Wastewater Funds are increasing due to: inflation outpacing assumptions in previous water and wastewater rate models for both operations and maintenance and capital costs; significant increases in allocated costs, including property and liability insurance; and increased policy reserve minimums due to increases in operating and capital costs. As a result, the City’s rate consultant is recommending increases in the City’s water and wastewater rates to sufficiently meet the needs of the water and wastewater utilities over the next four years.
Under California Constitution article XIII D, § 6, (often referred to as Proposition 218) Council is required to consider all written protests against the proposed rates submitted at or before the Public Hearing. If written protests against the proposed rates are presented by a majority of parcel owners, or other eligible City utility customers, at or before the hearing, the City may not impose the rates as proposed. Only one written protest per parcel or service address may be counted. Oral protests are not counted towards a majority protest but may be considered by Council in its deliberations. The Notice of Public Hearing was mailed on April 24, 2024, to all active account holders who receive water, wastewater, or solid waste service from the City. The notices were mailed to the addresses where active account holders regularly receive their paper bills.
Additionally, on April 30, 2024, City staff emailed a digital copy of the mailed notice to all active account holders with an email address associated with their City utility billing account. The notice advised customers of the proposed rate changes; the date, time, and location of the Public Hearing; and, how to protest the proposed rate changes.
As of June 5, 2024, the City has received 9 protests of the water rate changes (3 written protests and 6 pieces of returned mail, which were counted as protests), 8 protests of the wastewater rate changes (2 written protests and 6 pieces of returned mail) and 6 protests of the solid waste rate changes (0 written protests and 6 pieces of returned mail). The City has also received comments emailed from 8 individuals relating to the proposed rate changes.
DISCUSSION:
Water and Wastewater Rate Change Background
On October 3, 2023, Council approved a contract with HDR Engineering Inc., (HDR) to conduct comprehensive water and wastewater rate studies and 10-year financial plans for the water and wastewater utilities. The City regularly conducts water and wastewater rate studies, which include rate revenue projections for the next 10 years. The last water rate study was completed in 2021, and the last wastewater rate study was completed in 2022. HDR and staff have been presenting regularly to the Water Commission, Finance Committee, and Council to receive feedback and policy direction on the proposed rates.
Included below is a summary of the public meetings:
Meeting Date Meeting Body Meeting Summary
September 21, 2023 Water
Commission
Recommended that Council authorize staff to
execute a contract with HDR for a rate study.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
October 3, 2023 Council Authorized staff to execute a contract with HDR for a rate study.
October 19, 2023 Water
Commission
Staff and HDR introduced the governing
principles and goals of the water and
wastewater rate study.
January 18, 2024 Water
Commission
Staff and HDR presented revenue requirement
options for water and wastewater. The options
for each utility included varying levels of capital
funding and use of reserves below policy level.
Received input from the Commission on which
option to pursue.
February 15, 2024 Water
Commission
Staff and HDR presented updated revenue
requirement options for water and wastewater.
Received input from the Commission on which
option to pursue.
February 27, 2024 Finance
Committee
Staff and HDR presented revenue requirement
options for water and wastewater. The options
for each utility included varying levels of capital
funding and use of capital reserves below policy
level. The Committee recommended that
Council direct staff to complete a cost of service
analysis and return with a final rate notice.
February 27, 2024 Council Staff and HDR presented revenue requirement options for water and wastewater. The options
for each utility included varying levels of capital
funding and use of capital reserves below policy
level. Council directed staff to complete a cost
of service analysis and return with a final rate
notice.
March 21, 2024 Water
Commission
Staff and HDR presented the proposed water
and wastewater rates. Water Commission
approved the staff recommendation 4:0:1 to set
a public hearing date and notice the proposed
rates, and forwarded the item on to Finance
Committee and Council.
April 9, 2024 Finance
Committee
Staff and HDR presented the proposed rates.
Finance Committee approved the staff
recommendation 2:1:0 to set a public hearing
date and notice the proposed rates to
customers.
April 9, 2024 Council Staff and HDR presented the proposed rates.
Council approved the staff recommendation
6:1:0 to set a public hearing date and notice the
proposed rates to customers.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
May 22, 2024 Public
Webinar
Staff held an informational public webinar for
members of the public to learn more about the
proposed water and wastewater rates.
Recordings of all the above meetings are available on the City’s website.
Full reports compiled by HDR on the proposed water and wastewater rates are available for review online at www.SantaBarbaraCA.gov/RateChanges or in person at the City Clerk’s office in City Hall.
Wastewater Rate Changes for Fiscal Years 2025 - 2028
The City’s wastewater system plays an essential role in protecting public health and the environment. Maintaining the City’s wastewater system requires a proactive commitment to investing in the capital infrastructure and resources necessary to keep this vital system operating 24 hours a day, 365 days a year. The City’s complex wastewater system includes 256 miles of sewer mains, 7 lift stations, 25 creek crossings, over 7,000 access structures (manholes and cleanouts), 2 miles of pressurized force mains, and the El Estero Water Resource Center (El Estero) – all of which must operate seamlessly to process approximately 2 billion gallons of wastewater annually.
Revenue Requirement and Cost of Service Analysis
During the rate setting period, revenues must be sufficient to meet the costs of the City’s wastewater system, including operations and maintenance expenses, capital improvements, mandated standards of treatment, principal and interest payments on existing debt, reserves, and other obligations. In addition, recent inflation has outpaced the assumptions in previous wastewater models for both operations and maintenance and capital costs. The wastewater utility is also experiencing significant increases in allocated costs including property and liability insurance, and increased reserve minimums due to increased operating and capital costs1. The sum of these factors contributes to the need for an average annual revenue increase2 of 9.5% for Fiscal Year 2025 – Fiscal Year 2028.
