2026/27Fiscal ffective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, 2027E
METER FEE
Meter Size
3/4” $28.08 $28.08 $28.08 $25.72 $20.73 $15.04
1” $45.17 $45.17 $45.17 $41.37 $33.34 $25.78
1.5” $87.88 $87.88 $87.88 $80.48 $64.85 $48.33
2” $139.14 $139.14 $139.14 $127.42 $102.67 $60.24
3” $275.84 $275.84 $275.84 $252.60 $203.53 $82.69
4" $429.62 $429.62 $429.62 $393.42 $316.99 $205.81
6” $856.78 $856.78 $856.78 $784.58 $632.15 $454.39
ALL USE ($/HCF)VOLUME RATE
All Use ($/HCF) Varies by tier $3.26 $3.26 $3.26 $2.99 $2.42 HCF = hundred cubic feet; 1 HCF = 748 gallons
Proposed Water Rates – Scenario 3
32 PROPOSED
CURRENT
Year FY2030/31FY2029/30FY2028/29FY2027/28FY2026/27Fiscal ffective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, 2027E
METER FEE
Meter Size
3/4” $34.40 $30.13 $26.39 $22.17 $14.89 $15.04
1” $54.56 $47.78 $41.85 $35.15 $23.60 $25.78
1.5” $104.96 $91.92 $80.50 $67.60 $45.39 $48.33
2” $165.44 $144.88 $126.88 $106.54 $71.53 $60.24
3” $326.72 $286.10 $250.56 $210.38 $141.23 $82.69
4" $508.16 $444.98 $389.70 $327.20 $219.65 $205.81
6” $1,012.16 $886.32 $776.20 $651.70 $437.49 $454.39
ALL USE ($/HCF)VOLUME RATE
All Use ($/HCF) Varies by tier $3.83 $3.36 $2.95 $2.48 $1.67 HCF = hundred cubic feet; 1 HCF = 748 gallons
Proposed Sewer Rates – Scenario 1
33 PROPOSED
CURRENT
2027Effective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, nthly RateResidential Customers Residential Fixed Monthly Rates ($/dwelling unit)Mo Single Family Residential y$34.00 $136.62 $131.50 $126.39 $106.25 $85.94 Single Famil Multi-Family (Condo or Townhouse) 00 $99.74 $96.00 $92.27 $77.57 $62.74 Multi-Family$34.
Multi-Family (Apartment), per unit $24.00
Mobile Homes, per unit $24.00
Non-residential Minimum Fee ($/unit; includes 7 HCF of usage)Commercial Minimum Fee Bakery (includes 4 HCF) th$34.00 $174.14 $167.62 $160.97 $135.37 $109.60 High Streng Restaurant (includes 5 HCF) gth$34.00 $136.62 $131.50 $126.39 $106.25 $85.94 Medium Stren Low Strength$34.00All Others (includes 11 HCF) $128.50 $123.66 $118.83 $99.95 $80.90 Non-residential Flow Rates ($/HCF for use above 7 HCF)Commercial Flow Rates ($/HCF above minimum) High Strength$3.63Bakery $23.80 $22.91 $22.00 $18.50 $14.98 Medium Strength$2.99Restaurant $18.44 $17.75 $17.06 $14.34 $11.60 Low Strength$2.69All Others $17.28 $16.63 $15.98 $13.44 $10.88 Proposed Sewer Rates – Scenario 2
34 PROPOSED
CURRENT
2027Effective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, nthly RateResidential Customers Residential Fixed Monthly Rates ($/dwelling unit)Mo Single Family Residential $34.00 $129.87 $121.50 $111.43 $97.94 $85.94 Single Family Multi-Family (Condo or Townhouse) 00 $94.81 $88.70 $81.35 $71.50 $62.74 Multi-Family$34.
Multi-Family (Apartment), per unit $24.00
Mobile Homes, per unit $24.00
Non-residential Minimum Fee ($/unit; includes 7 HCF of usage)Commercial Minimum Fee Bakery (includes 4 HCF) th$34.00 $167.11 $156.36 $143.49 $125.94 $110.58 High Streng Restaurant (includes 5 HCF) th$34.00 $129.87 $121.50 $111.43 $97.94 $85.94 Medium Streng Low Strength$34.00All Others (includes 11 HCF) $121.89 $113.94 $104.57 $91.78 $80.62 Non-residential Flow Rates ($/HCF for use above 7 HCF)Commercial Flow Rates ($/HCF above minimum) High Strength$3.63Bakery $22.85 $21.38 $19.62 $17.22 $15.12 Medium Strength$2.99Restaurant $17.53 $16.40 $15.04 $13.22 $11.60 Low Strength$2.69All Others $16.39 $15.32 $14.06 $12.34 $10.84 Proposed Sewer Rates – Scenario 3
35 PROPOSED
CURRENT
2027Effective Date Jan 1, 2031Jan 1, 2030Jan 1, 2029Jan 1, 2028Jan 1, nthly RateResidential Customers Residential Fixed Monthly Rates ($/dwelling unit)Mo Single Family Residential 34.00 $106.31 $102.10 $98.24 $91.94 $85.87 Single Family$ Multi-Family (Condo or Townhouse) 00 $77.61 $74.54 $71.72 $67.12 $62.69 Multi-Family$34.
Multi-Family (Apartment), per unit $24.00
Mobile Homes, per unit $24.00
Non-residential Minimum Fee ($/unit; includes 7 HCF of usage)Commercial Minimum Fee Bakery (includes 4 HCF) th$34.00 $138.79 $133.32 $128.48 $119.94 $112.05 High Streng Restaurant (includes 5 HCF) h$34.00 $106.31 $102.10 $98.24 $91.94 $85.87 Medium Strengt Low Strength$34.00All Others (includes 11 HCF) $99.17 $95.38 $91.80 $85.78 $80.13 Non-residential Flow Rates ($/HCF for use above 7 HCF)Commercial Flow Rates ($/HCF above minimum) High Strength$3.63Bakery $18.99 $18.24 $17.58 $16.41 $15.33 Medium Strength$2.99Restaurant $14.35 $13.78 $13.26 $12.41 $11.59 Low Strength$2.69All Others $13.33 $12.82 $12.34 $11.53 $10.77