Water and Sewer Rate Study
City of Red Bluff
August 4, 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% +1 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
3/4" $15.04
1" $25.78
1.5" $48.33
2" $60.24
3" $82.69
4" $205.81
6" $454.39
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)
1 - 2,500 $0.79
2,501 - 4,000 $0.74
4,001 - 6,000 $0.69
6,001 - 8,000 $0.66
8,001 - 12,000 $0.62
12,001 - 20,000 $0.61
20,001 - 36,000 $0.55
36,001 - 68,000 $0.54
68,000+ $0.48
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)
Category Rate Count Total
Base Fee (3/4”) $15.04 x 1 $15.04
Consumption Rate ($/HCF) $0.79 x 16 $12.64
Total Monthly Bill $27.68
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
Proposed Monthly Water Rates
13 PROPOSED
CURRENT
Fiscal Year FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 Effective Date Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031
METER FEE
Meter Size
3/4” $15.04 $14.89 $22.17 $26.39 $30.13 $34.40
1” $25.78 $23.60 $35.15 $41.85 $47.78 $54.56
1.5” $48.33 $45.39 $67.60 $80.50 $91.92 $104.96
2” $60.24 $71.53 $106.54 $126.88 $144.88 $165.44
3” $82.69 $141.23 $210.38 $250.56 $286.10 $326.72
4" $205.81 $219.65 $327.20 $389.70 $444.98 $508.16
6” $454.39 $437.49 $651.70 $776.20 $886.32 $1,012.16
VOLUME RATE ALL USE ($/HCF)
All Use ($/HCF) Varies by tier $1.67 $2.48 $2.95 $3.36 $3.83 HCF = hundred cubic feet; 1 HCF = 748 gallons
Water Bill Survey
14 HCF = hundred cubic feet; 1 HCF = 748 gallons
Avg Water Bill Compared w/Inflation
15 SEWER ENTERPRISE
Current Monthly Sewer Rates
17 Residential Class Fixed Monthly Rate
Single Family $34.00
Multi-Family (Condo or Townhouse) $34.00
Mobile Homes, per unit $24.00
Apartment, per unit $24.00
Use rate over
minimum
Amount Included in
Commercial Class Minimum (HCF)
$/HCF
Minimum Fee $34.00
Bakery 4 $3.63
Restaurant 5 $2.99
All Others 11 $2.69
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
18 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
19 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
20 Recent capital spending has consisted of emergency repairs. Goal is to proactively improve sewer system before emergencies occur.
Draft CIP recommends $16M of projects over five years Similar to the Water Fund, focus is funding high-priority projects identified in the 2025 Sewer Master Plan and conducting pipeline replacements concurrent with planned road work
Unlike the Water Fund, the Waste Water Fund does not have existing reserves to allow for the rates to be phased in
Critical improvements include:
Second clarifier at WWTP – City cannot apply for an SRF loan without a rate increase Improve operational efficiency during wet weather conditions Proposed Monthly Sewer Rates
21 PROPOSED
CURRENT
Effective Date Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 Jan 1, 2030 Jan 1, 2031 Residential Customers Monthly Rate Residential Fixed Monthly Rates ($/dwelling unit) Single Family Residential $34.00 Single Family $85.87 $91.94 $98.24 $102.10 $106.31 Multi-Family (Condo or Townhouse) $34.00 Multi-Family $62.69 $67.12 $71.72 $74.54 $77.61 Multi-Family (Apartment), per unit $24.00
Mobile Homes, per unit $24.00
Commercial Minimum Fee Non-residential Minimum Fee ($/unit; includes 7 HCF of usage) Bakery (includes 4 HCF) $34.00 High Strength $112.05 $119.94 $128.48 $133.32 $138.79 Restaurant (includes 5 HCF) $34.00 Medium Strength $85.87 $91.94 $98.24 $102.10 $106.31 All Others (includes 11 HCF) $34.00 Low Strength $80.13 $85.78 $91.80 $95.38 $99.17 Commercial Flow Rates ($/HCF above minimum) Non-residential Flow Rates ($/HCF for use above 7 HCF) Bakery $3.63 High Strength $15.33 $16.41 $17.58 $18.24 $18.99 Restaurant $2.99 Medium Strength $11.59 $12.41 $13.26 $13.78 $14.35 All Others $2.69 Low Strength $10.77 $11.53 $12.34 $12.82 $13.33 Sewer Survey
22 Sewer Bill Compared w/ Inflation
23 24
Water & Sewer Survey
Combined Bill Compared w/ Inflation
25 Schedule and Wrap Up
26 August 4 - Present 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