To help mitigate rate impacts to customers, capital reserves are being drawn down below minimum policy levels. This results in capital reserves dropping below City policy in multiple years, with a maximum of $1.3M (~10%) below Council policy in Fiscal Year 2028. Reserves are projected to return to City policy levels in Fiscal Year 2030 (outside of this 4-year rate setting period) based on the 10-year financial plan assumptions, which include future wastewater rate adjustments.
1 Reserve minimums are calculated based on the planned operating and maintenance, and capital budgets. Therefore, reserve minimums increase as costs increase. 2 It is important to note that rate revenue increases do not equate precisely to rate increases or bill impacts to individual customer classes of service. For example, a single-family residence with average wastewater use may see different impacts than a commercial customer.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
The total revenue requirement less non-rate revenue from other sources is defined as the “cost of service” for any given fiscal year. After determining the cost of service, rates are then designed to apportion the cost of service among the customer classes, according to the proportionate share of costs of service attributable to each customer class. A cost of service analysis is forward-looking and determines the proportional distribution of the revenue requirement to the City’s customer classes of service (i.e., residential, commercial, industrial).
Rate Structure and Proposed Rates
No changes to the City’s wastewater rate structure are proposed for this study. Residential wastewater bills are made up of two components: (1) a volumetric charge based on water usage, and (2) a fixed monthly base charge based on the number of dwelling units served by the account. For single-family customers, wastewater volumetric charges are capped at 8 hundred cubic feet (HCF) of water use. The purpose of capping the volumetric charges is to recognize that water use above this level is likely being used for outdoor watering, which does not enter the wastewater collection system or receive treatment at El Estero. The multifamily customer class does not exhibit a strong outdoor irrigation pattern, meaning most water usage is being used primarily indoors and discharged to the City’s wastewater system.
Therefore, there is no volumetric cap for multi-family residential customers.
There are two commercial classes of service: Commercial, and Commercial High Strength/Industrial. Both classes are charged the greater of their volumetric charges or minimum monthly bill amount based on water meter size.
The City also has High Strength Surcharges that cover the additional treatment costs associated with high strength wastewater streams that exceed certain levels of Biochemical Oxygen Demand (BOD), Total Suspended Solids (TSS), and/or Ammonia. Discharges that fall in this category include, but are not limited to, domestic septic tank/portable restroom discharges, industrial laundry services, and alcoholic beverage manufacturing (e.g., breweries, wineries, and distilleries). The cost of service analysis has determined the proportional allocation of costs on a per pound basis for BOD, TSS, and Ammonia. The vast majority of commercial customers do not receive High Strength Surcharges.
Water Rate Changes for Fiscal Years 2025-2028
Revenue Sufficiency
On a long-term basis, revenues must be sufficient to meet the costs of the City’s water system, including operations and maintenance expenses, capital improvements, mandated standards of treatment, principal and interest payments on existing debt, Council policy reserves, and other obligations. Additional rate impacts are due to: inflation outpacing assumptions in previous water rate models for both operations and maintenance and capital costs; significant increases in allocated costs, including property and liability insurance; and increased reserve minimums due to increased operating and capital costs.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
The sum of these factors contributes to an annual revenue increase3 of 10.5% for Fiscal Years 2025-2026 and 10% for Fiscal Years 2027-2028.
The proposed rate plan includes drawing down capital reserve funds to mitigate rate impacts to customers. This will result in capital reserves dropping below City policy in multiple years, with a maximum of $6.3M (~20%) below Council policy in Fiscal Year 2026. Reserves are anticipated to return to City policy levels in Fiscal Year 2029 (outside of this 4-year rate setting period) based on the 10-year financial plan assumptions, which include future water rate adjustments.
Upcoming capital improvements include: replacing 6 miles of water main annually (2% of the system), transmission system upgrades, reservoir replacement, and water treatment facility upgrades. Continued investment in the water system is essential to providing safe and reliable drinking water to the City’s customers. Additionally, the proposed rates will be sufficient to meet all financial obligations of the utility, including debt service and coverage requirements.
Rate Structure and Proposed Rates
Water bills are made up of two components: (1) a volumetric charge based on water usage, and (2) a fixed monthly service charge based on meter size. Even though the majority (~85%) of costs to maintain and operate the water system are fixed, the City’s water rate structure is designed to minimize increases to fixed charges by collecting approximately 30% of revenues from fixed charges while collecting the majority (~70%) of revenue through volumetric charges, which are dependent on water usage. This gives customers an opportunity to reduce their water bill by decreasing water usage.
Council has established priorities for allocating water sources to the different customer classes and tiers within the customer classes. The lowest-cost water sources are allocated to Tier 1 customers, and the more expensive water sources are allocated to the highest tiers, as water supplies are limited, and higher water use is generally for discretionary purposes beyond efficient irrigation use and basic health and sanitation needs.
The City’s tiered rate structure is supported by a diverse water supply portfolio, with different supply costs for each of the City’s associated water sources. It is important to recognize that water used from the City’s various water sources can change from year to year based on hydrology, availability, and operational and management objectives aimed at providing reliable water service. To improve stability in water rates, the City’s rate consultant has calculated the volumetric water rates based on the total potential yield of each supply source, adjusted proportionally by the ratio of total yield of all sources versus actual customer consumption, ensuring all sources were within their 3 It is important to note that rate revenue increases do not equate precisely to rate increases or bill impacts to individual customer classes of service. For example, a single-family residence with average water use may see different impacts than a commercial customer.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
sustainable yield. This approach reduces rate volatility resulting from year-to-year changes in supply sources.
