TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Hillary Guirola-Leon, Finance Director
DATE: May 13, 2026
SUBJECT: APPROVAL OF RESOLUTION R-26-09 AUTHORIZING THE
COLLECTION OF SEWER SERVICE CHARGES ON THE LOS
ANGELES COUNTY PROPERTY TAX ROLL FOR FISCAL
YEAR 2026-2027
STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
Well-Maintained Infrastructure
BACKGROUND/DISCUSSION
As part of the Fiscal Year (FY) 2025–26 Priority Initiatives, the City Council identified achieving a financially self-sustaining sewer system as a strategic objective. To support this effort, the City engaged Raftelis Financial Consultants Inc. to prepare a Comprehensive Sewer Rate Study establishing a long-term funding plan for the City’s aging sewer infrastructure.
The Sewer Rate Study, completed in April 2025, established maximum sewer service charges for FY 2025–26 through FY 2029–30 in compliance with Proposition 218. Following public outreach, including a Town Hall meeting, and a duly noticed public hearing conducted in accordance with Proposition 218 and AB 2257, the City Council adopted Resolution No. R-25-21 establishing maximum sewer service charges through July 1, 2029.
For FY 2025–26, the City Council exercised its discretion to set the annual sewer service charge at $312 per Sewer Unit (SU), which reflects a 25% Tony Chou, Mayor
Calvin Lo, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Gretchen Shepherd Romey, Council Member
Capital Improvement Program (CIP) funding scenario, rather than the maximum rate $ 522 per Sewer Unit (SU) authorized under the Study.
Under Proposition 218, after conducting the public hearing establishing the rate schedule through FY 2029-30, the City Council is authorized, each fiscal year, to set the annual sewer rate charge at an amount equal to or less than the authorized maximums. The maximum rate authorized under Resolution No. R-25-21 for FY 2026-2027 is $537.66.
On April 8, 2026, Council provided staff with direction on the Sewer Service charge for Fiscal Year 2026-27. Council directed staff to assess a rate of $321.36 per sewer unit (SU) for the FY 2026-27 Tax roll preparation. This is a 3% increase from the current rate of $312 per SU.
Staff now returns to the City Council to request authorization to place the FY 2026–27 sewer service charges on the Los Angeles County property tax roll at an annual rate of $321.36 per Sewer Unit.
FISCAL IMPACT & PROCUREMENT REVIEW
Staff recommend the approval of Resolution No. R-26-09 Establishing Sewer Service Charge Amounts, and authorizing the collection of the Sewer Service charges on the Los Angeles County Property Tax Roll for Fiscal Year 2026-27.
The anticipated total collection will be approximately $1,588,645.
This report requires no procurement review.
LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.
RECOMMENDATION
Staff recommend the approval of Resolution No. R-26-09, Establishing Sewer Service Charge Amounts, and authorizing the collection of the Sewer Service charges on the Los Angeles County Property Tax Roll for Fiscal Year 2026-27.
If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve Resolution No. R-26-09, Establishing Sewer Service Charge Amounts, and authorizing the collection of the Sewer Service charges on the Los Angeles County Property Tax Roll for Fiscal Year 2026-27.”
ATTACHMENTS
1. Resolution No. R-26-09 Authorizing the Collection of Sewer Service Charges on the Los Angeles County Property Tax Roll for Fiscal Year 2026-27
2. Resolution No. R-25-21, Establishing Sewer Service Charges for Sewer Collection Services, with Annual Updates Through July 1, 2029