MAYOR CITY MANAGER
Valerie Amezcua Alvaro Nunez
MAYOR PRO TEM R: S,,, CITY ATTORNEY
David Penaloza Sonia R. Carvalho
COUNCILMEMBERS CITY CLERK
Phil Bacerra Jennifer L. Hall
Johnathan Ryan Hernandez
Jessie Lopez
Thai Viet Phan
Benjamin Vazquez
CITY OF SANTA ANA
PUBLIC WORKS AGENCY
20 Civic Center Plaza+ P. O. Box 1988
Santa Ana. California 92702
www, santa- ana. org
March 10, 2026
Ms. Barbara Orozco
Subject: City of Santa Ana Response to Valid Legal Objection Dear Ms. Orozco:
Thankyou for your correspondence, whichwas receivedFebruary9, 2026 by the City Clerk' s office. Your correspondence meets the requirements of a valid legal objection pursuantto GovernmentCodesection53759.1. This letterconstitutesthe City of Santa Ana' s response.
1. The City retained an independent rate consultant to conduct a robust cost of service analysis and rate study, which constitutes the administrative record and demonstrates that the rates do not exceed the proportional cost of service. California courts have routinely held that customers may be grouped into classes based on similar usage characteristics, and such classifications satisfy Proposition 218's requirement to allocatecostsbasedon the proportionalcost of serviceto the parcel. Here, the City classified customers based on the size of the meter serving the parcel. On the fixed charge side, this allowed for proportional allocation of the City's fixed costs based on capacity demand on the system, using ratios for maximum flow. On the volumetric side, this allowed the City to allocate costs based on relative system investment as wellas sharedusagecharacteristicsstemmingfromthe sizeof the meterservingthe parcel.
For more information, please review the rate study at:
https:// SantaanautiIityrates. com/ wp- content/ uploads/ 2026/ 01/ Cit - of- Santa- Ana- 2025-Water-and-Sewer-Rate-Study-Report.pdf
2. As set forth in Table 52 of the study, the City only allocates the fixed costs associated with the delivery of water services that do not fluctuate based on water use, including
SANTA ANA CITY COUNCIL
Vaie6e Amezcua David Penaloza Thai Viet Phan Benjamin Vazquez Jessie Lopez Phil Bacera Johnalhan Ryan HernandezMayor Mayor Pra Tam- Ward 6 ward 1 Ward 2 Ward 3 Ward 4 Ward 5 yamezcua( telsanta- ana. org dpenalozardsanta- ana, orn lohantrasanla- ana, oep bvazauezCa7sanla- anaorc essielopez@santa- ana. ora phacerransanta- ana. org irvanhemandez@zanta- anax Ms. Barbara Orozco
March 10, 2026
fixed meter costs ( costs associated with reading and maintaining meters); fixed infrastructure costs associated with capacity and delivery, and fixed infrastructure costs associated with delivering water through public hydrants. These include things like facilities repairs and replacements, meter capacity, and customer service. The variable rates, on the other hand, include water supply costs, and costs of managing water resources and distributing water. No variable costs are recovered through the fixed charges.
3. The pass- through adjustment mechanism is not self- executing. Rather, the City is carving out the authority to pass through rate increases adopted by wholesale water providers. The amount of the pass- through, if any, is limited by the actual rate increase, and will never exceed cost of service.
4. The pass-through authority will not exceed 5 years from adoption, as will be set forth in the resolution adopting the rates.
5. The City strivesto establishratesthat are affordable. However, while the Citydoes considerall cost-saving mechanisms, it must also ensurethat each utility is self- sufficient. Importantly, the City only recoverswhat it needsto providethe property- related service, and further, the City actually subsidizes water utility by nearly $ 1. 5 Million from unrestricted revenues, which reduces rates by approximately$ 0.15 in Tier
1. This isnotrequiredunderProposition218, butwasimplementedinorderto provide savings to City water customers.
6. The Proposition 218 notice meets all legal requirements. Should you have any questions, please contact the City at ( 714) 647- 3320.
Sincerely,
Rodolfo osas, P. E.
Acting Executive Director of Public Works
SANTA ANA CITY COUNCIL
Valerie Amezcua David Penaloza Thai Viet Phan Benjamin Vazquez Jessie Lopez Phil Bacerra Johnathan Ryan Hernandez Mayor Mayor Pro Tem- Ward 6 Ward t Ward 2 Ward 3 Ward 4 Ward 5 vamezcua! ov7santa- ana. oro doenaloza af san[ a- ana. aM tphan(&. santa- ana. ora bvaz a
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MAYOR CITY MANAGER
Valerie Amezcua r ! Alvaro Nunez
MAYOR PRO TEM CITY ATTORNEY
David Penaloza Sonia R. Carvalho
COUNCILMEMBERS CITY CLERK
Phil Bacorra AJennifer L. Hall
Johnathan Ryan Hernandez
Jessie Lopez
Thai Viet Phan
Benjamin Vazquez
CITY OF SANTA ANA
PUBLIC WORKS AGENCY
20 Civic Center Plaza . P. O. Box 1988
Santa Ana, California 92702
www. santa- ana. orq
March 10, 2026
Swithin Lindbeck
Subject: City of Santa Ana Response to Valid Legal Objection Dear Swithin Lindbeck:
Thankyou for your correspondence, whichwas receivedFebruary5, 2026 by the City Clerk' s office. Your correspondence meets the requirements of a valid legal objection pursuantto GovernmentCodeSection53759.1. This letterconstitutesthe Cityof Santa Ana' s response.