Rates Based on Proposition 218 Cost of Service Analysis The total revenue requirement, less non-rate revenue from other sources, such as interest earnings and payments made by other agencies that benefit from the City’s water treatment plant, is defined as the “cost of service.” This cost of service is used as the basis for proportionally distributing costs to the City’s customer classes. Rates, including tiers within each customer class, are designed in accordance with Proposition 218 so that each customer class pays a proportionate share of costs, based on the cost of service to supply water.
The tables below show examples of wastewater and water bills for single family homes based on various usage levels.
Wastewater
Usage
Level
Monthly
Usage (HCF)
Current
Bill
Proposed
FY 25 Bill
Proposed
FY 26 Bill
Proposed
FY 27 Bill
Proposed
FY 28 Bill
Low 4 $44.12 $48.02 $52.58 $57.57 $63.06
Moderate 10 $61.24 $66.14 $72.42 $79.29 $86.86
High 20 $61.24 $66.14 $72.42 $79.29 $86.86
HCF: Hundred Cubic Feet (1 HCF = 748 gallons)
Water
Below example based on a 5/8” meter
Usage
Level
Monthly
Usage (HCF)
Current
Bill
Proposed
FY 25 Bill
Proposed
FY 26 Bill
Proposed
FY 27 Bill
Proposed
FY 28 Bill
Low 4 $53.00 $58.17 $64.25 $70.69 $77.77
Moderate 10 $144.14 $150.03 $165.77 $182.35 $200.59
High 20 $349.44 $381.49 $421.53 $463.69 $510.05
HCF: Hundred Cubic Feet (1 HCF = 748 gallons)
Wastewater and Water Rate Outreach
The City has increased public outreach associated with the anticipated water and wastewater rate changes. Since potential bill increases are larger than have been experienced in recent years, staff implemented a heightened level of outreach to raise awareness and ensure customers understand the facts behind the rate study cost drivers.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
Key messages and talking points were developed to guide communication efforts and touch on the most common questions.
In April, the Notice of Public Hearing that is required to be sent to customers (and is quite prescriptive in what information must be shared), also included a fact sheet that discussed the drivers behind the rate increases, what bills pay for, available customer resources, bill impacts to customers, and an invitation to join an informational webinar on the rates (see Attachment 1). The City also included this information in the monthly utility bill inserts, weekly City News in Brief email newsletters, and the quarterly Water Resources email newsletter.
Staff created a webpage dedicated to the current rate changes that includes information on the need for the proposed increases, answers to frequently asked questions, the rate notices and fact sheet, links to recordings of all public meetings that discussed the proposed rates, and the full rate reports. The fact sheet, rate notices, and webpage were all translated into Spanish. Social media outreach was conducted on Facebook, Nextdoor, and X (formerly Twitter), as well as an announcement on the new WaterSmart customer portal. Staff also released a press release regarding the proposed rate changes. Additionally, staff presented a public webinar on May 22, 2024, to share information about the need for the rate changes and the rate creation process, and to answer questions from the public. The webinar was recorded and posted on the website. A Spanish translation of the webinar was also posted on the website.
The City is not alone in facing a significant jump in costs of service. Many agencies locally and around the state are taking actions to increase rates to match the cost of providing critical water and wastewater services.
Water Commission, Finance Committee, and Council
On March 21, 2024, Water Commission approved the staff recommendation 4:0:1 (4 in support, 1 abstention due to absence) to set a public hearing date and notice the proposed rates, and forwarded the item on to Finance Committee and Council. On April 9, 2024, Finance Committee approved the staff recommendation 2:1:0 and Council approved the staff recommendation 6:1:0 to notice the proposed rates to customers and set a public hearing.
Solid Waste Rate Change for Fiscal Year 2025
Several factors inform the proposed Fiscal Year 2025 rates, as outlined below.
Waste Processing and Disposal
In 2016, the County of Santa Barbara and the Cities of Santa Barbara, Goleta, Buellton, and Solvang worked together to develop and build the ReSource Center at the Tajiguas Landfill. The ReSource Center is a state-of-the-art resource management facility that significantly increases the diversion of trash from landfill disposal, thereby extending the life of Tajiguas, and providing a long-term waste management solution for the South Coast.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
The ReSource Center consists of a Materials Recovery Facility (MRF) that sorts trash and recovers recyclable commodities, as well as an anaerobic digester that converts organics recovered from the MRF into compostable material and biogas. In December 2018, the City executed a 22-year Materials Delivery Agreement with the County that commits the City’s waste and associated tipping fees for processing material at the ReSource Center. The County is increasing tipping fees from $176 per ton in Fiscal Year 2024 to $189 per ton in Fiscal Year 2025 to keep up with inflation and other cost increases.
Waste Collection and Hauling
The City adopted its current solid waste franchise hauler agreement with MarBorg Industries (MarBorg) on April 18, 2023, which went into effect on June 8, 2023. As part of this agreement, MarBorg’s base compensation for curbside cart collection and other collection services remains flat in Fiscal Year 2025. In future years, increases to compensation will be based on inflation.
Franchise Fees
Franchise fees are paid by MarBorg to the City for the use of the City’s rights-of-way and impact of the solid waste service on municipal infrastructure. These fees are part of the negotiated franchise agreement and represent costs the City incurs for the right of use of City infrastructure. Franchise fees are incorporated into the rates.
