ORDINANCE NO. 1799
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN CLEMENTE, CALIFORNIA, AMENDING SECTION 13.04.220 OF THE CITY OF SAN CLEMENTE MUNICIPAL CODE RELATING TO WATER RATES WHEREAS, the City owns and operates approximately 230 miles of water lines, 15 reservoirs, 16 pump station and 56 pressure reducing stations; and WHEREAS, the City receives imported water from Metropolitan Water District from Northern California and the Colorado River Basin through its wholesaler Municipal Water District of Orange County (MWDOC); and WHEREAS, the City has local water resources from two wells and produces recycled water at the Water Reclamation Plant for irrigation purposes; and WHEREAS, the City provides water service meeting state and federal standards to approximately 17,600 service meters consisting of residential, multifamily, irrigation and commercial accounts; and WHEREAS, the City exercises its constitutional authority to establish, operate, and regulate a water service system, pursuant to California Constitution Article XI, section 7, and establish rates for providing those services to property owners and customers in accordance with San Clemente Municipal Code Chapter 13.04, subject to the requirements and limitations of California Constitution Article XIII D, Section 6 (a.k.a., “Proposition 218”); and WHEREAS, pursuant to the requirements of Proposition 218, prior to extending, imposing or increasing water rates (for a property-related service), the City must provide property owners notice at least 45 days before a public hearing regarding modifications to the water rates; and WHEREAS, in order to evaluate the costs of providing service to City customers and maintain operation of the water system, the City Council hired Water Resources Economics, LLC on May 6, 2025 to conduct a cost-of-service study to evaluate the City’s costs of providing water services in comparison to water rate and other revenues; and WHEREAS, Water Resources Economics, LLC reviewed the City’s water finances, presented preliminary recommendations and received direction from the City Council on September 16, 2025; and WHEREAS, on October 7, 2025, the City Council adopted water rate setting procedures under Proposition 218 and Government Code sections 53750 through 53759.2 and 54354.5 to establish a process for property owner objections to proposed water fees; and WHEREAS, Water Resources Economics, LLC completed a cost-of-service study, as documented in the November 2025 Water Rate Study Final Report (“Water Rate Study”) that recommended changes in the rate structure, five-year rate adjustments, fixed and pass through of charges from the Municipal Water District of Orange County, and establishment of recycled water rates and demand manager rates in the event there is a required reduction in water use; and WHEREAS, on November 18, 2025, based on the Water Rate Study, the City Council directed staff to mail a Proposition 218 public hearing notice to all property owners served by City water, and that notice established a deadline to receive written objections by January 15, 2026 at 5:00 p.m., set a Public Hearing for February 3, 2026, at 5:30 p.m. to consider all timely written objections, and set a Public Hearing for February 17, 2026, at 5:30 p.m. to conduct a protest hearing under Proposition 218 and to consider proposed adjustments to and adoption of water rates and service charges; and WHEREAS, those Proposition 218 public hearing notices were mailed to all property owners receiving City water services (including tenants who are directly liable to pay water rates) on December 1, 2025, a minimum of 45 days prior to the requirement for objections to be received by the City on January 15, 2026 at 5:00 p.m.; and WHEREAS, the City Council conducted a duly noticed objection hearing on February 3, 2026, to consider all written communications related to the proposed update to water rates that were received by the City prior to the January 15 deadline, as well as the responses to those communications prepared by City staff, and the Council determined no such written communications met the definition of a written objection, and determined no clarifications, further review or reduction or abandonment of the proposed water rates, fees and charges was warranted in accordance with Government Code sections 53759.1 and 53759.2; and WHEREAS, the City Council conducted a duly noticed public protest hearing on February 17, 2026, to consider all written protests and hear all oral comments, determine whether or not a majority protest was made and set rates in accordance with the Proposition 218 Notice; and WHEREAS, San Clemente Municipal Code section 13.04.220 sets forth an old water schedule and requires amendment to prevent customer confusion and accurately reflect the City’s process for rate setting.
NOW, THEREFORE, the City Council of the City of San Clemente does hereby ordain as follows:
SECTION 1. The aforementioned recitals are true and correct and incorporated fully herein.
SECTION 2. Section 13.04.220, including subsections A through E, of the San Clemente Municipal Code is hereby deleted in its entirety and replaced with the following:
13.04.220 – Establishment of water rate schedule
Water Rates Adopted by Resolution. The City Council shall adopt water rates by resolution. Water rates may include both fixed and variable consumption components in order to allow the City to recover its costs for the provision of service. Each property owner (or the property owner’s tenant) to whom the City has issued a water meter shall pay the water rates in accordance with such resolution adopting rates and this Chapter 13.04.
Demand Management Rate. The water rates adopted by the City Council by resolution may include a demand management rate. At any time that the City Council adopts a resolution declaring a water shortage emergency in accordance with the City’s Urban Water Management Plan, customers shall pay the supplemental demand management rate corresponding to the level of emergency declared by City Council for as long as the water shortage emergency remains in effect.
SECTION 3. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this Ordinance, or any part thereof, is for any reason held to be invalid, such decision shall not offset the validity of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases are declared invalid.
SECTION 4. This Ordinance shall take effect thirty (30) days from the date of its passage. Before the expiration of fifteen (15) days after its passage, this Ordinance shall be published in a newspaper of general circulation, printed and published in the City of San Clemente.
APPROVED AND ADOPTED this _____ day of February, 2026.
ATTEST:
___________________________ __________________________
City Clerk of the City of Rick Loeffler, Mayor of the
San Clemente, California City of San Clemente, California STATE OF CALIFORNIA )
COUNTY OF ORANGE ) §
CITY OF SAN CLEMENTE )
I, LAURA CAMPAGNOLO, City Clerk of the City of San Clemente, California, do hereby certify that Ordinance No. 1799, was again introduced, the reading in full thereof unanimously waived, and duly passed and adopted at a regular meeting of the City Council held on the _____day of _____________, 2026, and said ordinance was adopted by the following vote:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Clemente, California, this _____ day of _____________, ______. __________________________
CITY CLERK of the City of
San Clemente, California
Approved as to form:
_____________________________
Elizabeth A. Mitchell, City Attorney
Ordinance No. 1799 Page 2
Attachment 6