Uponconsiderationofthe issuesraisedin the letter, the Citydoesnotbelieveany issues raised in the letter warrant a change to the proposed water and sewer rates for the reasons described below. The substantial evidence supporting the proposed rate structure is set forth in great deal in the cost of service analysis and rate study, which can be found here:
https:f/santaanautiIitvrates. com/wp- content/ uploads/ 2026/ 01/City-of-Santa- Ana- 2025- Water- and- Sewer- Rate-Study-ReDort.Pdf
The bulk of the letter revolves around the misunderstanding that the proposed rates eliminate customer classes. This is not true. The proposed rate structure does not eliminate customer classes for water customers. Instead, it classifies customers based onthe sizeof the meterservingthe parcel.
Thesizeof the meterservingthe parcelreflectscommonusecharacteristicandcapacity investments associated with the varying meter sizes. In other words, similarly sized meters use water in a similar manner, and larger meter sizes reflect greater investment in the water system through capacity fees and fixed monthly charges. Proposition 218 authorizes establishing customer classes based on shared characteristics, and the City's rate study demonstrates that the shared characteristic between customer classes is the
SANTA ANA CITY COUNCIL
Valerie Amezcua David Penaloza Thai Viet Phan Benjamin Vazquez Jessie Lopez Phil Bacerra Johnathan Ryan HernandezMayor Mayor Pro Tom- Ward 6 Ward 1 Ward 2 Ward 3 Ward 4 Ward 5 vamezcua( p sanla- ana. om dpenalpzala santa- ana. ora Ephan( rilsanta- ana. orp byazppezra7aanla- ana, 0M less€ elooezCo1santa- ano. orp pacerra santa- ano. o jryanhernandezp( 1.santa- apa. o1 Swithin Lindbeck
March 10, 2026
sizeofthe meterservingthe parcel. Additionally, the primaryincrementalcostsupporting the two tiers is source of supply, with tier one paying for groundwater costs, and tier two payingfor imported water. Costs for peaking are factored intothe fixed charges applicable to each customer, which vary based on the size of the meter servingthe parcel.
Finally, the City uses meter equivalents for sewer rates based on average winter water use rations for each meter size. These ratios reflect sewer flow differences attributable to each meter size, and serves as an effective proxy for projecting flows that return to the sewer.
Importantly, Coziahr v. Otay Water District and Patz v. City of San Diego took issue with creating customer classes, as opposed to consolidating them. Additionally, Dreher V. City of LosAngelesDepartmentof Waterand Powerreinforcesthatagencieshaveflexibility and discretion in establishing rate structure, so long as the rate within each tier reflects the cost of service within such tier. The City's rate study clearly demonstrates that this is the case.
The letter includes additional claims that the City's Proposition 218 notice understates bill impacts. The City provides bill impacts as a courtesy, but this information is not required under article Xlll D, section 6 of the California Constitution. As such, the notice meets all constitutional limitations and requirements. Similarly, nothing in Proposition 218 mandates that an agency implement any particular frequency in billing. As such, there is no violation of Proposition218 resulting from the transition to monthly billing.
As explainedclearlyin the City's Proposition218 notice, the deadlinefor submittingan objection is March 10, 2026, to allow the City to review and provide a timely response.
Whilethe City is alwayshappyto listento any additionalconcernsyou may have, no further objectionsor legal argumentswill be consideredfor purposesof exhausting administrative remedies after the deadline of March 10, 2026, set forth in the Proposition 218 notice.
If you have specificquestionsaboutthe impactsof the proposedrateson your parcel, pleasefeelfreeto call714-647-3320, and Citystaffwouldbe happyto walkthroughyour particular circumstances.
Sincerel
odolfo Rosas, P. E.
Acting Executive Director of Public Works
SANTA ANA CITY COUNCIL
Valerie Amezcua David Pena€ oza Thai Viet Phan Benjamin Vazquez Jessie Lopez Phil 13acerra Johnathan Ryan Hernandez Maynr Mayor Pro Tem- Ward 6 Ward? Ward Ward Ward Wards vamezcua santa- ana. cr dpenalozaOsapts- sna. ora 1 han. sarta- ana orc pyazGUezr& sanla- ana. orq lessielopez( n santa- ana. orq phacema@santa- ana_ om anhemandez santa- ana. oi
MAYOR CITY MANAGER
Valerie Amezcua r Alvaro Nunez
MAYOR PRO TEM CITY ATTORNEY
David Penaloza Sonia R. Carvalho
COUNCILMEMBERS CITY CLERK
Phil
Bacerra Jennifer L. Hall
Johnathan Ryan Hernandez
Jessie Lopez
Thai Viet Phan
Benjamin Vazquez
CITY OF SANTA ANA
PUBLIC WORKS AGENCY
20 Civic Center Plaza• P. O. Box 1988
Santa Ana, California 92702
vuww. santa- ana. orq
March 16, 2026
Ms. Nelida Mendoza
Subject: City of Santa Ana Response to Correspondence Dear Ms. Mendoza:
Thank you for your correspondence, which was received on March 10, 2026 by the City Clerk' s office. Your correspondence does not meet the requirements of a valid legal objection pursuant to Government Code section 53759. 1 because the letter does not identifya legal concernwith the proposedrates. However, the City will consideryour comments and your letterwill count as a ,protestfor determiningwhether a majority protest exists.
Should you have any questions, please contact the City at (714) 647-3320.
Sincerely,
odolfo osas, P. E.
Acting Executive Director
Public Works Agency
SANTA ANA CITY COUNCIL
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