City Programs
In addition to paying for waste hauling and disposal, solid waste rate revenue also pays for various City programs managed by the Clean Community Division. These programs include abandoned waste removal in the public rights-of-way, maintenance of public containers (i.e., public trash cans), clean-up and abatement of encampments throughout the City, public education and outreach, compliance with City reserve policies, and other environmental programs that ensure the City complies with rapidly developing State regulations and maintains its status as an environmentally forward City.
Fiscal Year 2025 Rate Increase
Several factors inform the proposed Fiscal Year 2025 rates. As mentioned above, the increase of County tipping fees to $189 per ton in Fiscal Year 2025 will increase overall solid waste rates by 2.8%. An adjustment to the Franchise Fee will reduce overall rates by 0.2%. Changes to Clean Community program fees will decrease overall rates by 0.7%.
The combination of these adjustments results in a 1.9% total increase for solid waste rates, as shown in the table below.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
Santa Barbara Rate Increases Effective July 2, 2024
Hauler (MarBorg) Compensation 0.0%
Tipping Fee Increase (County) 2.8%
Other City Programs -0.9%
TOTAL Change to Customer Charges 1.9%
BUDGET/FINANCIAL INFORMATION:
The proposed rate schedules support the Water and Wastewater Funds budget submittals for Fiscal Year 2025, and align the funds with their 10-year financial plan. Over the four year rate setting period, the proposed water and wastewater rates will generate necessary rate revenue, which when combined with non-rate revenue and use of reserves, will be sufficient to support the costs of operating and maintaining the water and wastewater systems. Under the proposed water and wastewater rate structures, the City will utilize non-rate revenue and capital reserves below policy level to reduce, or “buy down”, the revenue requirement, which is the total amount of funding that needs to be generated from rate payers in any given year.
The City has executed two long-term water supply agreements: (1) a Recycled Water Agreement with the La Cumbre Mutual Water Company, and (2) a Water Supply Agreement (WSA) with Montecito Water District for the sale of potable water secured by the Charles E. Meyer Desalination Plant. Without these agreements, particularly the WSA, the City would need to either significantly increase rates above what is being proposed, reduce planned capital investments in aging infrastructure, or execute a combination of these actions. Continuous deferral of capital funding would lead to underinvestment in the water system, leading to more frequent emergency repairs and higher maintenance costs in the future.
Under the proposed solid waste rates, the City will fulfill its contractual obligations to the County for waste processing and to MarBorg for franchised waste hauling services. The proposed rates also enable compliance with State regulations and fund additional management of encampment and community clean-up.
ENVIRONMENTAL REVIEW:
The Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates falls outside of the definition of a “Project” under California Environmental Quality Act (CEQA) Guidelines section 15378 (b)(5), as administrative activities of governments that will not result in direct physical changes in the environment are not subject to CEQA environmental review. Any future project that would come as a result of rate changes will be subject to CEQA environmental review.
Council Agenda Report
Public Hearing on Proposed Changes to Water, Wastewater, and Solid Waste Rates June 25, 2024
ATTACHMENTS: 1. Water and Wastewater Rate Fact Sheet
2. Notices of Public Hearing on Utility Rates
PREPARED BY: Joshua Haggmark, P.E., Water Resources Manager/GC/ld Julie Lawrence, Clean Community Manager
SUBMITTED BY: Clifford M. Maurer, P.E, Public Works Director Alelia Parenteau, Sustainability and Resilience Director APPROVED BY: Kelly McAdoo, City Administrator
Replacing Aging Infrastructure,
Investing for Today
and Tomorrow
Ensuring Sufficient Rates to Fund
Critical Infrastructure
In order to implement a long-term plan to replace aging infrastructure and to ensure reliable, 24/7 service, the City is proposing annual rate adjustments over the next four years. This recommendation is based on the cost to provide services to guarantee rates are sufficient to:
• Cover costs needed to operate and maintain over 600 miles of pipes, four treatment plants, and other essential facilities. • Invest in critical improvement projects, including replacing old pipes and infrastructure that have reached the end of their useful lives. • Recover from inflationary increases that have far outpaced the costs that rates were initially set to recover.
What Your
Bill Pays For
April 2024
Santa Barbara’s water and wastewater systems represent some of the largest public infrastructure investments in our City. Replacing aging pipes and facilities – some dating back to the 1890s – requires significant funds to ensure safe, reliable service 24 hours a day, 365 days a year.
Water is a vital resource in our modern
life, and still remains one of the least
expensive goods we consume.
Average price per gallon (Source: Numbeo)
City water
Bottled water
Milk
Gasoline
$0.02
$2.33
$4.26
$5.03
Water is Essential
9% Water Sources 12% Debt Service25%
General Administrative CostsInfrastructure Reinvestment 11%
Water and Wastewater Treatment
19% 24% Water Distribution and Wastewater Collection
Your monthly bill helps
ensure we keep our
water and wastewater
systems maintained and
operating around the
clock, which is key to
protecting public health
and the environment.
The vast majority of
costs do not vary based
on water availability;
infrastructure must be
operated and maintained
even if reservoirs are full.
Proposed Rate Increases
As a public utility, our rates can only include the costs of providing water and wastewater utility services. Revenues from rates are used to run the utilities and do not generate profit or go towards other City programs.
Rates also must be proportionally distributed among customer classifications such as residential, commercial and irrigation users.
Unfortunately, “do nothing” is not an option for maintaining our critical infrastructure. Delaying important investments will only make it more expensive in the future and could lead to emergencies that will be exponentially more expensive and disruptive than planned maintenance.
ATTACHMENT 1
Customer Resources are Available
The City understands the difficulties we all face
from rising costs and is working hard to minimize
rate increases while ensuring safe and reliable
services that we rely on 24/7.
For water customers, we continue to offer customer
assistance programs including payment arrangement
plans, a waiver of the Utility Users Tax for qualifying low-income customers, water leak relief, and a
mixture of residential and commercial rebates to
encourage the efficient use of water. We’ve recently
partnered with the Alliance for Water Efficiency on
a Water Rate Affordability Study to evaluate utility
rate affordability challenges and potential solutions.
Scan this code using
the camera on your
phone to learn more
about the proposed
rate changes and
webinar registration.
To learn more, join our
informational webinar on
Wednesday, May 22 at 6 pm.
Water and sewer mains are some of the City’s largest
assets and both are priority areas for this rate proposal.
The City is currently replacing 2% of water mains and
rehabilitating 1% of the sewer mains every year.
We’re Seeing Results from Investment
While the impacts of climate change and aging
infrastructure are increasing, we’re already seeing
the benefits of proactive investments in system
improvements versus costly reactive repairs. As
a result of planned upgrades, treated wastewater
from the El Estero Water Resource Center continues
to consistently meet state and federal regulations.
The City replaces an average of six miles of water mains annually. In the last several years, the costs for main replacement performed by contractors has increased by
an average of 20% per year.
Date: Tuesday, June 25, 2024, 2:00 p.m.
Place: City of Santa Barbara Council Chambers, City Hall, 735 Anacapa Street, Santa Barbara Meeting details will be posted no less than 72 hours prior to the start of the Public Hearing on the City Council meeting agenda located at SantaBarbaraCA.gov/CAP NOTICE OF PUBLIC HEARING:
PROPOSED CHANGES TO CITY OF SANTA BARBARA WASTEWATER RATES *Applicable to all accounts serving two to four detached dwelling units, Accessory Dwelling Units served by their own water meter, and all accounts serving a dwelling unit attached to no more than 3 additional dwelling units. **Applicable to all accounts serving five or more dwelling units, and to accounts serving a dwelling unit attached to 4 or more additional dwelling units.
PROPOSED WASTEWATER RATES FOR:
FISCAL YEARS 2025, 2026, 2027, AND 2028
You are receiving this notice because our records indicate that you are a City of Santa Barbara utility customer. If you are not a City wastewater customer, please disregard this Notice.
This Notice describes proposed changes to wastewater rates and explains how you can participate in the public process. The City’s wastewater rates are based on a comprehensive rate study that uses a rate model to evaluate the cost of wastewater service, as required by Article XIII D, Section 6 of the California constitution.
Why are wastewater rates changing?
The City’s wastewater system plays a leading role in the protection of public health and the environment.
Maintaining the wastewater system requires a proactive commitment to investing in the capital infrastructure and resources necessary to keep this vital system operating 24 hours a day, 365 days per year. The proposed rate changes will enable the City to meet the needs of the wastewater system, including operation and maintenance costs, capital improvements, mandated standards of treatment, debt service, contingency reserves, and other financial obligations.
What goes into a wastewater bill?
Residential wastewater bills are made up of two key components: (1) a volumetric charge based on water usage, and (2) a fixed monthly base charge. For single-family customers, wastewater volumetric charges are not charged above a certain level of water use. Commercial customers are charged the greater of their volumetric charges or minimum monthly bill amount based on meter size.
How do I stay informed?
• Watch City Council meetings online at SantaBarbaraCA.gov/CityTV or tune in to City TV Channel 18. • Explore information on rate changes at SantaBarbaraCA.gov/RateChanges. • Contact City staff at (805) 564-5387.
• Attend City Council meetings in person or electronically: visit SantaBarbaraCA.gov/CAP for meeting details.
How will the proposed changes impact my wastewater bill? The table below shows sample wastewater bills for common service levels.
Customer Class Account Characteristics
Usage Total Monthly Wastewater Charges
(hcf/mth) Current Bill FY 25 Proposed Bill Difference
Single Family Residential 5/8” meter 8 $61.24 $66.14 $4.90 Multi-Family Residential: 1-4
attached units*
1 unit in a small multi-unit
complex 4 $44.12 $48.02 $3.90
Multi-Family Residential: 5 or
more attached units**
1 unit in a large multi-unit
complex 4 $44.12 $48.02 $3.90
Commercial 1" Meter 14 $90.46 $93.24 $2.78
ATTACHMENT 2
Proposed
Customer Class Charge Type Current FY25 FY26 FY27 FY28
Single Family Residential
Monthly Base Charge ($/Dwelling Unit) $27.00 $29.90 $32.74 $35.85 $39.26 Usage Charge up to 8 HCF ($/HCF) $4.28 $4.53 $4.96 $5.43 $5.95 Multi-Family Residential
4 or less Dwellings
Monthly Base Charge ($/Dwelling Unit on account) $27.00 $29.90 $32.74 $35.85 $39.26 Usage Charge ($/HCF) $4.28 $4.53 $4.96 $5.43 $5.95
Multi-Family Residential
5+ Dwellings
Monthly Base Charge ($/Dwelling Unit on account) $27.00 $29.90 $32.74 $35.85 $39.26 Usage Charge ($/HCF) $4.28 $4.53 $4.96 $5.43 $5.95
Commercial and Commercial High Strength/Industrial customers are charged a fixed charge dependent on meter size (Tables 2-3), or a volumetric charge dependent on the quantity of water consumed (Table 4), whichever is greater.
TABLE 2— WASTEWATER PROPOSED COMMERCIAL FIXED CHARGES BY METER SIZE 5/8” 3/4” 1” 1 ½” 2” 3” 4” 6” 8” 10”
Current $51.69 $77.54 $90.46 $129.23 $206.76 $387.68 $646.13 $1,292.25 $2,067.60 $2,972.18 FY 2025 $53.28 $79.92 $93.24 $133.20 $213.12 $399.60 $666.00 $1,332.00 $2,131.20 $3,063.60 FY 2026 $58.34 $87.51 $102.10 $145.85 $233.36 $437.55 $729.25 $1,458.50 $2,333.60 $3,354.55 FY 2027 $63.88 $95.82 $111.79 $159.70 $255.52 $479.10 $798.50 $1,597.00 $2,555.20 $3,673.10 FY 2028 $69.95 $104.92 $122.41 $174.87 $279.79 $524.61 $874.36 $1,748.72 $2,797.94 $4,022.04 5/8” 3/4” 1” 1 ½” 2” 3” 4” 6” 8” 10”
Current $59.70 $89.55 $104.48 $149.25 $238.80 $447.75 $746.25 $1,492.50 $2,388.00 $3,432.75 FY 2025 $66.31 $99.47 $116.04 $165.78 $265.24 $497.33 $828.88 $1,657.75 $2,652.40 $3,812.83 FY 2026 $72.61 $108.92 $127.07 $181.53 $290.44 $544.58 $907.63 $1,815.25 $2,904.40 $4,175.08 FY 2027 $79.51 $119.27 $139.14 $198.78 $318.04 $596.33 $993.88 $1,987.75 $3,180.40 $4,571.83 FY 2028 $87.06 $130.59 $152.36 $217.65 $348.24 $652.95 $1,088.25 $2,176.50 $3,482.40 $5,005.95 TABLE 3— WASTEWATER PROPOSED COMMERCIAL HIGH STRENGTH/INDUSTRIAL FIXED CHARGES BY
METER SIZE
Proposed
Customer Class Current FY25 FY26 FY27 FY28
Commercial $5.27 $6.56 $7.18 $7.86 $8.61
Commercial High Strength/Industrial $6.65 $7.23 $7.92 $8.67 $9.49 TABLE 4— WASTEWATER PROPOSED VOLUMETRIC RATES ($/HCF)
***If the City’s Water Resources Laboratory determines that a customer has exceeded the high strength discharge
limit for Biochemical Oxygen (BOD), Total
Suspended Solids (TSS), or Ammonia, a
surcharge will be assessed for each constituent in excess of its relative limit.
TABLE 1— WASTEWATER PROPOSED RESIDENTIAL FIXED & VOLUMETRIC RATES 1 HCF (hundred cubic feet) = 748 gallons. FY = fiscal year July 1—June 30 TABLE 5— WASTEWATER PROPOSED STRENGTH SURCHAGES ($/LB)*** Current FY25 FY26 FY27 FY28
BOD (>750 mg/l) $0.34 $0.30 $0.33 $0.36 $0.39
TSS (>850 mg/l) $0.48 $0.58 $0.64 $0.70 $0.77
Ammonia (>90 mg/l) $1.17 $1.37 $1.50 $1.64 $1.80
How do I protest? If you wish to submit a written protest of any of the above increases, your protest must be received by the City Clerk of the City of Santa Barbara at 735 Anacapa Street, Santa Barbara, CA, 93101, prior to the close of the public hearing on June 25, 2024. Protests must include your name, service address, and whether you are protesting the amount of the fee increase, the basis for calculation of the fee, or both. Written protests may be mailed to or delivered in-person at the address above, or deposited in the bill payment drop box slot located on the exterior of the City Hall building on the De La Guerra Plaza side. Only written protests received before the close of the public hearing on June 25, 2024, will be counted. During the hearing, City Council will consider all protests and public testimony. Protests are public records. One written protest per parcel or service address will be tabulated. If you later challenge the rates in court, you may be limited to the grounds stated in your protest. If you challenge the City's rate setting action in court, you may be limited to the issues and grounds raised in a written protest or in public testimony at the public hearing. There is a 120- day statute of limitation for challenging any new, increased, or extended fee or charge (California Government Code Section 53759).
Date: Tuesday, June 25, 2024, 2:00 p.m.
Place: City of Santa Barbara Council Chambers, City Hall, 735 Anacapa Street, Santa Barbara Meeting details will be posted no less than 72 hours prior to the start of the Public Hearing on the City Council meeting agenda located at SantaBarbaraCA.gov/CAP NOTICE OF PUBLIC HEARING:
PROPOSED CHANGES TO CITY OF SANTA BARBARA WATER RATES
CHECK OUT THE WATER RATE CALCULATOR AT:
www.SantaBarbaraCA.gov/RateCalculator
The average single family home uses 8 HCF per month and would see their water bill increase from $113.76 to $119.41 for FY25, reflecting a difference of $5.65 (or an increase of approximately 5%).
When do the new rates take effect? City Council will consider adopting water rates on July 2, 2024. The new rates will be effective July 2, 2024.
How do I stay informed?
• Watch City Council meetings online at SantaBarbaraCA.gov/CityTV or tune in to City TV Channel 18. • Explore updated information on water rate changes at SantaBarbaraCA.gov/RateChanges. • Contact City staff at (805) 564-5387.
• Attend City Council meetings in person or electronically; visit SantaBarbaraCA.gov/CAP for meeting details.
Please note, the rates included in this Notice are the highest possible rates that could go into effect July 2, 2024.
PROPOSED WATER RATES FOR:
FISCAL YEARS 2025, 2026, 2027, AND 2028
You are receiving this notice because our records indicate that you are a City of Santa Barbara utility customer.
If you are not a City water customer, please disregard this Notice.
This Notice describes proposed changes to water rates and explains how you can participate in the public process. The City’s water rate structure is based on a comprehensive rate study that uses a rate model to evaluate the cost of water service, as required by Article XIII D, Section 6 of the California constitution.
Why are water rates changing?
The proposed water rates will ensure that the City continues to provide safe and reliable water service by funding the ongoing cost of operating and maintaining the City’s water system, including investing in capital infrastructure, meeting water quality standards, servicing debt obligations, and funding reserves.
What goes into a water bill?
Most water bills are made up of two key components: (1) a volumetric charge based on water usage, and (2) a fixed monthly service charge based on meter size. The City’s rate structure limits the amount of revenue recovered from fixed charges, resulting in customers having more control over the total cost of their water bill by reducing water usage. Please refer to the second page of this notice for detailed information on proposed volumetric and fixed monthly charges.
How will the proposed changes impact my water bill?
Customers are encouraged to use the online water rate calculator at SantaBarbaraCA.gov/RateCalculator to see how the new rates could impact their bill. The table below shows sample water bills for single family homes based on various levels of usage and a 5/8” meter for Fiscal Years (FY) 2025 - 2028.
Usage Level Monthly Usage
(HCF) Current Bill Proposed FY25 Bill
Proposed
FY26 Bill
Proposed
FY27 Bill
Proposed
FY28 Bill
Low 4 $53.00 $58.17 $64.25 $70.69 $77.77
Moderate 10 $144.14 $150.03 $165.77 $182.35 $200.59
High 20 $349.44 $381.49 $421.53 $463.69 $510.05
5/8” 3/4” 1” 1 ½” 2” 3” 4” 6” 8” 10”
Current $32.60 $47.73 $77.97 $153.59 $244.33 $531.67 $955.12 $1,968.37 $3,631.93 $5,749.18 Proposed FY25 $36.21 $52.50 $85.09 $166.55 $264.30 $573.86 $1,030.06 $2,121.66 $3,913.84 $6,194.80 FY26 $40.01 $58.01 $94.02 $184.04 $292.05 $634.12 $1,138.22 $2,344.43 $4,324.79 $6,845.25 FY27 $44.01 $63.81 $103.42 $202.44 $321.26 $697.53 $1,252.04 $2,578.87 $4,757.27 $7,529.78 FY28 $48.41 $70.19 $113.76 $222.68 $353.39 $767.28 $1,377.24 $2,836.76 $5,233.00 $8,282.76 TABLE 2—PROPOSED MAXIMUM FIXED MONTHLY SERVICE CHARGES
*What is a Monthly Water Budget? The Monthly Water Budget for irrigation accounts is a calculation of Tier 1 allotment based on the property’s irrigated landscape area and the monthly watering needs of plants.
TABLE 3—PROPOSED MAXIMUM FIXED MONTHLY PRIVATE FIRE SERVICE CHARGES (IF REQUIRED) 1" 1 ½” 2" 4" 6" 8" 10" 12"
Current $3.33 $5.18 $8.37 $39.58 $110.47 $232.76 $416.70 $671.63 Proposed
FY25 $4.67 $6.67 $10.12 $43.86 $120.51 $252.72 $451.58 $727.20 FY26 $5.16 $7.37 $11.18 $48.47 $133.16 $279.26 $499.00 $803.56 FY27 $5.68 $8.11 $12.30 $53.32 $146.48 $307.19 $548.90 $883.92 FY28 $6.25 $8.92 $13.53 $58.65 $161.13 $337.91 $603.79 $972.31 Note: Multi-family auxiliary master meters that serve submeters owned by the City are subject to a monthly operations and maintenance fee not to exceed $123 per month in FY25, escalated annually by the Engineering News-Record Construction Cost Index.
How do I protest? If you wish to submit a written protest of any of the above increases, your protest must be received by the City Clerk of the City of Santa Barbara at 735 Anacapa Street, Santa Barbara, CA, 93101, prior to the close of the public hearing on June 25, 2024. Protests must include your name, service address, and whether you are protesting the amount of the fee increase, the basis for calculation of the fee, or both. Written protests may be mailed to or delivered in-person at the address above, or deposited in the bill payment drop box slot located on the exterior of the City Hall building on the De La Guerra Plaza side. Only written protests received before the close of the public hearing on June 25, 2024, will be counted. During the hearing, City Council will consider all protests and public testimony. Protests are public records. One written protest per parcel or service address will be tabulated. If you later challenge the rates in court, you may be limited to the grounds stated in your protest. If you challenge the City's rate setting action in court, you may be limited to the issues and grounds raised in a written protest or in public testimony at the public hearing. There is a 120-day statute of limitation for challenging any new, increased, or extended fee or charge (California Government Code Section 53759).
Proposed
Customer Class Tiers Current FY25 FY26 FY27 FY28
Single Family Residential
First 4 HCF $5.10 $5.49 $6.06 $6.67 $7.34
Next 12 HCF $15.19 $15.31 $16.92 $18.61 $20.47
All other HCF $28.54 $34.90 $38.56 $42.42 $46.66
Multi-Family Residential
First 4 HCF (per dwelling unit) $5.10 $5.49 $6.06 $6.67 $7.34 Next 4 HCF (per dwelling unit) $15.19 $15.31 $16.92 $18.61 $20.47 All other HCF $28.54 $34.90 $38.56 $42.42 $46.66
Commercial/Industrial 100% of base allotment $7.77 $8.19 $9.05 $9.96 $10.96 All other HCF $28.45 $37.82 $41.80 $45.98 $50.58
Irrigation – Residential &
Commercial
100% of monthly water budget* $15.19 $15.31 $16.92 $18.61 $20.47 All other HCF $28.54 $34.90 $38.56 $42.42 $46.66
Irrigation – Recreation/Parks/
Schools
100% of monthly water budget* $5.98 $7.26 $8.02 $8.82 $9.70 All other HCF $28.54 $34.90 $38.56 $42.42 $46.66
Irrigation – Agriculture 100% of monthly water budget* $3.98 $5.13 $5.67 $6.24 $6.86 All other HCF $28.54 $34.90 $38.56 $42.42 $46.66
Recycled Water All HCF $4.99 $6.10 $6.74 $7.41 $8.15
TABLE 1—PROPOSED MAXIMUM VOLUMETRIC CHARGES
All rates are in $/HCF. (1 HCF [Hundred Cubic Feet] = 748 gallons)
PROPOSED TRASH & RECYCLING
RATE CHANGES FOR FISCAL YEAR 2025
You are receiving this Notice because our records indicate that you are a City of Santa Barbara utility customer. This Notice describes the proposed trash and recycling rate changes, and explains how you can file a protest and participate in the process. Some customers are billed by the City for some, but not all, services. This Notice applies only to the services that appear on your bill from the City.
Trash & Recycling Revenue Requirement Increases
The proposed July 2, 2024 rate schedule increase for all sectors is a total of 1.9%.
Santa Barbara Rate Increases Effective July 2, 2024
Hauler (MarBorg) Compensation 0.0%
Tipping Fee Increase (County) 2.8%
Other City Programs -0.9%
TOTAL Change to Customer Charges 1.9%
How can I lower my trash bill?
In general, some customers may be able to lower their bills by “right-sizing” their service. Customers can make sure that they are diverting lower-cost recyclables from their higher-cost trash containers, increasing recycling service while decreasing trash service, if possible. Many Business and Large Residential (5+ unit) customers are also subscribed to more greenwaste service than they need, especially if they have landscapers that can selfhaul trimmings instead of using greenwaste containers for disposal.
When do the new rates take effect?
City Council will consider adopting these rates on July 2, 2024 (one week after the public hearing). The new rates will be effective starting July 2, 2024.
How do I stay informed?
• Watch City Council meetings live online at SantaBarbaraCA.gov/CityTV or tune in to City TV Channel18. • Attend City Council meetings; visit SantaBarbaraCA.gov/CAP for meeting participation details. • Explore updated information on recycling, waste reduction, and program enhancements at SantaBarbaraCA.gov/Recycling.
NOTICE OF PUBLIC HEARING:
PROPOSED CHANGES TO CITY OF SANTA BARBARA TRASH & RECYCLING RATES Date: Tuesday, June 25, 2024, 2:00 p.m.
Place: City of Santa Barbara Council Chambers, City Hall, 735 Anacapa Street, Santa Barbara Meeting details will be posted no less than 72 hours prior to the start of the Public Hearing on the City Council meeting agenda located at SantaBarbaraCA.gov/CAP How will the proposed changes impact my monthly trash & recycling bill? Representative trash and recycling service levels are demonstrated in the table below.
To preview your July 2024 estimated bill please visit our Trash & Recycling Bill Calculator at SantaBarbaraCA.gov/TrashRates or call City Trash & Recycling at (805) 564-5631.
Customer Profile Representative
Service
Current
Rates
Proposed
Rates % Change
1 Unit
Small Residential 65 gal trash,
65 gal greenwaste,
65 gal recycle,
1x/week
$59.82 $60.60 1.30%
2-4 Unit
Small Residential
(Cart/Can Service)
3-65 gal trash,
95 gal greenwaste,
3-95 gal recycle,
1x/week
$106.06 $107.44 1.30%
5+ Unit
Large Residential
(Cart/Can Service)
5-95 gal trash,
95-gal greenwaste,
5-95 gal recycle,
1x/week
$468.85 $475.36 1.39%
5+ Unit
Large Residential
(Small/Medium Dumpster Service)
4 yard trash,
2 yard recycle,
1x/week
$618.20 $626.80 1.39%
Business
(Cart/Can Service)
3-95 gal trash,
3-95 gal recycle,
2x/week
$621.87 $635.40 2.18%
Business
(Dumpster Service)
4 yard trash,
4 yard recycle,
2x/week
$1,749.26 $1,787.31 2.18%
How can I get more information and copies of the proposed rate schedules? Please visit SantaBarbaraCA.gov/TrashRates or call (805) 564-5631 for trash & recycling questions.
How do I protest? If you wish to submit a written protest of any of the above increases, your protest must be received by the City Clerk of the City of Santa Barbara at 735 Anacapa Street, Santa Barbara, CA, 93101, prior to the close of the public hearing on June 25, 2024. Protests must include your name, service address, and whether you are protesting the amount of the fee increase, the basis for calculation of the fee, or both.
Written protests may be mailed to or delivered in-person at the address above, or deposited in the bill payment drop box slot located on the exterior of the City Hall building on the De La Guerra Plaza side. Only written protests received before the close of the public hearing on June 25, 2024, will be counted. During the hearing, City Council will consider all protests and public testimony. Protests are public records. One written protest per parcel or service address will be tabulated. If you later challenge the rates in court, you may be limited to the grounds stated in your protest. If you challenge the City's rate setting action in court, you may be limited to the issues and grounds raised in a written protest or in public testimony at the public hearing. There is a 120-day statute of limitation for challenging any new, increased, or extended fee or charge (California Government Code Section 53759).
CHECK OUT THE TRASH & RECYCLING RATE CALCULATOR AT: