Agenda packet — Santa Cruz City Council, March 25, 2025 (part 4 of 4)

2. A few pairs of potential uses and/or activities for this site are listed below. Drag the slider bar to indicate your priority between each pair.

Example question:

Park + Plaza
(Farmer's Market)
Housing + Mixed Use
Park + Plaza
(Farmer's Market)
Parking

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3. Please look at the following three options for re-using the site and answer the question that follows:

This option would have a significant plaza and/or park incorporating activities and amentities including the Santa Cruz Farmers' Market with affordable housing along Locust St.

This option would have a significant affordable housing component over ground floor community or commercial space, as well as a plaza that could potentially include the Santa Cruz Farmers' Market.

Park + Plaza
(Farmer's Market)
Parking
Regional Destination
+ Large Events
Downtown + Daily Uses
(Playground, Dog Park, etc.)
Ground Floor
Community Uses
Ground Floor Local Retail
+ Commercial Spaces

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This option would adaptively re-use the existing building frame for community or commercial space with an adjacent, reconfigured midblock parking lot.

Recap:

Plaza + Park with Housing Mixed-Use Housing with Civic Plaza Library Structure Re-purposed with Parking Please rank ALL of the following items in order of importance to you, first being the most important: * Plaza + Park with Housing
Mixed Use Housing with Civic Plaza
Library Structure Re-purposed with Parking

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Number of responses: 610
1 2 3 4 5
Park + Plaza (Farmer's Market) Housing + Mixed Use
0 50
100
150
200
Times Chosen
171 (28.03%)
126 (20.66%)
71 (11.64%)
86 (14.10%)
156 (25.57%)
Number of responses: 564
250
300
264 (46.81%)
Is there anything else you would like to tell us?

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7.7.2 COMMUNITY SURVEY RESPONSES

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Number of responses: 530
1 2 3 4 5
Regional Destination + Large Events Downtown + Daily Uses (Playground, Dog Park, etc.) 0 50
100
150
200
250
Times Chosen
57 (10.75%)
45 (8.49%)
81 (15.28%)
144 (27.17%)
203 (38.30%)
Number of responses: 531
1 2 3 4 5
Ground Floor Community Uses Ground Floor Local Retail + Commercial Spaces 0 25
50 75
100
125
150
175
Times Chosen
161 (30.32%)
115 (21.66%)
99 (18.64%)
81 (15.25%)
75 (14.12%)
1 2 3 4 5
Park + Plaza (Farmer's Market) Housing + Mixed Use
0 Number of responses: 564
1 2 3 4 5
Park + Plaza (Farmer's Market) Parking
0 50
100
150
200
250
300
Times Chosen
264 (46.81%)
155 (27.48%)
77 (13.65%)
33 (5.85%) 35 (6.21%)

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Please rank ALL of the following items in order of importance to you, first being the most important:

Number of responses: 638

1. Mixed Use Housing with Civic Plaza 1236 590

2. Plaza + Park with Housing 1174 573

3. Library Structure Re-purposed with
Parking 900 548
Rank Choice Distribution Score Times Ranked
Lowest Highest
Is there anything else you would like to tell us?
Number of responses: 294
Text answers:

I definitely do not want a building on the farmers market lot. I believe the library can be re-vamped and utilized as best as it can be where it is. I am definitely not in favor of more parking. Community open space we need more
Put the proposed Library Garage to a vote of the people. Restore Trust and transparency in the specific use of funds.

This Community needs functional community meeting space that includes flexibility to adapt to different meeting and gathering formats. The space needs to have up to date catering facilities along with audiovisual technology needed to support community engagement and outreach activities.

I don’t understand the project really. I do like the idea of the area being used for a wider range of things and I don’t really care what, apart from the fact that I do want lose this Library location.

I support updating the library and moving it out of its current site which has many structural problems. I also support developing the Farmers Market Parking lot into mixed use with a more permanent spot for the farmers market
I dont think the current farmers market space should be turned into a library....rebuild the library on its current site and add affordable housing!
I am so glad that this site can be re-used for another purpose. Parking is the killer! So expensive! We should be bold and build affordable housing with zero parking. The Downtown is already protected by a strong parking Not all respondents provided text answers. All unique comments received are displayed below

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Keep library where it is. Keep Farmer's market where it is. Don't cut down the trees. No need for another garage downtown. Build housing elsewhere.

Keep library where it is. Keep Farmer's market where it is. Don't cut down the trees. No need for another garage downtown. Build housing elsewhere.

I would like the city to use its allocated Measure S funds as they were intended to be used by those of us who voted in good faith for Measure S: to renovate the existing library in its present site, following Jayson Architects' plan. This is a more ecologically sensitive solution and a more accurate interpretation of voters' intentions.

Given that the city is building a new garage, I think more surface parking would be an inefficient use of land, is unnecessary, and would not contribute to the community the way that the other proposed features do. Maybe you could look into expanded bike parking/lockers instead. Thanks to staff for your hard work on trying to improve our community.

Keep library where it is
Keep library where it is
Keep library where it is.

Keep library where it is
Keep library where it is
Keep Library where it is
Keep library where it is. Keep Farmer's market where it is. Don't cut down the trees. No need for another garage downtown. Build housing elsewhere.

Keep library where it is. Keep Farmer's market where it is. Don't cut down the trees. No need for another garage downtown. Build housing elsewhere.

Keep library where it is
Keep library where it is
Keep library where it is.

Keep library where it is
Keep library where it is
Keep Library where it is
Don't cut down the trees
Don't cut down the trees and create a park too. We need a green space downtown, Don't let them build a 5/6 story building at the corner of N. Branciforte & Water Don't cut down the trees and create a park too. We need a green space downtown.

Don't cut down the trees and create a park too. We need a green space downtown.

Please don't let them build a 5/6 story building on the corner of N. Branciforte & Water We NEED housing for all workers
Please re-purpose the Library by using Measure S bond funds to renovate the existing Library structure with adjacent parking. Approval by popular mandate of the Measure S bond funds was not a vote to demolish the Library!
SAVE THE TREEEEES!!!!!! Save the historic library site!! DONT ADD DAMAGE to our environment by taking away historic majestic oxygen producing trees . Thank you for making this of UTMOST IMPORTANCE! :) Please use Measure S funds to maintain the library at it's current site! Thank you We don't need the proposed new parking structure where the Farmers market is...

Measure S funds were approved to re-purpose the existing library with adjacent parking. Renovate the existing library using the Jayson Architecture plan. Do not go forward with this overbuild. Trees, open space and a relaxed feel to our downtown is my preference. Already plenty of huge structures are going in to our downtown.

Yes The funds allocated are for redoing the library where it stands please continue to pay attention to what this means. Do not take away the farmers market and build the library there that was not the intention of the vote. That parking lot at a future date should be reconfigured for A farmers market in the Plaza thank you. Your survey did not give this option. It is skewed in the direction of demolishing the library Less parking, more parks!! Thank you :)
Don't cut down the trees
Don't cut down the trees and create a park too. We need a green space downtown, Don't let them build a 5/6 story building at the corner of N. Branciforte & Water Don't cut down the trees and create a park too. We need a green space downtown.

Don't cut down the trees and create a park too. We need a green space downtown.

Yes The funds allocated are for redoing the library where it stands please continue to pay attention to what this means. Do not take away the farmers market and build the library there that was not the intention of the vote. That parking lot at a future date should be reconfigured for A farmers market in the Plaza thank you. Your survey did not give this option. It is skewed in the direction of demolishing the library Less parking, more parks!! Thank you :)
PLEASE DON'T TOUCH THE LIBRARY...THAT BUILDING IS LANDMARK SC...SMALL IMPROVEMENTS LOVE< LIGHT..but..DONT TEAR IT DOWN>>>OR I WILL HAVE TO CHAIN MYSELF TO THE BUILDING >>>THANK YOU>>GOD BLESS SANTA CRUZ>>PEACE

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Don’t tear down the library. Keep the farmers market where it is. Stop wasting money. Don’t give in to the developers. Listen to what the people want.

Please repurpose the Library by using Measure S bond funds to renovate the existing Library and keep it where it is with adjacent parking. We did not vote to move the library to a parking structure! Thank you.

Rebuild the Historical Library where it has been for over 100 years! Build your low Income housing by the river and make the plaza area where the Farmer's market is better with a community space for art and music.. SAVE THE TREES!!! Cherish and protect our Heritage Trees. You say you want to do something for the environment then SAVE THE TREES. We can all park on the outskirts and bike or shuttle to a walking downtown. There is enough parking!
I voted for a renovated library , Yes on S , and then was shocked when the city changed what would happen to the downtown library. Even though moving it and placing a parking garage with it was not mentioned in Measure S, I am amazed that my city feels it is acceptable to do this to it's voters. Many of us will never trust our city when it presents a measure to us because of S being completely changed after we voted. Is this happening with any other of the county libraries that were part of S ? Or is just the city doing this bait and switch ?
Lets continue Our Farmers Market, plus other Community activities---i.e. music and and dance events, plus a Family centered Children's Playground with picnic tables that can be used by farmers market shoppers too.

If any new 2--4 level structures be built, Let them be for LOW income families and single people.....and include a downstairs space
for ChildCare and a community room w laundry facilities.

Renovate the existing Library at this location with short-term and disabled parking.

I do NOT favor using Lot 4 for either a new parking structure or a new library. I would much rather see the existing library modified along the lines of what Jayson Architecture is proposing. When I voted in favor of Measure "S" I certainly did not assume that those funds would be used to re-locate the existing library. If I had known that such re-location would be pursued, I WOULD HAVE voted NO on Measure "S".

Thank you.

We urge you to use Measure S bond funds to renovate the existing Library with adjacent parking following the basic approach of Jason Architecture. Don't waste any more money, consultant fees and staff time on your mixed-use library/parking/faux "affordable housing" plan. Otherwise we will bring it back to the voters, the majority of whom will never support it.

Please re-purpose the Libray by using Measure S bond funds as was voted on to RENOVATE THE EXISTING LIBRARY with adjacent parking. The Jason Architecture plans do the job well! Listen to what the citizens of this town are saying and not the developers. The vote happened and it is your job to respect this.

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I want you to re-purpose the Library by using Measure S bond funds as we voted: to renovate the existing Library with adjacent parking, following the basic approach of Jayson Architecture.

Underground parking is a must.

I've lived in downtown Santa Cruz since 1989. I favor renovation of our current library. I prefer development of a community commons in the area bordered by Lincoln St, Cathcart St. and Cedar St., retaining the Farmers Market at that location. Thank you.

Renovate the existing library. No parking structure or housing or new library at current Farmer’s Market I do not understand at all with all that has been said and done that you are not using measure us funds that I voted for to renovate the existing library and the parking ! I don’t understand how you can decide not to use measure S funds exactly how they were allocated for and voted For! And to try to use the excuse that you asked voters if they’re still for that idea ! shame on you ! Please allow the library remain where it is
Please re-purpose the Library by using Measure S bond funds to renovate the existing Library with adjacent parking.

Not pleased with moving the library from its current location, but since that's already been decided... I strongly wish to see that the new library location is reserved solely for the library and not a mixed-use project.

Save the Farmer's Market! Save the Antique Fair! Save the trees! I see no need for a bigger library. The present library is more than adequate. No more parking meters! Please repurpose the existing library. Use Meas."S" funds to renovate the existing library, and add adjacent parking.

I am not in support of the project and moving the library I would like to see the library revamped keep the farmers market where it is we have enough parking there are too many cars and we need to provide incentive and options for alternative transportation.

I feel this survey is a sneaky but fairly obvious attempt to evade the original question of whether to demolish the current library. Along with many others, I never voted for the library improvement funds to be used to demolish it. Please return to asking for civic input on the various options to remodel the existing library (I favor the Jayson plan).

Really what I would like to see is build a library where the old library is now. Don't build that awful parking structure mixed use thing next to Toadal Fitness.

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Tell the City to re-purpose the Library by using Measure S bond funds to renovate the existing Library with adjacent parking,
Stop putting out dishonest surveys that make it difficult for citizens to oppose the plan to tear down the library.

Cash your paychecks; do less damage to our town.

When I hear plaza, park, playground etc normally I’d get excited. However, given the housing crisis in Santa Cruz, it will 10/10 turn into another area for ppl to sleep and try to live and not be used by community as a whole. I’d prefer to see the area maximized to be used as affordable housing space as a result with less focus on any plaza type area
Affordable house for individuals and families a the lowest income levels is one of the most critical issues facing this area. Re-purposing sites like this for anything that does not address truly affordable housing as a significant part of the development would be, in my opinion, irresponsible. Thank you.

We need affordable housing and that should be the priority in my view.

Affordable housing next to the City Hall signals that the city is actually serious about the housing crisis, and knows that affordable housing in areas with easy walk access to groceries, public transit hub and city services is better than pushing it out to the East side of the city. n/a
No
Don’t ruin this with parking! This is the most walkable part of the city, and it will drive up the cost of affordable housing if you spend money building parking. The city needs housing for people. There’s a multi-story garage nearby.

Think of the local residents being able to afford housing in Santa Cruz instead of having to leave because they can't afford to live here.

Businesses should take a back sit to people.

We already have a parking list that is rarely filled in downtown. There is not a huge parking problem in this area. There is a huge housing problem in the area and that should 100% be the priority in order to continue housing local residents as well as keeping the already existing businesses busy with local buyers.

Affordable Housing is a priority for our community. I believe it can be done in a mixed use format with an acknowledgement of place, respect and voice of the people served, housing elements guidelines, creative and cultural appropriate design and environmental sustainability . 100% "affordable housing" to be the housing component, for extremely low, very low, and low income only with some parking for the housing and park use, with Farmers Market & Park.

Tell the City to re-purpose the Library by using Measure S bond funds to renovate the existing Library with adjacent parking,
Stop putting out dishonest surveys that make it difficult for citizens to oppose the plan to tear down the library.

Cash your paychecks; do less damage to our town.

We need affordable housing and that should be the priority in my view.

Think of the local residents being able to afford housing in Santa Cruz instead of having to leave because they can't afford to live here.

Businesses should take a back sit to people.

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none
The community needs more affordable housing, we are growing, the current generation of home-buyers cannot find affordable housing options. Please consider and prioritize this for us. Our tourism options, retail options, and activity options are great, what we need is more housing.

As much as housing is needed in the community, building affordable housing in the downtown area can also bring forth many other challenges. The downtown area should be directed for business that can create jobs and attract more outside visitors /tourists and increase our local economy.

Housing developments should be built outside the downtown near residential areas of the city and near schools where families thrive.
we should prioritize affordable housing without a doubt. we NEED more affordable housing in this county and this is our chance!
Thanks for asking!
I support housing for homeless even above affordable and very low income housing.

Very low income housing is WAY above parking and plaza. Grassy area WAY above parking!!!! Please do the right thing with the library repurpose with HOUSING for homeless Mixed-use is the best option for the city. It would attract businesses that generate needed tax revenue for the city. It attracts tourists downtown which serves the local businesses who are reliant on their visits and subsequent spending. Additionally, injects need energy and hype that will revive a tired downtown that once was vibrant.

Priorities: As much affordable housing as possible; community spaces; commercial space / any other housing.

We should be prioritizing our housing crisis. In 2018, the United Nations called the Bay Area's treatment of houseless community members a "HUMAN RIGHTS ABUSE", and the situation has only gotten worse.

Supporting the houseless is not only the right thing to do, it will result in a cleaner, safer, more vibrant Santa Cruz.

Senior subsidized housing MUST come first
That we're thinking of adding a new plaza when we already have no solution for homeless people camping wherever is troubling. You can say "oh that'll be illegal" but I have no faith in the City and Police department to enforce any law. Folks running red lights and speeding in neighborhoods, all night UCSC parties in neighborhoods, homeless addicts and those with mental heath issues leaving garbage and stealing...

It's hard to get excited for anything new when we are incapable of effectively running what we currently have.

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Please use measure S funds to rebuild the library on it’s existing site. It is central to the civic center and has enjoyed that location for over 100 years. Lot 4 should be a permanent home to the Farmer’s Market. There is no need to build a massive parking structure and move the library. If you go to Lot 4 any time of day or night, there are many unused parking spaces. Workers and visitors to downtown need transit options, not more automobile infrastructure
It would be great to have some green spaces downtown.

This is a great opportunity to create the largest public gather space downtown to house many events.

Instead of just Affordable Housing the focus should also be on Low Income Housing. Many people in SC are living on poverty wages and need housing more affordable than the "Affordable" designation. Thank you.

I believe an area with more restaurants and outdoor dining would be a great addition to downtown. COVID has led more restaurants to open outdoor dining on the street, but it would be great to have an area that was designed for outdoor use. Abbott Square has been a great example of how desirable an outdoor dining and gathering place is downtown, as has the success of the makeshift outdoor dining spaces restaurants have experimented with over the past several months.

Another option would be to close Pacific avenue to vehicles to create more outdoor dining and gathering space, and using former library location for more housing/repurposing the building. Repurposing the existing building does seem like the most cost effective option and could be very cool if completed as depicted in the image.

Downtown needs a nice open park!
Affordable housing is critical.

Single level street parking lots are a waste of downtown real-estate. hurry up!
While I really like the community center idea, I know I am less likely to use the community center or a plaza unless downtown no longer is the hub and central activity for our homeless population. Because the community spaces have become more dominated by the homeless population, it is less of a space I feel like I can enjoy. That is part of the reason why I voted first for repurposing the current library building. As much as I want the community center 1) the atmosphere downtown would prevent me from utilizing it 2) our money can be spent on solving larger issues than making a pretty place that won't get as much use.

Let's take care of the big things first, then we can get into the details of making Santa Cruz better.

I think it's important to include affordable housing and public open space. Thank you! I would like something done about the rampant drug culture in Santa Cruz.

As a parent, I'm especially sick of the whole "Keep Santa Cruz Weird" nonsense and would like to see a movement toward civility, safe family-friendly access to shopping, theaters and all the amenities that make a downtown great.

Mental illness, homelessness, discarded needles and human feces keep us from feeling safe allowing our teens

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to explore their own beaches, and local community. The police do their best, but we really need to take back our community in order to keep businesses flourishing and give our families a place to be families.

I would love more options for downtown to feel like a destination for families, where you can bring children. A cute playground. A park with a nice grassy patch. This way you can shop, eat and find a spot to hang out with your kids. It would also be great to have nicer public restroom options for this same reason.

Pretty weak survey when all the options sound the same. Can’t even imagine the costs to build housing making financial sense. Why downtown? Do it some place else. We need parking.

We need more very low income housing to reach our state goals.

Affordable housing and a library is the most needed options.

Affordable housing is our greatest, most important need and should be prioritized.

You need to quit doing and asking the same questions over and over. A decision has been made twice on the mult-use new library/affordable housing/parking structure. It's time to follow through and get on with it! I think it would be very useful to include City offices on the ground floor of the mixed use housing. That would strengthen the civic character of Center Street; and connect both sides of the street with public services.

Housing, housing, housing for the homeless, for low-income.

First, central-downtown is not the place to put more housing, whether mixed use or low-income; we do not need more cars and people congesting the area, and this congestion will be significantly worse if Church street gets blocked off. Second, any new parking structure designs should be primarily underground, especially in the case of parking for housing. Third, whatever option is chosen, put more bathrooms than the planners deem necessary; have them for men, women, and gender non-comforming/non-binary people. Lastly, re-using the library building is the best idea and should be the only one considered. This town is so annoying with how it pays developers for unnecessary projects that the community ends up disliking, and there’s already a perfectly good building with a perfectly good and lucrative option for the city to put it to use, with minimal disturbance to the downtown area. There’s no reason it shouldn’t be utilized. If the itch to tear it down and create housing is still present in 10 years, then it can be reconsidered for housing. Right now, we should just do what we can to use the already-existing materials to their fullest extent. Don’t be wasteful of time, community money, and resources.

Affordable housing with services for seniors please
I have talked to many people who would be interested in building an Accessory Dwelling Units (ADUs), both in the incorporated and especially in the unincorporated part of the county. This would help with housing in Santa Cruz county. The problem is the County has made it nearly impossible to do, both from over burdensome regulations and more importantly the costs of fees and permits to do so.

The county should make an effort to reduce both of those burdens, as well as provide assistance in the form of mixed grants and financing so that ADU's could be built.

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Big Yes to apartments for Low income people—-families and singles.

Plus a surrounding park for Farmers Market w children’s playground and picnic tables& benches for tenants and farmers market shoppers ☮ �☮ ��😊😊�
Maximize affordable housing with the lowest qualifying level. We DO need some parking as well.

Lowest possible income 100% affordable housing is the highest priority. We need housing for low-income workers who can afford to both live and work downtown.

New library is VERY important to our communities
Affordable housing is a must!
Keep it as our library - keep it as is! That’s what we voted for when we gave you money to refurbish it - keep the library where it is!
I don’t agree with any of the survey statements, but to get to this point you made me answer them - so sneaky and underhanded!! The whole process of moving the library has been sneaky and underhanded.

Unclear to me whether library is included in these three options. I still want a downtown library in this location.

NOT another commercial development.

Options not clearly presented so results may not be truly relevant.

Don’t build large parking structure
Work towards less cars and more walking and biking downtown I think affordable housing should be the top priority. Many people struggle to afford to live here on wages they make, and having more affordable housing would be good for the community as a whole. Also I think a better place for a farmers market would be to once a week shut Pacific Avenue down and have the farmers market and other vendors, there, just like San Luis Obispo does on Higuera St.

Affordable housing is badly needed, especially for seniors, single young adults, young families, and especially single moms. It would be great to see seniors and single moms live near each other, as some seniors enjoy kids and would love to help out in small ways. outside space to sit and a playground is a must, as is some parking, because public transport does not work for the disabled.

Keeping farmers market is the most important thing to me even though I'm a big library user. Rebuild the library where it is. Parking less important.

Nobody wants to see the library knocked down and having a park next to City hall is going to be a huge mistake of you didn’t already realize.. currently the city of Santa Cruz is ruining the town.. figure it out

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There are too many projects being purposed or approved that are over 4 stories high. The city of Santa Cruz needs to get creative with grants, money from the state or federal government to supplement developer's projects so very low-income and low-income housing can be built without adding a 5th or 6th or higher amount of floors. Hire a city manager who knows how to network. We have high earners in our city who should be contacted for their philanthropic solutions. Bring racial equity to the zoning across all of Santa Cruz. Keep Santa Cruz a place tourists will want to visit. Tourists are trying to get away from towns with 5 and 6 story buildings.

Seriously, the library should stay where it is unless voters tell you they want it to move. Put it up to a vote and you will know the truth.

Don't build the mixed use building on the current Farmers Market site! It isn't the right choice for Santa Cruz.

These other options are poor second choices.

Having space for the Farmer's Market is important. Having open civic space is important. Having affordable housing is important. A plaza would be more attractive than a parking lot.

I would like to see the lot used primarily as green space/park, with possibly a small affordable housing complex, but NO car parking.

We should not have out of area developers running this. Jobs should go to locals.

A Boston company will not understand local issues
More information on each use would have allowed my selections to be more informed. As it was with so little information it felt each choice could be good or poor depending on how it was executed and what the space defaulted to homeless haven where no one else goes or an actual used space. Homeless haven was key reason I said no to a park
Thanks for trying to accommodate all the different points of view I am strongly opposed to tearing down the very attractive ,existing library building. It should be re-purposed into a community center.Louden Nelson Center is totally used and we need more space like that for the citizens of Santa Cruz. Nothing on this site should be for out-of-towners.

If I had known when I voted for the library funds that they would be used for a parking structure/lirbrary/housing development, I would not have voted for them. The library in a parking structure is a huge disappointment to me. But I guess now I will just make the best of it. And I will be more careful in reading measures before I vote for them in the future.

Keep the Library where it is. Renovate the existing structure. Forget about increasing parking. Create a plaza/park and farmer's market where it is currently. Maintain a strict height limit downtown.

Given that the city is already struggling to fill existing commercial space with the pop-up program, additional commercial space is probably not a good idea. Additional parking is also probably not something to shoot for, if

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we want to focus more on walkable and public transit options.

Make the surveys easier to understand. Lol!
We desperately need affordable housing to make our community inclusive, interesting, and vibrant! I would love to see this space transformed into a large, multipurpose, open air plaza like those seen in Italian neighborhoods that are surrounded by shops and cafes with open air dining.

Thank you for asking!
The mini-golf is a waste of space. Repurpose the building. Better yet, scrap all this. We don't need more parking and we don't need more retail space. We like the library. We voted. We don't need housing that will be disguised as "affordable" when it really won't be. The voters voted this down. CC should listen to ALL the voters.

This will not make SC look "Santa Cruzy". It will make us look like every other city that succumbed to big development dollars. We already have downtown community spaces for music, gathering and outdoor sports.

We need to use what we have and not waste tax dollars on things the voters voted down.

My preference would be to keep the building height below 4 stories. Los Gatos (for example) has kept public parking lots away from the downtown area, rather than in the middle of it.

Items 1 and 2 of the options provided are basically the same just have parking area undefined vs defined. In general I do not feel that this survey is very well designed . It seems designed to lead to some preferential conclusion by planners. Surely there must be other activities this large prime location could support. The site should not be used for any parking in my opinion. How about an area like abbot square. Or a large plaza? How about closing off center street for an even larger space connecting to city hall. Let’s think outside the box and find a good fit for OUR community.

I worry about a plaza being taken over by the homeless.

I am very upset that the library is not being rebuilt on the current site and the farmers market area is not turned into a plaza and farmers market we do not need more parking downtown Does the city really need more mixed use projects, given the high commercial vacancy rate. We need housing and civic space.

The parking structure is about the dumbest idea City staff and council have come up with yet. When I voted to fund new libraries I didn't vote for more parking structures. Talk about bait and switch. You should be ashamed. If the parking structure is so badly needed, finance it with revenue bonds based on the need for public parking. Or, better yet, put it to a vote.

I'm sure you will delete my comments for some technical reason, but what it really reflects is the complete lack of integrity in this process.

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I am opposed to the library project. It is not needed.
structure without encouraging loitering by homeless
The Civic Auditorium should be used as the anchor of an expanded vision for the use of this prized civic center space
Would prefer to utilize parking lot 4 for public plaza (save the trees!) and modernize or rebuild library (with affordable housing) in existing location. Does the City of Santa Cruz really need to spend money on more parking spaces? Instead of encouraging people to drive, put that money towards public transit.

Housing of any kind on this property is not sane. First it belongs to the City of Santa Cruz and it should be standalone for the citizens. Housing and low cost housing should not be placed in downtowns highest cost property in the County. The above survey had a trick question by placing housing into the ingredient to prioritize the use. Housing should not be placed in the new proposed library for the very same reason.

Thank you for conducting this survey!
This town does not function. No decision made is final. No self-respecting person would try to run any part of this clown show and no business enterprise would endure the luddite mindset of special interest groups who make fools of themselves, opposing all new ideas. There will be a brain drain in this city in the near future of people who do not need the sturm und drang of aging hippies who have become NIMBYs.

Building a community around affordable housing and public space is most desirable. Commercial business may help prevent the area from becoming another sketchy park in downtown.

Move the library and make the current library location a useful part of the civic center. I could be used for events such as the Greek festival and events at the civic and reduce street closures.

I am not in favor of efforts with housing elements.

This not a good location for housing if the principal purpose is to create a plaza. Presumably it would replace the town clock as a rally zone. In addition the plaza would be a place for mini concerts. The potential noise levels would be unbearable to housing tenants.

We need more social spaces in downtown. For example, Abbott Square is an example of a place where people can gather with their friends. However there should be more security at the new space to keep it safe and open to families. Abbot Square has retail, so perhaps a café and/or a place that sells snacks could be a nice addition…
Keep The existing library - like people overwhelmingly voted for when passing the last library tax measure which was supposed to be for improvements there!

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I am a huge fan public libraries. It's discouraging that the building can't be used in some way; I wish it could have been improved like is happening with the smaller branches. With all the large development going on downtown, open green space is also important rather than just more concrete--parking lots/multi-story structures. Definitely want to see a place for the Farmer's market to continue - since it is only a few hours/once a week event, a way that space could be multi-purposed for other use outside of that time. Would love to see Civic Auditorium refurbished and be part of the plan for what happens contingent to the library parcel.

Big changes altering the character of downtown. So much housing development already in the works - building for whom? seeing the prices skyrocket in our neighborhood with influx of tech professionals from the Bay area who want to live near the beach. What about the low-income Latino population who work in the restaurants, clean the hotels/buildings, landscapers - where are they going to live? How proximate will their housing be to the libraries. Housing affordability is a huge factor in our city. Glad the new library will have affordable housing component. I attended the downtown association presentation on new developments - comment made about parking that once people are living downtown they won't need cars - don't agree with that since we don't have a good public transportation infrastructure like other cities. It wasn't clear to me whether all the developments being built downtown will have adequate parking for residents. Made me wonder about 400 parking spaces in new library development and who will utilize those spaces. Our traffic is already so congested, we're just heading for further increases in that direction. Hoping all these plans and developments are being created in a cohesive way with an eye to what the future of our downtown and our city will be. Thank you for inviting input and your work on behalf of our community.

I stopped visiting downtown Santa Cruz and the library due to the homeless population. I don’t know who will utilize the new library and don’t support putting millions of dollars into it. Last time I was at the downtown library was years ago and a librarian was being loudly cussed out by a scuzzy man who was upset because the librarian evidently told him he couldn’t view inappropriate material on the computers. Maybe there are filters today to restrict that now. I haven’t been back since. Too many creepy incidents there including man urinating outside library in middle of day, weird man following me in library and running gauntlet of panhandling layabouts outside.

I just really hope the farmers market will have a nice permanent location no matter what option is picked.

A park in that space will only benefit the community if the public sense it is a safe and inviting space. Many other nearby parks have mentally ill people sleeping in them throughout the day. For instance, the park by the Mission typically has several of these folks at all times through the day which makes it an uninviting space for the public.
i've always liked the library just how it is. To make more opportunities downtown, build higher for everything, including *affordable* housing, parking, and office space. Seriously, downtown should be at least 5, probably 10 stories everywhere that isn't a cultural landmark, and as close to served exclusively by *quick, efficient* public transportation from remote parking as can be arranged. There is a lot of development south of Laurel that could be accomplished through buying out existing, *personally resident* owners, and buildings that are desperately in need of redevelopment anyway.

There does need to be parking somewhere but I favor a core downtown area that is car free, that makes for a very pleasant shopping experience and has made some downtowns so enjoyable! The last question forces an answer against what we want, which is to upgrade/renovate current library with Measure S funds, and create a downtown commons / farmer’s market on lot 4.

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The library should stay where it is. No more parking!
Unless the housing is specifically earmarked for city employees who work downtown, I don’t believe housing should be considered at this location. Housing yes—in one of the many many other sites, planned and potential, but let this space complete the Civic center, in the wY a library did—public spaces, civic activities, where residents can convene.

Very hard to really see the plans. Want everything to flow and not be separate components in one space. Is the parking fir housing or public parking.

I really like the idea of a market hall with leased vendor spaces. This reminds me of (1) the Santa Cruz County Fair vendors in large buildings at the fair grounds -- festive and fun, and (2) the tents that held downtown businesses after the 1989 earthquake. It also reminds me of the Original Farmer's Market in Los Angeles that I visited many times with my parents in the 1950s. A parking lot would be perfect for a farmer's market along with an adjoining market hall with indoor vendors and food courts. I do not want to see a public park because I worry that it would not be usable for the public and would become a homeless encampment area. The reused old library building and parking lot would be better for night time use than a park.

More apartments that people can afford. Create apartments that are 2-3 bedrooms for families. Have spaces where these occupants can use gym, pool etc. These occupants should have the same access to fun resources as other places do.

This is a sham. Voters like me approved funds for renovating the existing library, not for moving it or using the library as a cover to get passed a contentious parking addition.

Although you did not offer this as an option, I would like to see the current Library refreshed and brought up to code and the "NEW" Library project scrapped.

This should not be a public plaza. The building should be used to house city departments that are renting space in non-city owned buildings. A public plaza does not work in Santa Cruz unfortunately. It is difficult for the city to keep a semblance of behavioral standards or civility in our current public spaces, open spaces or parks. If the building is not used to get city departments out of rented offices, this needs to be developed with a low income housing developer or a private housing developer who can include a significant amount of subsidized housing (much more than 15% affordable units). This should not be public land unless the city plans on hiring security 24/7 or have it gated at night with security during the day.

A concern with parks and/or open spaces is that they don't become another homeless dump with garbage, needles and drug use.
no
More Parking
The library should stay where it is. No more parking!
Unless the housing is specifically earmarked for city employees who work downtown, I don’t believe housing should be considered at this location. Housing yes—in one of the many many other sites, planned and potential, but let this space complete the Civic center, in the wY a library did—public spaces, civic activities, where residents can convene.

Very hard to really see the plans. Want everything to flow and not be separate components in one space. Is the parking fir housing or public parking.

This is a sham. Voters like me approved funds for renovating the existing library, not for moving it or using the library as a cover to get passed a contentious parking addition.

Although you did not offer this as an option, I would like to see the current Library refreshed and brought up to code and the "NEW" Library project scrapped.

A concern with parks and/or open spaces is that they don't become another homeless dump with garbage, needles and drug use.
no
More Parking

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How were these options selected? My first choice is to keep the library where it is. My second is to tear it down and make the whole thing a plaza. Neither were offered as a choice.

Leave library and remold at existing sight....

Please maximize affordable housing units at this site.

No
Repurpose the library the currently exists is really my only choice.

Housing that can be afforded by people working in Santa Cruz (and not drawing big tech salaries) is the number 1 priority
Any incorporation of a plaza or park will need safeguards against it becoming a homeless encampment/gathering place which would cause the housing to become unattractive very quickly Looking forward to the project. I think along whit he other downtown projects for the lower Pacific St. area, it will help improve that area which has become very sketchy.

Estoy totalmente apoyar que nosotros, la comunidad, apoyar el movimiento de que mantenemos la biblioteca donde es, hoy en dia, en la Church St. Creo que ustedes no han sacado la opinion de la mayoria de los Santa Cruzanos. Es muy importante que mantenemos la biblioteca en el mismo sitio donde ha sido por mas que 100 anos y abrirla a city hall para formar un plaza civica. Este mismo encuesta me ha forzado dar respuestas que no quiso dar. Por ejemplo, no quiero ni un parqueo mas, bajo cualquieras circunstancias. Quiero parque en el parqueo 4 y un lugar permanente para el Farmer's Market.

Without active commercial use I fear a park there will become nothing more than another transient gathering spot
Just a quiet place to stop, without feeling like you have to buy something. Perhaps no car traffic across from city hall.

Links to City Hall and the other old outdated buildings in the area - change must happen and it starts with housing
I have always wondered why downtown SC didn’t have more open space like a park or plaza. I would really like to see that!
I think it's important that when the city has land available to use it for affordable housing. I don't think more businesses and retail space will solve our problems and I think we need to shift away from cars and parking as our main form of transportation.

How were these options selected? My first choice is to keep the library where it is. My second is to tear it down and make the whole thing a plaza. Neither were offered as a choice.

Leave library and remold at existing sight....

Please maximize affordable housing units at this site.

No
Repurpose the library the currently exists is really my only choice.

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Is there anything wrong with just upgrading the existing facility and not having the expense of the additional items proposed?
I'd love to see the farmer's market have a new permanent home.

I was thinking a park would be nice but I think it would be overtaken by homeless folks so maybe that isn't a great idea.

Please do not devote this space to “affordable housing”. Please consider the ENTIRE community and make it a space for all, not just a few who get housing through a lottery. This is a great opportunity for the city to have a destination plaza for ALL. Please don’t squander it on housing for a FEW.

This survey is not a survey at all, but rather a manipulative guise to force the public to accept what is not wanted at all. I did not want to rank any of the preferred uses on page 3, but could not get to this page unless I ranked all three, and there is no option to write in what DOES matter to me. Measure S funding should not be used for any of what the City Council and developers have shoved through. Where is my choice to have "None of the Above"? Even a CEQA study includes the option of "No Project".

This survey is false and should be abandoned immediately.

Park and daily Farmers Market sounds good
I question whether any of the existing Library building can be repurposed in a cost-effective manner, but primarily believe the area currently occupied by the Library (and nearest City Hall) would make the best public open space/park. This seems the perfect location for the Farmers Market—in a new open space that's not a parking lot. Also feel that parking isn't necessary on-site.

Had to page through all the pre-answered questions to get to the point: We the people *don't* want this Measure S bait and switch. We do not need to build parking for Barry Sweson's Stack-and-packs, he can pay for his *own* parking garage. Just leave the library alone and refurb as needed.

My name is actually Legion.

The space is too far from Pacific to be a viable retail destination. It would serve the community much better as a Plaza or meeting space. Great spot for the Farmer's Market.

Regarding “affordable housing,” I expect this means it’s affordable to our seniors, very low wage earners, and those of us who work to support our community by working for government agencies, schools, etc. Also with priority being given to people who already reside in the community.

I like the concept of repurposing the existing building, but I'm not in favor of another surface parking lot. I would have ranked that option higher if the parking had been replaced with a plaza/event space. In any scenario, I don't think any portion of this space should be used as for surface parking.

I still favor renovating the current library where it is

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I think the library should be refurbished where it stands and the farmers market should stay where it is.

Instead of building a giant parking structure that benefits the few, we can take that money and invest it into public transit options that would support the many
Less parking and more parks, open space and affordable housing! I’m not really in favor of any portion of the old library space becoming a public park or plaza. The City and County already seem to be stretched to the limit in their ability to maintain park space. There’s not a park in the city limits where I would feel safe or comfortable spending time on my own.

Repurpose reuse recycle up cycle, keep it local, keep the old school SC vibe. Its why people come here and what we locals have always loved!
Prior to COVID, there was demand for office space for Tech jobs in Downtown Santa Cruz. Has anyone spoken to Looker, Amazon or other company for the need for office space to house higher paid jobs in our community? It's a great site for office development.

We need more affordable housing, not more parking, retail and dining! The site use should match the City's most important need- affordable housing No need to do anything until new library open which is about 24-36months away.

Please do not include any surface parking as it wastes valuable space. And please no dog park. Provide as much flexible open park space as possible for all uses such as farmers markets and events, as downtown Santa Cruz lacks a public gathering space. Including mixed use retail and housing around the space is a good idea as it provides "eyes on the street", and housing is much needed.

Because of the high cost of most downtown shops, this doesn't seem to be the best place for low income housing. Santa Cruz has very few public use spaces (Louden Nelson is nearly always booked up) and it would be nice to have more public use space available for rent. Downtown also lacks a park/plaza with greenspace so this also seems like a nice use.

We have been offered a very limited range of choices, and I'm not crazy about any of them. The whole "community commons" thing is simply not realistic. Any plaza or park that does not have regular programmed activities with active supervision and legal authority to regulate activities will become another problem area, making the city complex even more problematical for all kinds of civic and community functions and the surrounding area. The City already cannot adequately maintain and supervise its parks and public spaces. It seems crazy to create even more space in such a multi-use, important center of civic activity with a high likelihood of becoming a financial and social liability. I favor a medium density mixed use project -- city or community uses on the ground floor, housing above, with some parking provided (get real!) I favor the continued practice of street closures for scheduled permitted uses that ensure clear conditions of use -- Greek Festival, Cabrillo Festival and other civic-related functions, graduations, etc. It's essential to maintain circulation and access to the many key city functions in this immediate area, as well as the existing businesses and

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institutions. Scale and intensity of activity should not compromise institutional and residential functions in the immediate area.

Affordable housing should have family sized units (2 bdrm) instead of all studio/1bdrm like has been proposed elsewhere. There should also be adequate off-street parking for those units and charging stations to encourage use of EVs.

Having attended a previous Zoom meeting on this topic, these 3 proposals do not accurately reflect the breakout group ideas. These 3 designs are too limited. What if we don't favor housing on the site at all? And there is no indication of possible height of a housing project there. And would housing really be compatible with the adjacent activities of a plaza, or would the residents complain about noise, etc? Lot 4 is the best lot for a permanent Farmers' Market and town plaza for activities during the rest of the week. If there is no money identified for actively programming a public space (plaza), it will not be a success. The library should be renovated where it is. You could put housing on top of a new library there if you must. That could satisfy a number of needs, while not obliterating Lot 4 with a massive building.

Because of the prime location I believe the largest number of local residents should benefit. That definitely rules out housing. Any re-use of the bldg should be community oriented, for the same reason.

I think the idea of a community gathering space will be great for farmers market, music, festivals, play! For the first floor, I think government offices would work well for our tax base. Additionally, I believe we already have a 'city plaza' incorporated in the city building site across the street I love baby and toddler time at libraries. Libraries are essential to my family. We need affordable housing in Santa Cruz so should be built as tall as possible.

Please build it as tall as possible. If you have to cross subsidize with market rate units to create the most amount of affordable units, please do.

I can envision a really beautiful plaza, with lots of greenery, trees, a park... maybe even a a splash pad style park for the kiddos mixed with local retail and housing. I also envision this gem being well maintained and closed up every night so this space stays in good shape for a long time.

The library building should be re used, but the parking lot should become the community plaza. Why build more parking if the new library structure is providing more parking as a multi story garage? Provide secure bike parking and MORE PUBLIC BATHROOMS, above all else! There is NO WHERE to go to the bathroom downtown which severely limits the amount of time normal people without bladders of steel can stay. Any new downtown development should include safe PUBLIC BATHROOMS!!! Affordable housing should be a priority.

Public funds should not be used to pay for parking spaces. Especially downtown, our public buildings and affordable housing don’t need on-site parking.

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We really cannot keep making concessions to cars. If we want Santa Cruz to become a vibrant, modern city then we need to emphasize bike and public infrastructure. In the ideal future, cars should be banned in most of the downtown core. Why would we want more parking? Parking lots are by far the least enjoyable and worst use of space in a city. More parks, denser living, and human-centric urban design! Please also put focus on making downtown safer. I don’t go down there much since I’ve been harassed by vagrants. Addicts are too welcome and the needle program draws them here.

I vote for one big plaza. Second choice would be plaza and housing. No need for more parking.

I think this site should be developed into something useful, however it should not be developed in isolation. I think there needs to be an overall downtown master plan. For example I would like to see a proper town center, a destination, not a jumble of mismatched developments.

We need open space and public uses on this site. The library should be kept on the site and renovate it.

However, if this is not done,given the lack of open space and public uses space in the downtown core. Site should be used for use as such as farmers market and Civic Plaza for events, not housing, commercial or any other kind of intensive urban development.

N/A
Less parking, more transit.

It doesn’t seem cost effective to repurpose the current building.

Thank you
I am interested in seeing ground floor space used for City offices to centralize the City hub. Then employees and the community can use the plaza together. Also, if employee parking/bike parking could be maximized too that would be great. Thank you for all of your hard work and this opportunity to participate.

Would love to see some civic/social services here extending county building. Also with proximity to civic aud, would be great site for pre event activity. Promote walking and bikes (allowing fire trucks to get down street though :-) ) always, more affordable housing!
Highest and best use of this land is not a parking structure.

Housing is justice issue: we need to increase our housing options in Santa Cruz.

Please build new housing as tall as possible with a large mix of incomes so that it can run revenue positive for the city.

We really cannot keep making concessions to cars. If we want Santa Cruz to become a vibrant, modern city then we need to emphasize bike and public infrastructure. In the ideal future, cars should be banned in most of the downtown core. Why would we want more parking? Parking lots are by far the least enjoyable and worst use of space in a city. More parks, denser living, and human-centric urban design! Please also put focus on making downtown safer. I don’t go down there much since I’ve been harassed by vagrants. Addicts are too welcome and the needle program draws them here.

I vote for one big plaza. Second choice would be plaza and housing. No need for more parking.

We need open space and public uses on this site. The library should be kept on the site and renovate it.

N/A
Less parking, more transit.

It doesn’t seem cost effective to repurpose the current building.

Housing is justice issue: we need to increase our housing options in Santa Cruz.

Please build new housing as tall as possible with a large mix of incomes so that it can run revenue positive for the city.

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district. Also, go big. Tall. There's no reason a five story plus building couldn't work on this site. Our opportunities to add apartments in this town are very limited, given the NIMBY single family neighbors in every direction. So, let's maximize density downtown. I have serious concerns about the homeless and another civic plaza, but I'm sure this can be addressed by good design.

Build a library on top of a parking garage.

Turn Pac Ave into an pedestrian mall.

Yes, I would like to renovate the existing library! I don’t support the idea of building a new library at the farmer’s market. Please use the Measure S bond funds to follow the architectural plans for renovation at the existing site of the library.

We have a lot of vacant retail, no need to ad more
We need more community gathering spaces (Abbott Square Market is well used & we need more spaces like that)
Affordable housing should be part of most projects w/out taking over the project, this is a great opportunity Incorporating some parking would be good but not on a large scale Affordable housing is the most important use for this site! I love the idea of the farmers market here as well.

Thank you for providing this opportunity to make choices. This isn't easy. We can make this work for most everyone.

This site should be used to address the greatest need for people who live and work in Santa Cruz, therefore I feel that affordable housing should be the highest prority for the use of this site.

We need to prioritize building affordable housing
Please “repurpose” the existing library back into a remodeled library.

Use measure s funds to do this.

This survey is terrible because it assumes we are on board with the city's plan to move the library and build a "mixed use" structure. When I voted yes on Measure S, I assumed my financial contribution would go towards rebuilding the library where it is. I feel like I have been hoodwinked.

My problem isn't inherently with building on that parking lot. I mean, I like the Farmers Market, but I am not attached to it being in that one location. My problem is with building a parking structure. We don't need any new parking structures. If you want to use that lot to build 100% affordable housing on top of a library, I would be fine with that. But a parking structure + still mostly market rate housing with some affordable units is not what our city needs.

So I chose the option to "re-purpose the Library" because I want you to use Measure S bond funds to renovate the existing Library with adjacent parking, following the basic approach of Jason Architecture.

Please use the Measure S funds to rebuild the present Library. DO NOT put a library in a parking structure on the site of the current farmers' Market.

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Renovate the old library, don't build a new parking structure and put it inside of it. Put additional parking adjacent to the current library. This (new parking structure and library) is a waste of city funds, and you've wasted enough already.

I want the the city re-purpose the Library at its current site by using Measure S finds to renovate the existing Library withe adjacent parking with the entrance facing City Hall following the basic approach of Jason Architecture. This is what I voted for.

It would be appropriate to follow the original plan that was voted on: to re-purpose the library using Measure S Bond funds to renovate the existing library with adjacent parking. We need to be more conscientious about resources including water and crowding due to traffic.

Repurpose library with existing parking.

I use the library several times a month, please do not discount my vote because I do not live in 95060 zip code.

How dare you continue to ignore a simple fact that we voted Measure S - the 2016 library bond funds are NOT for demolishing the present Downtown Library and putting in a parking garage on Lot 4, site of the Farmers' Market and hacking down 10 Heritage trees.

This survey is using a tactic that the SCCRTC does in regards to the Rail/Trail, ignoring the Greenway proposal in ALL surveys. This survey has NO choice for keeping the Library where it is. The powers that be in the City staff already are asking people about how to "re-use" the present site of the Downtown Library, totally ignoring the will of the voters.

The worst thing about this survey is that it offers us no choice for keeping the Library where it is. Demolishing the Library and displacing the Farmers' Market is not part of the plan.

What I would most like is for the city to re-purpose the Santa Cruz Library. This can be done by using Measure S bond funds to renovate the existing Library with adjacent parking. We don’t need more buildings downtown, nor to increase traffic by inviting more parking or large events.

Dejen la biblioteca en el mismo sitio. Panga ek monado y un parque en el luga - en donde el mercado ya esta.

There is no good reason for building a new library. There are bad reasons, such as city employees would rather spend their time with architects and builders than with the citizenry they work for. Stop this craziness of building a new library. If the existing library has issues then deal with those.

Don't move the library
Don't move the library
Don't move the library
Don't move the library
Protect the trees on Lot 4
Maintain free wi-fi at the library
Free wi-fi at the library
Don't move the library
Please incentivize reduced vehicle parking and add more bike parking and ped/bike lanes around the development.

Keep library where it is using measure S funds and Jason architecture drawings. Could only get to this page for comments through convoluted and confusing pages. Keep this process open to public comment. This is the green alternative.
"Less" is "more". Piling three entities instead of one (library-housing-parking) is not the "more" we citizens voted for in 2016. An
additional burden to tax-payers, the proposed "more" is not compatible with 'GREEN "Santa Cruz ...encouraging more cars downtown instead of walking, biking and public transit. The current building boon downtown is already providing housing for hundreds of people who can easily walk to the library and all amenities. The current library is better served repurposed. The 10 Heritage trees deserve to continue to offer shade in an increasingly warm climate, along with the Farmers' Market, the Antique Fair and festivities. Allow the people friendly ambiance to flourish, assuring downtown continues to be vibrant. The More gives us a "deal" that will cost wasted $$ AND a wasted opportunity to enhance our beloved city now and into the future.

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development.

Answer to this really is impacted by cost
Answer to this really is impacted by cost
Answer to this really is impacted by cost
Answer to this really is impacted by cost
Answer to this really is impacted by cost
Answer to this really is impacted by cost
Answer to this really is impacted by cost

26.95 Brittany Inclan
From: Judi Grunstra <[email protected]>
Sent: Saturday, March 22, 2025 8:07 PM
To: City Council
Subject: Agenda Item 26
Dear Mayor and Council:

So the long-anticipated issue of relocation of the Farmers' Market has finally come before you and the community. As someone who participated in the "re-envisioning" process for the downtown library site, I read the staff report with interest. I also re-read the Visioning Process Final Report.

I was not aware that the city had continued to engage Project for Public Spaces and Group 4 in the interim. I wonder if those meetings were recorded in some way, for transparency.

One question I have is about this: "State grant funding through the Infill and Infrastructure Grant (IIG) awarded to Pacific Station North has been approved for the infrastructure and site improvements in Lot 16 to accommodate the Farmers’ Market and other site activation." This doesn't seem connected to the Pacific Station North project or its location (Lot 16). How can the grant be used for this? Perhaps Council could ask staff about this at Tuesday's meeting.

I was hoping the city (and Farmers Market Board) would consider an "adaptive re-use" project, as many cities are doing, to re-use the library building (or its framework) rather than demolish it, which seems more "sustainable."
In fact, this was mentioned in the Round 1 Stakeholders' Meeting:

To retain the character of the site, community members also saw the potential to adaptively re-use the existing library structure for community or retail uses such as food halls, museums, community centers etc.

The report also notes "Site reuse processes often take many years of consideration and analysis. This was the City’s first structured dialogue regarding the existing Library site." Since new state laws allow for greater building height than anticipated in the Report, there should be a realistic new community discussion about including housing on the site, since such housing could go up to 8 stories (or more?), which would be very much out of character in our "civic center." Also from the Report: "Participants expressed the desire to retain the scale and character of downtown Santa Cruz." I can understand the city's desire for additional office space, given that city departments are scattered through several buildings. Should the Farmers' Market decide upon a permanent home that would include both indoor and outdoor spaces (for vendors, office space, space for food entrepreneurs, a food hall, etc.), perhaps city hall offices could be on the second (or third) floors of such a building, thus retaining the "human scale" of the surrounding buildings.

Therefore you should consider Option 3 - the "No housing" option. Realistically, would housing really be compatible there, given the activities associated with a farmers market, events at the Civic Auditorium, events at a proposed public plaza of some sort, (and what about the Antiques Faire?).

26.96 Also from the Report:

NEXT STEPS
Typically, a site feasibility study will follow the visioning process, and include a greater level of detail regarding site reuse, capacity, and economics. This particular site’s reuse would benefit from a feasibility study that provides more information on the following questions:

Affordable Housing Analysis:
▪ Within the context of downtown and specifically this site, what is the right type of affordable housing? Family, senior, workforce, etc.
▪ What are the appropriate affordability targets?
▪ What are the development economics and what opportunities are there for needed funding? ▪ What types of housing structure(s) provide for the preferred (townhouse, multi-story wood frame, podium, etc.)? How many stories?
Park and Plaza
▪ What uses are most desired?
▪ What hardscape and landscape and site furniture features are most desired ▪ What are the costs of construction, maintenance, and programming, and how will they be funded? ▪ Further analysis of partial/temporary street closures to facilitate farmers market?

Page 20 ends

City, community, stakeholder, and partner engagement
Additional input from elected, and appointed bodies as well as from staff will be necessary to help guide the project and fit it into other City goals, and projects.

Robust community input on the next level of programming and in design will make the project more responsive to, and relevant for, the community at large.

I hope Council will take as much time as needed to evaluate the details of staff's concept and recommendations. Is more parking really needed here as an interim use? (the city's garages have plenty of empty space). Certainly a public restroom is a welcome addition! I wonder if the unit should be larger than one that only accommodates 4 people at a time.

INTERIM FARMERS’ MARKET CONCEPT AND RECOMMENDATIONS The proposed Farmers' Market layout fully activates Lot 16 on Wednesday afternoons and allows for further event activation on non-market days including limited public and potential employee parking along one side of the existing parking lot adjacent to the library. Consideration of both interim use of approximately 3-4 years and the potential for transitioning to permanent use were prioritized to cost efficiently leverage existing resources. As a result, the proposed layout centers the restrooms, utilities and plumbing needed to support site activation by both the Farmers’ Market and other contemplated uses to be concentrated along the eastside of the lot which provides the greatest flexibility for incorporating these improvements into the permanent layout and design of the entire site once

26.97 the downtown library relocates to their new home.... Additional funding is needed to purchase the 4- unit allgender portable restrooms and a multi-purpose stage to fully activate the site.

Thank you for reading my comments.

Judi Grunstra

26.98 Downtown Interim
Farmers’ Market and
Mixed-Use Study Concepts
for Future Permanent
Development
Bonnie Lipscomb
Director of Economic Development and Housing

26.99 1 Project Parameters
2 Interim Market Lot 16 Concept
Permanent Mixed-Use Concepts
Next Steps
3 4

26.100
• Create a dynamic, mixed-use civic
space in downtown that offers a new
type of destination
• Focus on housing and also feature a
mixture of community, civic, and
market amenities
• Inviting space for all, age-friendly
attractions and opportunities to draw
visitors for arts, culture, markets and
community experiences
• Flexible design that can accommodate
programming and activities that can
change by day/time/year
Community Feedback

26.101
Council Direction
• Future re-sue of the existing library site as a mixed-use housing project with an extended public plaza that could serve a a home for the interim and permanent Farmers' Market • Work with SCCFM to refine both the interim and permanent market locations • June 2024- further
refine the overall
project elements
including market
layout

26.102
•••••

26.103
•••••

26.104
AGENDA

1. Project Parameters

2. Interim Market Lot 16 Concept

3. Permanent Mixed-Use Market Concepts

4. Q+A

26.105

26.106

26.107
••••

26.108

26.109
••••

26.110

26.111
••••

26.112

26.113

26.114

26.115

26.116

CONCEPT B - CHURCH AND CEDAR TO NORTHEAST
NOTE: DRAFT ARTIST'S VISUALIZATION FOR REFERENCE ONLY.

BUILDING SCALE AND DESIGN TO BE REFINED IN FUTURE PHASES. -�CITYOP' -
SANTA
CRHl

26.117

26.118

26.119
1) Adopt a resolution appropriating
$250,000 from the Economic
Development Trust Fund to fund
site furnishings to activate Lot 16
for the Farmers’ Market and
$150,000 from the Infill and
Infrastructure Grant approved
budget to fund needed site
infrastructure.
2) Select a preferred option
for further development of
the permanent site
concept for re-use of the
existing library site and
provide additional
feedback or direction on
the future re-use of the site.

26.120

26.121

26.122
Motion To:
1) Adopt a resolution appropriating $250,000 from the Economic Development Trust Fund to fund site furnishings to activate Lot 16 for the Farmers’ Market and $150,000 from the Infill and Infrastructure Grant approved budget to fund needed site infrastructure; and 2) Select Option 2 for re-use of the existing library site with a preference for affordable housing for city employee, seniors, and/or other sub populations identified in need of housing, to the extent legally feasible; and 3) Direct staff to seek developers that will contribute to the development of the public market space.

26.123
City Council

AGENDA REPORT
DATE: 03/06/2025
AGENDA OF: 03/25/2025
DEPARTMENT: Public Works
SUBJECT: User Charges for Wastewater Services – Proposed Five-Year Increase (PW)
LOCATION: Citywide
RECOMMENDATION: Motion to:
1) Set a Public Hearing on the proposed increase of Wastewater User Rates for June 10, 2025; 2) Approve mailing of written notices to Wastewater user customers and property owners regarding the proposed increases and Public Hearing; and 3) Update the Wastewater capacity charges.

BACKGROUND: The City of Santa Cruz’s (City) Wastewater Enterprise Fund exclusively funds all operations, maintenance, and construction needed to operate the City’s wastewater system. The system is comprised of approximately 160 miles of sanitary sewer pipelines within the City, 21 pump stations, an environmental compliance laboratory, and an award-winning regional Wastewater Treatment Facility (WWTF) which on average, treats around 10 million gallons per day. The regional WWTF provides wastewater treatment and disposal via the City’s ocean outfall for the City of Santa Cruz and the Santa Cruz County Sanitation District (including Live Oak, Capitola, Soquel and Aptos). The City’s ocean outfall also provides disposal for the City of Scotts Valley. The City’s WWTF is a regional partner with Soquel Creek Water District providing source water for the District’s Pure Water Soquel Water Purification Center which will recharge the critically over drafted Mid-County Groundwater Basin.

The City has responsibly managed the finances of the Wastewater Enterprise Fund through careful attention to operational costs, strategic investment in technologies and projects to support efficient operations including a renewable energy portfolio that offsets approximately 70% of electricity usage. Finally, to maintain balance with revenues and operating costs and to invest in critical infrastructure, proactive steps have been taken to gradually raise utility rates over the past decade to keep revenues in line with the cost of providing service. The gradual rate increases have enabled the City to maintain strong financial health of the utility and as such the Enterprise has sufficient reserves, coupled with a modest amount of debt service for ongoing capital

27.1 investment. Notably, the City closed on a $26 million 30-year loan in December 2024 to finance the construction of two large capital investment projects.

The last 5-year rate increases were adopted in 2019. Rates increased by 7% for the first three years and by 6% for the last two years. These rate increases were delayed one year due to the COVID-19 pandemic resulting in the last rate increase being implemented July 1, 2024. The City has historically adopted utility rates in five year cycles, the maximum number of years allowed under proposition 218 which governs the rate setting process.

DISCUSSION: In fall 2024, the City contracted with Bartle Wells Associates (BWA) to create a long-range financial plan for the Wastewater Enterprise Fund, including a cost-of-service rate design, development of capacity fees, and the proposed upcoming 5 years of rate increases.

BWA completed work on the study in February 2025 and the final report titled: City of Santa Cruz Wastewater Enterprise Financial Plan and Rate Study Final Report is included for reference. BWA identified a number of financial challenges in upcoming years that can be addressed via gradual annual rate increases.

Key Drivers for Rate Increases:

Capital Improvement Needs & Rehabilitation of Aging Infrastructure:

In 2018, the City completed the Wastewater Treatment Facility Infrastructure and Major Equipment Study which found an increased need for replacement and rehabilitation of aging equipment at the WWTF. Notable projects from the study that are currently in design and construction are the WWTF Electrical project which will replace end of life electrical distribution equipment with an estimated cost of $60 million and the WWTF Headworks project which is in construction with an expected completion date of December 2026 which will cost $19 million. In November of 2024, the City contracted with Brown and Caldwell to prepare a Master Plan for the Wastewater Treatment Facility which will ensure adequate planning for treatment process and permitting requirements.

The City takes a proactive approach to maintaining its wastewater system which requires a steady stream of repair, improvement, and replacement projects. The City has identified approximately $56.4 million of capital improvement projects over the next five years. The City will likely need to use a combination of financial reserves, rate revenue, and debt to fund this level of capital spending.

Ongoing Cost Inflation:

The City’s Wastewater Enterprise faces ongoing operating cost inflation due to annual increases in a range of expenses including staffing, utilities, insurance, supplies, and more. On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with cost inflation and prevent revenues from falling behind the cost of providing service.

Reserves:

Prudent financial management of the Wastewater Enterprise fund includes establishment and maintenance of financial reserve targets. Through this plan and recommended rates, the City will be able to achieve the following financial reserve levels:
1) Six months of operating expenditures
2) One year of Annual Debt service
3) Emergency reserve of $4,000,000

27.2 At the February 24, 2025 Transportation and Public Works Commission meeting, staff provided a presentation on the rate development process, and the recommended rate increases. The Commission unanimously supported a motion that City Council move forward with the proposition 218 process to increase Wastewater rates.

The proposed Wastewater rates for fiscal years 2026-2031 are shown in Table 1 – Proposed Rates Table. Average rate increases over the five-year structure are summarized below, but in more detail in Table 1 per customer classification.

Proposed Wastewater Rates
Effective Date: July 1, 2025 July 1, 2026 July 1, 2027 July 1, 2028 July 1, 2029 Average Rate
Increase:
8% 8% 8% 7% 7%
A survey of comparable agencies and their charges for services is included as Figure 1 – Survey or Monthly Single Family Wastewater Charges.

Process:

In accordance with Proposition 218, the next steps would include approving and mailing the attached 218 notice, receiving written comments on the rates from customers, and conducting a hearing June 10, 2025 with the target of adopting the rates in June and implementing them in July 2025.

In addition to reviewing the City’s current charges for services, BWA reviewed the City’s current capacity fees (cost to connect to the wastewater system, or to upsize a service during redevelopment). As part of that review BWA conducted a survey of the capacity fees of regional and similar agencies, recalculated the current capacity and value of the City’s existing system.

BWA has developed recommended capacity fees that are equitable and simple to administer.

BWA’s capacity fees comply with Government Code Section 66013 (established by AB1600).

Affordability:

On November 19, 2024 the City Council approved the creation of the City’s Utility Customer Assistance Program (UCAP) which will provide ongoing financial support in the form of direct bill assistance to qualified, enrolled low-income program participants. UCAP will be funded using revenues from late payment fees collected from non-program participant utility customers.

UCAP will provide financial support to low-income community members promoting continued access to safe and reliable wastewater collection and treatment to all City customers in a method that is compliant with state law and financially sustainable.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

Increasing wastewater rates is not a project.

HEALTH IN ALL POLICIES (HiAP): This project promotes the following Health in All Policies Conditions: Health and Wellness and Healthy Environments The proposed wastewater rate increase is in alignment with the City’s HiAP initiative by supporting Health and Wellness and Healthy Environments. The City’s wastewater collection system and wastewater treatment facility safeguard public health and environmental health by

27.3 conveying and treating wastewater for ocean discharge in compliance with all regulatory standards and by augmenting water supply by providing a source for recycled water.

FISCAL IMPACT:

1. The recommendation in this report impacts the General Fund: No

2. This recommendation requires a budget adjustment: No

3. The recommendation creates an on-going expenditure commitment: No FISCAL IMPACT DESCRIPTION: The proposed rates are designed to fund operating and capital needs of the wastewater enterprise fund and to equitably allocate costs to all customers.

There is no impact to the General Fund. The wastewater enterprise funds will update revenue assumptions in the FY 2026 budget in the event that rates increases are approved.

Prepared By:

Katie Stewart
Senior Professional Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. TABLE 1 - PROPOSED RATES TABLE.PDF

2. FIGURE 1 - SURVEY OF MONTHLY SINGLE FAMILY WASTEWATER CHARGES.PDF

3. WASTEWATER ENTERPRISE FINANCIAL PLAN AND RATE STUDY.PDF

4. WASTEWATER CAPACITY CHARGE STUDY.PDF

5. PROP 218 PROPOSED WW RATES MAILER 2025.PDF

27.4 Current Projected Wastewater Rates Effective July 1 Rates 2025 2026 2027 2028 2029
Residential
Fixed Monthly Rates (per Dwelling Unit)
Single Family $65.00 $69.74 $75.32 $81.35 $87.04 $93.13 Multi-Family 53.10 57.58 62.19 67.17 71.87 76.90
Low Sewage Producer 38.20 41.94 45.30 48.92 52.34 56.00 Commercial
Fixed Monthly Rates
All Customers Varies $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Low Strength 4.88 5.25 5.67 6.12 6.55 7.01
Medium Strength 4.99 5.79 6.59 7.12 7.62 8.15
High Strength 10.82 12.22 13.61 14.70 15.73 16.83
Industrial & Other
UCSC - Main Campus
Fixed Monthly Rates $66,886.30 $71,471.30 $77,189.00 $83,364.12 $89,199.61 $95,443.58 Quantity Rates ($ per ccf) 10.66 11.58 12.51 13.51 14.46 15.47 Graham Hill WTP
Fixed Monthly Rates 5,511.40 3,150.03 3,402.03 3,674.19 3,931.38 4,206.58 Quantity Rates ($ per ccf) 16.70 19.30 20.84 22.51 24.09 25.78 Landfill Leachate
Fixed Monthly Rates 2,769.40 3,071.12 3,316.81 3,582.15 3,832.90 4,101.20 Quantity Rates ($ per ccf) 8.51 9.09 9.82 10.61 11.35 12.14 Industrial
Fixed Monthly Rates 238.40 252.30 272.48 294.28 314.88 336.92 Quantity Rates ($ per ccf) 6.70 7.25 7.83 8.46 9.05 9.68 Septage
Quantity Rates ($ per ccf) 100.99 109.07 117.80 127.22 136.13 145.66 Note: Initial rate increase effective July 1, 2025 includes modifications to the rate structure that result in a range of bill impacts depending on customer class and billed usage.

27.5 27.6
2025 Wastewater Rate Study February 21, 2025

27.7 27.8
February 21, 2025
City of Santa Cruz, Public Works Department
809 Center St., Rm 201
Santa Cruz, CA 95060

Attention: Kevin Crossley, Assistant Public Works Director / City Engineer

Re: Wastewater Rate Study

Bartle Wells Associates is pleased to submit to the City of Santa Cruz (City) the attached Wastewater Rate Study. The study presents Bartle Wells Associate’s analysis of the operating and non-operating expenses of the City’s wastewater enterprise fund and provides five-year cash flow projections and rates. The primary purpose of this study was to analyze the City’s wastewater enterprise fund and make recommendations that would achieve financial sustainability while improving legal compliance and proportionality.

BWA finds that the rates and charges proposed in our report reflect the cost-of-service for each customer, follow generally accepted rate setting principles, and adhere to the substantive requirements of Proposition 218. The proposed rates incorporate both overall rate increases as well as some modifications to the rate structures designed to improve rate equity and align rates with the cost of providing service.

We have enjoyed working with the City on this rate study and appreciate the assistance of City staff members throughout the project. Please contact us with any future questions about this study and the rate recommendations.

Sincerely,

Erik Helgeson, MBA
Principal/ Vice President
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com

27.9 Bartle Wells Associates
City of Santa Cruz – 2025 Wastewater Rate Study

TABLE OF CONTENTS
1 Executive Summary .................................................................................................... 1

1.1 Introduction .......................................................................................................................... 1

1.2 Key Drivers of Proposed Rate Increases................................................................................ 1

1.3 Wastewater Rate Recommendations ................................................................................... 2

1.4 Regional Wastewater Rate Survey........................................................................................ 4 2 Background & Objectives............................................................................................ 5

2.1 Background and Wastewater System Overview................................................................... 5

2.2 Rate Study Objectives ........................................................................................................... 5 3 Legal Requirements & Rate Methodology................................................................... 6

3.1 Constitutional Rate Requirements........................................................................................ 6

3.2 Wastewater Rate-Setting Methodology ............................................................................... 7 4 Wastewater Financial Projections............................................................................... 9

4.1 Wastewater Financial Plan Overview.................................................................................... 9

4.2 Wastewater Financial Plan Assumptions.............................................................................. 9

4.3 Financial Plan Drivers..........................................................................................................12

4.4 Wastewater Cash Flow Projections.....................................................................................13 5 Cost of Service Analysis & Rate Derivation................................................................ 16

5.1 Wastewater Cost of Service Rate Derivation Process.........................................................16

5.2 Customer Characteristics....................................................................................................17

5.3 Customer Flows and Loadings.............................................................................................18

5.4 Cost of Service Analysis.......................................................................................................21

5.4.1 Cost Allocation Category Rate Revenue Requirements......................................................21

5.4.2 Functional Components......................................................................................................22

5.4.3 Functional Allocation...........................................................................................................23

5.4.4 Functional FY 24/25 Rate Revenue Requirements .............................................................24

5.4.5 Functional Component FY 24/25 Unit Costs.......................................................................24

5.4.6 Rate Revenue Requirements by Customer Class................................................................24

5.5 Rate Derivation....................................................................................................................26

5.5.1 Residential Rate Derivation................................................................................................. 26

5.5.2 Commercial Customer Class Rate Derivation......................................................................27

5.5.3 Industrial/Other Customer Class Rate Derivation...............................................................28

5.6 Proposed Wastewater Rates...............................................................................................29

5.7 Ready to Serve Rates...........................................................................................................30

5.8 Regional Wastewater Rate Survey......................................................................................30 6 Conclusion & Recommendations .............................................................................. 31

27.10 Bartle Wells Associates
City of Santa Cruz – 2025 Wastewater Rate Study
TABLES
Table 1. Current and Proposed Wastewater Rates.............................................................................. 3 Table 2. Revenue Escalation Factors.................................................................................................... 9 Table 3. Cost Escalation Factors.........................................................................................................10 Table 4. Recommended Financial Reserves.......................................................................................11 Table 5. Capital Funding Sources .......................................................................................................12 Table 6. Detailed Cash Flow Projections............................................................................................14 Table 7. Customer Counts by Class....................................................................................................17 Table 8. Nonresidential Customer Flows...........................................................................................18 Table 9. Wastewater Flows................................................................................................................19 Table 10. Wastewater Strength and Loadings...................................................................................20 Table 11. Rate Revenue Requirements by Cost Allocation Category ................................................22 Table 12. Rate Revenue Requirements by Functional Components..................................................23 Table 13. FY 24/25 Functional Rate Revenue Requirements.............................................................24 Table 14. FY 24/25 Functional Component Unit Costs ......................................................................24 Table 15. Functional Allocation Units by Class...................................................................................24 Table 16. Total Functional Rate Revenue Requirements by Class.....................................................25 Table 17. Adjusted Rate Revenue Requirements by Class................................................................. 25 Table 18. Residential Rate Derivation ................................................................................................26 Table 19. Commercial Rate Derivation...............................................................................................28 Table 20. Industrial/Other Customer Class Rate Derivation..............................................................28 Table 21. Recommended Wastewater Rates.....................................................................................29 Table 22. Ready to Serve Rates..........................................................................................................30

FIGURES
Figure 1: Regional Wastewater Rate Survey........................................................................................ 4 Figure 2: Cost-of-Service Rate Setting Methodology........................................................................... 8 Figure 3: Wastewater Projected Cashflow Graph..............................................................................15 Figure 4: Wastewater Cost of Service Analysis and Rate Derivation Process....................................16 Figure 5: Regional Single Family Residential Wastewater Rate Survey .............................................30 Appendix A - Wastewater Financial Plan and Rate Study Tables

27.11 Bartle Wells Associates
City of Santa Cruz – 2025 Wastewater Rate Study

GLOSSARY OF TERMS
Terms Descriptions
AWWA American Water Works Association
BWA Bartle Wells Associates
CCF One hundred Cubic Feet
CIP Capital Improvement Projects
City The City of Santa Cruz
COS Cost of Service
Cost Allocation Apportioning expenses to utility user fees and rates in order to charge customers proportionally to the level of benefit they receive
CPI Consumer Price Index/Indices
Enterprise Fund Funds are established to account for governmental activities that provide goods or services primarily to the public at large on a consumer fee basis Fixed Charges A charge that is held constant over a period of time and applied at even intervals FYE Fiscal Year End (June 30)
General Fund The main operating fund for the City
M1 Manual “Principles of Water Rates, Fees, and Charges: Manual of Water Supply Practices M1", 6th edition published by AWWA
Meter Equivalent
Ratios
The ratio of a water meter's maximum safe flow in comparison to a smaller water meter
Multi-family Utility customers meeting the criteria of the multi-family class O&M Operations and maintenance
Prop. 218 Proposition 218, Added Articles 13C & 13D to the California Constitution R&R Repair and Replacement
Rate Setting Period Limited to five (5) years under Prop. 218.

Revenue
Requirements
The amount of future funding which needs to be recovered from an enterprise's user fees/rates
Solvent Able to pay long-term debts and other financial obligations Volumetric Rates Utility rate based on a metered volume of water

27.12 Bartle Wells Associates Page | 1
City of Santa Cruz – 2025 Wastewater Rate Study
1 EXECUTIVE SUMMARY

1.1 Introduction
The City of Santa Cruz (City) wastewater utility is a financially self-supporting enterprise that relies primarily on revenues from service charges to fund the costs of providing service. As such, the City’s rates need to be set at adequate levels to a) fund the costs of operating and maintaining the wastewater system, b) fund necessary capital improvements to keep the City’s infrastructure in good operating condition, and c) meet annual debt service funding requirements. The City has provided proactive financial stewardship by gradually raising rates over the past decade to keep revenues in line with the cost of providing service. The gradual rate increases have enabled the City to maintain the financial health of the utility.

In 2024, the City retained Bartle Wells Associates to develop long-term financial plans and rate studies for the City’s wastewater enterprise to determine recovery of costs for providing wastewater utility services. Proposed rates are designed to fund the operating and capital needs of the City’s utilities and equitably recover costs from all customers. Final recommendations incorporate input from City Staff.

1.2 Key Drivers of Proposed Rate Increases
The City’s wastewater utility faces a number of financial challenges in upcoming years that can be addressed via gradual annual rate increases. These financial challenges include:

Capital Improvement Needs & Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its wastewater system which requires a steady stream of repair, improvement, and replacement projects. The City has identified approximately $56.4 million of capital improvement projects over the next 5 years. The City will likely need to use a combination of financial reserves, rate revenue, and debt to fund this level of capital spending.

27.13 Bartle Wells Associates Page | 2
City of Santa Cruz – 2025 Wastewater Rate Study

1.3 Wastewater Rate Recommendations
Updated financial projections for the wastewater enterprise indicate the need for annual wastewater revenue increases over the next five years. With the recommended rate increases, the City will be able to fund the capital projects necessary to continue providing a high level of wastewater service, pay for rising operating costs, and maintain the financial health of the enterprise.

BWA reviewed the City’s current wastewater rates and has the following recommendations to align rates with the current cost of providing service and improve compliance with the requirements of Proposition 218:
• Update the fixed and variable rates to proportionally reflect the cost-of-service analysis in this report.
• Consolidate hotels/motels and interdepartmental customers into the low, medium, and high strength customer categories as appropriate, based on class/customer characteristics. This recommendation is made because these classes lack substantive differentiation from the low, medium, and high strength classes.

Due to the cost-of-service analysis and structure adjustments, there will be some variation to the impacts to each customer class in the first year of the recommended rates, effective July 1, 2025.

The remaining four years of the recommended wastewater rate increases, starting July 1, 2026, are applied on an across‐the‐board basis with the same percentage increase to all charges.

The following table shows a schedule of proposed wastewater rates for the next five years.

27.14 Bartle Wells Associates Page | 3
City of Santa Cruz – 2025 Wastewater Rate Study
Table 1. Current and Proposed Wastewater Rates
Note: Initial rate increase effective July 1, 2025 include modifications to the rate structure that result in a range of bill impacts depending on customer class and usage.

Current Projected Wastewater Rates Effective July 1
Rates 2025 2026 2027 2028 2029
Residential
Fixed Monthly Rates (per Dwelling Unit)
Single Family $65.00 $69.74 $75.32 $81.35 $87.04 $93.13 Multi-Family 53.10 57.58 62.19 67.17 71.87 76.90
Low Sewage Producer 38.20 41.94 45.30 48.92 52.34 56.00 Commercial
Fixed Monthly Rates
All Customers Varies $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Low Strength 4.88 5.25 5.67 6.12 6.55 7.01
Medium Strength 4.99 5.79 6.59 7.12 7.62 8.15
High Strength 10.82 12.22 13.61 14.70 15.73 16.83
Industrial & Other
UCSC - Main Campus
Fixed Monthly Rates $66,886.30 $71,471.30 $77,189.00 $83,364.12 $89,199.61 $95,443.58 Quantity Rates ($ per ccf) 10.66 11.58 12.51 13.51 14.46 15.47 Graham Hill WTP
Fixed Monthly Rates 5,511.40 3,150.03 3,402.03 3,674.19 3,931.38 4,206.58 Quantity Rates ($ per ccf) 16.70 19.30 20.84 22.51 24.09 25.78 Landfill Leachate
Fixed Monthly Rates 2,769.40 3,071.12 3,316.81 3,582.15 3,832.90 4,101.20 Quantity Rates ($ per ccf) 8.51 9.09 9.82 10.61 11.35 12.14 Industrial
Fixed Monthly Rates 238.40 252.30 272.48 294.28 314.88 336.92 Quantity Rates ($ per ccf) 6.70 7.25 7.83 8.46 9.05 9.68 Septage
Quantity Rates ($ per ccf) 100.99 109.07 117.80 127.22 136.13 145.66

27.15 Bartle Wells Associates Page | 4
City of Santa Cruz – 2025 Wastewater Rate Study

1.4 Regional Wastewater Rate Survey
The following chart compares the wastewater bills for a typical single-family home to those of other regional agencies. The City’s wastewater rates are at the lower end of the range of coastal wastewater agencies. Many of these agencies are facing similar financial pressures and are either in the middle of multi-year rate increases or are anticipating raising rates in upcoming years.

Figure 1: Regional Wastewater Rate Survey

27.16 Bartle Wells Associates Page | 5
City of Santa Cruz – 2025 Wastewater Rate Study
2 BACKGROUND & OBJECTIVES

2.1 Background and Wastewater System Overview
The City of Santa Cruz (City) wastewater system includes 21 pump stations and includes over 160 miles of sewer pipe and a wastewater treatment facility (WWTF). The treatment facility treats more than 10 million gallons of wastewater each day, with approximately half of the waste generated within City limits and the other half generated by the Santa Cruz County and Sanitation District (SCCSD). The SCCSD is responsible for paying for their proportional share of operations and maintenance costs of the wastewater treatment facility.

On an annual basis, the City typically replaces 2,500 linear feet of deteriorated and undersized pipelines. Significant improvements to the wastewater system in recent years include the completion of 50 kilowatt photovoltaic system and integration of the 1.3 megawatt cogeneration system into the facility power grid. The City has been recognized on multiple occasions for its commitment to provide quality of life services to the community by maintaining outstanding wastewater maintenance procedures while helping to reduce the City’s carbon footprint and protect the environment.

The City’s utilities operate as self-supporting enterprise funds. Revenues are derived primarily from service charges. As such, the City must establish rates and charges adequate to fund the costs of providing service, including costs for ongoing operations, debt service, and capital improvements needed to keep the City’s aging utility infrastructure in safe and reliable operating condition.

2.2 Rate Study Objectives
In 2024, the City retained Bartle Wells Associates to develop a long-term financial plan and rate study for the City’s wastewater enterprise to determine recovery of costs for providing wastewater utility services. Key goals and objectives of this study include developing wastewater rates that:
• Recover the costs of providing service, including operating, capital, and debt funding needs; • Are fair and equitable to all customers;
• Are easy to understand and implement;
• Comply with the substantive requirements of the California Constitution, Article 13D, Section 6 (which was adopted by the voters as Proposition 218 in 1996) and the general mandate of Article 10, Section 2 that prohibits the wasteful use of water; • Support the City’s long-term operational and financial stability.

BWA worked closely with City staff to gather information and input, evaluate alternatives, and develop recommendations. This report summarizes key findings and recommendations for overall rate revenue increases over the next five years. The full set of tables are included in the appendix to this report.

27.17 Bartle Wells Associates Page | 6
City of Santa Cruz – 2025 Wastewater Rate Study
3 LEGAL REQUIREMENTS & RATE METHODOLOGY

3.1 Constitutional Rate Requirements
The California Constitution includes two key articles that directly govern or impact the City’s wastewater rates: Article 10 and Article 13D. In accordance with California constitutional provisions, the proposed rates are designed to a) recover the City’s cost of providing service, b) recover revenues in proportion to the cost for serving each customer, and c) promote conservation and discourage waste.

Article 13D, Section 6
Proposition 218 was adopted by California voters in 1996 and added Articles 13C and 13D to the California Constitution. Article 13D, Section 6 governs property-related charges, which the California Supreme Court subsequently ruled includes ongoing utility system charges such as water, wastewater, and garbage service rates. Article 13D, Section 6 establishes a) procedural requirements for imposing or increasing property-related charges, and b) substantive requirements for those charges. Article 13D also requires voter approval for new or increased property-related charges but exempts rates for water, wastewater, and garbage services from this voting requirement if the rates are adopted by the appropriate procedure and meet the substantive requirements of Proposition 218.

The substantive requirements of Article 13D, Section 6 require the City’s wastewater rates to meet the following conditions:
1) Revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service.
2) Revenues derived from the fee or charge shall not be used for any purpose other than that for which the fee or charge was imposed.
3) The amount of a fee or charge imposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the service attributable to the parcel. 4) No fee or charge may be imposed for a service unless that service is used by, or immediately available to, the owner of the property in question.
5) No fee or charge may be imposed for general governmental services, such as police or fire services, where the service is available to the public at large in substantially the same manner as it is to property owners.

Statute of Limitations
Pursuant to California Government Code 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fees. This statute of limitations applies to the wastewater rates proposed in this rate study and is included in the Proposition 218 Notice.

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3.2 Wastewater Rate-Setting Methodology
The California Constitution does not give agencies leeway to arbitrarily set rates purely based on policy preferences. Instead, it provides agencies with flexibility to implement rates within a framework established by Articles 10 and 13D. Together, these Articles establish that rates should both a) discourage waste and encourage conservation of water, and b) not exceed the costs of service attributable to each parcel or customer.

Wastewater utilities have used a wide range of approaches or perspectives for allocating and recovering their costs for providing service, and these costs are most commonly recovered from a combination of fixed and variable charges. The percentage of revenues derived from the fixed and variable charges varies for each agency. They should be proportional to each system’s expenditures and must not exceed the cost of providing service. A higher level of fixed charges provides better revenue stability and less dependence on variable sales. On the other hand, higher dependence on volumetric revenues provides a greater conservation incentive.

Depending on perspective, the same costs can reasonably be allocated 100 percent to fixed revenue recovery, 100 percent to variable rate recovery, or to some combination of the two. For example, debt service used to fund wastewater treatment facilities can legitimately be treated as a) a fixed annual cost that should be recovered from fixed charges, b) a cost related to meeting customer demand and therefore a cost that should be recovered from variable rates, or c) a cost that can be recovered from both fixed and variable rates in recognition of the two alternative perspectives.

Many of the utility’s costs are variable costs that vary by the size of the system including personnel, supplies, and utilities. However, a portion of these variable costs can reasonably be apportioned to fixed rate recovery, and vice versa with fixed costs. For example, a share of the fixed cost of salaries related to treatment plant operations can reasonably be recovered from usage-based charges as these costs are incurred to meet demand flows. For debt service, payments may be fixed annual costs but it is reasonable to recover some of these costs from usage-based rates as the costs are incurred to fund infrastructure that will improve the wastewater system. Ultimately, there is no single correct way to allocate or attribute costs. Hence, five similar agencies may have five different rate structures provided each agency can establish a reasonable cost basis for their own particular rate structure within the parameters of meeting the various requirements of the California Constitution.

While there is no single correct approach, BWA believes that costs should be allocated within a reasonable range of fixed and variable allocation that reflects both a) underlying cost causation, to the extent such causation can reasonably be determined or estimated, and b) the policy preferences of the agency in cases where a range of reasonable approaches can be justified.

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Revenue Requirements
Determine future
funding requirements
from rates
Cost Allocation
Equitably apportion
costs to rate
components
Rate Design
Develop rates that
recover revenues in
proportion to the cost
of providing service
BWA uses a straightforward methodology to establish equitable charges that recover the cost of providing service and fairly apportion costs. The general methodology is summarized in the following figure.

Figure 2: Cost-of-Service Rate Setting Methodology
Key elements of this study include:
• Project Initiation and Data Collection – Review financial policies; collect financial and other relevant data; and review rate structures;
• Demand Analysis – Analyze past customer demands and customer characteristics to forecast future demands;
• Long Range Financial Plans – Develop financial projections to evaluate annual revenue requirements from rates and the overall level of rate increases needed to fund the costs of providing service and support long term financial stability; • Cost Allocation – Group the City’s costs in terms of the function they serve as a basis to proportionally allocate the revenue requirement from rates; • Cost-of-Service Rate Design – Develop rates that proportionately recover costs; and • Prop 218 Process – Ensure compliance with the substantive and procedural requirements of Proposition 218.

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4 WASTEWATER FINANCIAL PROJECTIONS

4.1 Wastewater Financial Plan Overview
Bartle Wells Associates conducted an independent evaluation of the wastewater enterprise finances. Key observations include:
• The enterprise is in overall good financial health but will need rate increases to keep revenues in line with rising costs and fund needed capital improvements. • The City projects capital expenses of $56.4 million from FY 25/26 through FY 29/30. • Average wastewater operating expenses from FY 25/26 through FY 29/30 are projected to be $28.7 million per year.

BWA developed long-term cash flow projections to determine the wastewater enterprise’s annual revenue requirements and project required wastewater rate revenue increases. The financial projections incorporate the latest information available as well as a number of reasonable and slightly conservative assumptions developed with input from the City.

4.2 Wastewater Financial Plan Assumptions
Revenue Escalation Factors
The following table details the revenue escalation factors used to develop the long‐term cash flow projections. Escalation factors are based on input from City Staff, historical escalations, and conservative projections for future escalations to reasonably ensure that the maximum rates adopted by the City will provide sufficient revenues to support the City’s wastewater operations.

Table 2. Revenue Escalation Factors
Revenue Escalation Factors FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Operating Costs 8.1% 5.9% 4.9% 4.6% 4.6%
Growth 1.0% 1.0% 1.0% 1.0% 1.0%
Interest on Reserves 2.5% 2.5% 2.5% 2.5% 2.5%
Revenue Assumptions
• The wastewater enterprise is projected to begin FY 25/26 with about $26.5 million in reserves. • Projected customer growth is based on a conservative estimate of new customer connections to ensure rate revenue is sufficient to support wastewater operations. Most of the projected growth is coming from new planned multifamily housing units. • BWA did not escalate revenues for connection charges or other miscellaneous non-rate revenues in its projections. Recommended rates are the maximum rates the City can adopt, which is why BWA uses conservative estimates when making revenue projections.

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• The City of Santa Cruz is responsible for the wastewater system in its entirety. SCCSD is only responsible for paying for their proportional share of costs for the WWTF. Operating cost revenues are for reimbursements allowed under the Joint Wastewater Treatment and Disposal Agreement between Santa Cruz County and Sanitation District (SCCSD) and the City of Santa Cruz. These revenues are roughly 29% of annual O&M as of the date of this report and are directly tied to operating and maintenance costs incurred. This means that the revenues from reimbursements are expected to increase as operating costs increase, and decrease if operating costs decrease.
• Interest income is estimated based on projected reserve levels. Future projections are estimated based on a conservative interest earning estimate of 2.5%. Actual interest amounts will vary based on reserves and future interest earning rates.
• Rate adjustments are assumed to become effective July 1 of each year.

Cost Escalation Factors
The following table details the cost escalation factors used to develop long‐term cash flow projections. Escalation factors are based on input from City Staff, historical escalations, and conservative projections for future escalations to reasonably ensure that the maximum rates adopted by the City will provide sufficient revenues to support the City’s wastewater operations.

Table 3. Cost Escalation Factors
Cost Escalation Factors FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 General Inflation Factor 4.0% 4.0% 4.0% 4.0% 4.0%
Personnel Services 11.0% 7.0% 5.0% 5.0% 5.0%
Professional Services 5.5% 4.0% 4.0% 4.0% 4.0%
Operating Supplies 6.5% 6.5% 6.5% 4.5% 4.5%
Capital Costs 4.0% 4.0% 4.0% 4.0% 4.0%
Expense Assumptions
• Operating and maintenance costs are based on the FY 24/25 adopted budget and include updated estimates developed with the help of City Staff. • General operating and capital cost inflation is projected to escalate at an annual rate of 4%. This is a conservative estimated based on recent and historic inflation. • Operating Supply increases are partially driven by increases in chemical costs. Chemical costs have risen dramatically in recent years and the City projects chemical costs to increase at an annual rate of 10% for three more years. This report projects that the current and high inflation level will gradually drop back towards general inflation trends. • Personnel Services costs are increasing due to an adjustment in cost allocation methodology for central services provided to the wastewater enterprise and salary increase projections. The City is projecting an initial increase to the wastewater enterprise’s proportional share of central services for FY 25/26, allocation for future years is anticipated to drop back towards general

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inflation trends. The City projects the cost of salaries and benefits to increase at an annual rate of 5% based on projected future cost of living adjustments and projected inflation of specific benefit expenses such as health insurance.
• Joint capital projects receive reimbursement under the Joint Wastewater Treatment and Disposal Agreement between Santa Cruz County and Sanitation District and the City of Santa Cruz at an 8/17 ratio of project costs.
• Debt service projections are based on outstanding debt schedules and projected issuances of new debt. The financial plan assumes the issuance of a $36.0 million bond in FY 2028/29 to fund the wastewater treatment facility electrical upgrade project.

Fund Reserves
BWA recommends the City maintain prudent fund reserves. Fund reserves will fluctuate based on the timing of revenues and expenses, but the proposed rates are projected to provide the wastewater enterprise sufficient fund reserves. BWA reviewed the City’s reserve policy and recommends the wastewater enterprise aim to meet or exceed the reserve level criteria shown in the following table. The emergency fund reserve level should be periodically adjusted for inflation and risk levels.

Table 4. Recommended Fund Reserves
Reserve
Description
Recommended
Minimum Balance Purpose
Operations &
Maintenance
Six Months of Operating
Expenditures
Cash flow and liquidity in case of revenue
loss/interruption
Debt Service One Year Annual Debt
Service To meet debt service coverage ratios
Emergency $4,000,000 Additional funds available in an unforeseen catastrophic event or emergencies

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4.3 Financial Plan Drivers
The City is anticipating a number of manageable financial challenges that will require gradual rate increases in upcoming years. Key drivers of future rate increases are summarized below.

Ongoing Cost Inflation
The City’s wastewater enterprise faces ongoing operating cost inflation due to annual increases in a range of expenses including staffing, utilities, insurance, supplies, etc. On top of rate increases needed for other purposes, annual rate increases are needed to keep revenues aligned with cost inflation and prevent rates from falling behind the cost of providing service. Historically, inflation consistently hovered between 2% and 3%. Currently, inflation has mostly normalized after fortyyear highs, but remains near 3%. Given the recent volatility, BWA designed the inflation projections to be slightly conservative to leave the City in a strong financial position while not driving excessive rate increases.

Capital Improvement Needs & Rehabilitation of Aging Infrastructure The City takes a proactive approach to maintaining its wastewater system which requires a steady stream of repair, improvement, and replacement projects. Accounting for construction cost inflation, the City has identified approximately $56.4 million of capital improvement projects over the next 5 years. SCCSD will participate in projects for the wastewater treatment plant (WWTF) and is expected to fund an additional $29.9 million of capital costs.

The largest upcoming capital project is the wastewater treatment facility electrical upgrade project.

SCCSD will provide 8/17 of the funding. This study assumes the City will finance its share of project costs by issuing a $36.0 million bond in FY 2028/29. With the recommended rate increases, the City has the capacity to secure the entirety of the funding and be reimbursed for the annual debt service by SCCSD. However, this is not recommended as it will limit the City’s capacity to secure future financing for other wastewater projects.

The following tables shows the projected capital funding sources for the next five years.

Table 5. Capital Funding Sources
Capital Funding FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Projected Projected Projected Projected Projected
Total Capital Expenditures $18,021,120 $10,194,080 $7,789,683 $24,596,276 $25,732,209 Capital Funding $18,021,120 $10,194,080 $7,789,683 $24,596,276 $25,732,209 Use of New Debt Proceeds 12,000,000 0 0 8,000,000 8,000,000 County WWTP Participation $2,581,647 $3,321,148 $2,527,636 $10,638,831 $10,906,935 ________ ________ ________ ________ ________ Cash Funded Capital $3,439,473 $6,872,932 $5,262,048 $5,957,445 $6,825,273

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4.4 Wastewater Cash Flow Projections
Long-term cash-flow projections were developed based on the assumptions and key drivers of future rate increases described above. The projections were used to determine the wastewater utility’s annual revenue requirements and project required wastewater rate revenue increases. The long-term cash-flow projections incorporate the latest information available from the City’s budget, annual reports, capital spending projections, metered water demand data, as well as a number of reasonable assumptions developed with input from the City. The overall rate revenue increases are designed to fund the City’s cost of providing service, maintain roughly balanced budgets, maintain healthy debt service coverage, and maintain prudent reserves. The projections indicate the need for rate increases. Actual impacts to customers wastewater bills will vary based on strength category and water use, due to the outcome of the updated cost-of-service analysis.

In future years, the City can re-evaluate its finances and revenue requirements and adjust rates as needed based on updated projections. However, while the City always has the flexibility to implement rate adjustments that are lower than adopted, pursuant to Proposition 218, future rates cannot exceed adopted increases without going through the Proposition 218 process again.

The rate projections shown on the following table are designed to fund the City’s operating and capital costs while maintaining prudent reserves.

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Table 6. Wastewater Cash Flow Projections
Wastewater Cashflow FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Actual Est. Budget Projected Projected Projected Projected Projected Projected Revenue Growth 1.0% 1.0% 1.0% 1.0% 1.0%
Rate Revenue Increases 8.0% 8.0% 8.0% 7.0% 7.0%
Beginning Reserve Balance 23,188,000 25,922,000 26,549,000 27,559,000 26,221,000 27,875,000 28,992,000 Revenues
Rate Revenue
Total Rate Revenue 19,852,000 21,004,000 22,911,000 24,991,000 27,260,000 29,460,000 31,837,000 Non-Rate Revenue
Sewer Service Charges - County 5,080,000 6,880,000 7,439,000 7,875,000 8,263,000 8,641,000 9,035,000 WTP/Landfill Discharge Fee 0 0 0 0 0 0 0
Sewer Septage Service Charge 1,000,000 1,000,000 1,080,000 1,166,000 1,260,000 1,348,000 1,442,000 Sewer Connections - Customers 100,000 100,000 104,000 108,000 112,000 117,000 122,000 Other Revenue 24,000 62,000 62,000 62,000 62,000 62,000 62,000 ________ ________ ________ ________ ________ ________ ________ Total Non-Rate Revenue 6,549,000 8,387,000 9,039,000 9,574,000 10,069,000 10,549,000 11,051,000 Total Revenues 26,401,000 29,391,000 31,950,000 34,565,000 37,329,000 40,009,000 42,888,000 Projected Debt Proceeds 13,740,000 12,000,000 8,000,000 8,000,000 Expenses
Operating Expenses
Personnel Services 10,130,000 10,782,000 11,980,000 12,829,000 13,494,000 14,193,000 14,926,000 Professional Services 7,523,000 7,814,000 8,251,000 8,581,000 8,924,000 9,281,000 9,653,000 Operating Supplies 3,845,000 4,514,000 4,808,000 5,126,000 5,469,000 5,713,000 5,968,000 Other Materials and Services 63,000 107,000 111,000 116,000 120,000 125,000 130,000 Other Charges 461,000 447,000 464,000 483,000 502,000 522,000 543,000 Other Financing Uses 682,000 209,000 217,000 226,000 235,000 245,000 254,000 ________ ________ ________ ________ ________ ________ ________ Total Operating Expenses 22,704,000 23,873,000 25,831,000 27,361,000 28,744,000 30,079,000 31,474,000 Non-Operating Expenses
Debt Service 2020 I-Bank 176,000 176,000 176,000 175,000 175,000 175,000 174,000 Debt Service 2025 I-Bank 0 0 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 New Debt Service 0 0 0 0 0 1,187,000 2,374,000
Rate Funded Capital 3,228,000 4,715,000 3,439,000 6,873,000 5,262,000 5,957,000 6,825,000 ________ ________ ________ ________ ________ ________ ________ Total Non-Operating Expenses 3,404,000 4,891,000 5,109,000 8,542,000 6,931,000 8,813,000 10,867,000 Total Expenses 26,108,000 28,764,000 30,940,000 35,903,000 35,675,000 38,892,000 42,341,000 Revenues Less Expenses 293,000 627,000 1,010,000 (1,338,000) 1,654,000 1,117,000 547,000 Ending Reserve Balance 23,481,000 26,549,000 27,559,000 26,221,000 27,875,000 28,992,000 29,539,000 Fund Reserve Target 2 15,528,000 16,112,500 18,585,500 19,349,500 20,041,000 21,895,500 23,779,000 180-days O&M+Debt Svc+$4M Emergency CIP
Debt Coverage Ratio, Min. 1.3 21.01 31.35 3.66 4.32 5.14 3.48 2.82 1 Assumes proposed rates are adopted July 1, 2025 and each July 1 thereafter. 2 180-days O&M+Debt Svc+$4M Emergency CIP

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The following figure shows cash flow projections incorporating the assumptions described above.

Figure 3: Wastewater Projected Cashflow Graph
$0
$10
$20
$30
$40
$50
$60 Rate Funded Capital
Debt Service
O&M
Revenue
Reserves
City of Santa Cruz
Projected Sewer Revenues & Expenses ($ millions)

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5 COST OF SERVICE ANALYSIS & RATE DERIVATION

5.1 Wastewater Cost of Service Rate Derivation Process
BWA derived updated wastewater rates that account for both a) the overall rate increases identified in the financial projections, and b) proposed rate structure modifications. The proposed rates are designed to equitably apportion and recover costs from the City’s customer base. The basic methodology used to develop new rates includes the steps summarized in the figure below.

Figure 4: Wastewater Cost of Service Analysis and Rate Derivation Process Estimate Wastewater Flow & Strength Loadings
Wastewater flow volume, BOD concentrations, and TSS concentrations were determined for each customer class.

Determine Annual Revenue Requirements
Determine the utility’s costs for providing wastwater services and allocate costs by cost allocation category.

Allocate Cost to Functional Components
Each cost was allocated to function: fixed (per customer), flow, BOD, and TSS.

Derive Unit Cost for Functional Components Based on FY 24/25 Rate Revenue Divide costs allocated for recovery from functional components by allocation units to derive unit costs for functional components.

Determine FY 24/25 Rate Revenue Revenue Requirements by Customer Classes Multiply functional unit rates by the billing units associated with each functional component for each customer class to determine the revenue requirement of each class.

Residential Rate Derivation
Fixed and volumetric portions of
the residential revenue
requirement were identified.

The variable portion of the rates
for each class are based on
estimated use per dwelling unit.

The final residential rate
includes the fixed and
volumetric component.

Commercial Rate Derivation
The fixed rates were derived
based on the identified fixed
portion of the revenue
requirement. Volumetric
rates were derived to recover
the remaining revenue
requirement amount and
were calculated based on the
strength assumptions for
each sub-class.

Industrial/Other Rate
Derivation
The fixed rates were
derived based on the
identified fixed portion of
the revenue requirement.

Volumetric rates were
derived to recover the
remaining revenue
requirement amount.

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5.2 Customer Characteristics
The following table summarizes the City’s wastewater customer counts by class.

Table 7. Customer Counts by Class
Customer Characteristics FY 22/23 FY 23/24 FY 24/25
Customer Counts Actual Actual Projected
Residential
Single Family 8,162 8,291 8,291
Multi-Family 6,692 7,367 7,367
Low Sewage Producer 7,446 7,031 7,031 ________ ________ ________ Total 22,300 22,689 22,689
Commercial
Low Strength 887 880 880
Medium Strength 251 251 251
High Strength 110 108 108
Schools, 35% irrigation 1 1 1
Schools, 60% irrigation 3 3 3
Schools, 85% irrigation 3 3 3
Ready-to-Serve 2 2 2 ________ ________ ________
Total 1,257 1,248 1,248
Industrial/Other
Industrial 7 7 7
UCSC - Main Campus 1 1 1
Graham Hill WTP 1 1 1
Landfill Leachate 1 1 1 ________ ________ ________
Total 10 10 10
Total Customer Counts 23,567 23,947 23,947

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The following table includes historic and projected water use by fiscal year for the City’s nonresidential customers.

Table 8. Nonresidential Customer Flows

5.3 Customer Flows and Loadings
Estimated flows and loadings of each customer class are based on analysis of recent water consumption data by fiscal year and wastewater strength assignments for each customer class. • Residential flows per unit are based on the average winter water use per unit. Residential wastewater strength concentrations are based on estimates previously published by the State Water Resources Control Board (SWRCB), adjusted for water conservation, City specific demands, and input from City Staff.
• Commercial/Other flows are estimated based on projected water use. A return to sewer factor (RTS) is applied to adjust water use to estimated flows into the wastewater system. Wastewater strength assumptions for the customer classes are based on the type of customers grouped in each class.

The resulting flow and strength projections for all wastewater customer classes are shown on the following tables. These projections provide the basis for allocating costs and deriving equitable wastewater rates for each customer class.

Customer Characteristics FY 22/23 FY 23/24 FY 24/25
Billed Customer Flows (hcf) Actual Actual
Projected
(Avg. 23 & 24)
Commercial
Low Strength 150,189 154,336 152,263
Medium Strength 171,018 172,960 171,989
High Strength 46,112 49,635 47,874
Schools, 35% irrigation 551 1,174 863
Schools, 60% irrigation 2,690 2,780 2,735
Schools, 85% irrigation 4,133 4,626 4,380
Ready-to-Serve 6,282 7,443 6,863 ________ ________ ________ Total 380,975 392,954 386,965
Industrial/Other
Industrial 33,027 39,108 36,068
UCSC - Main Campus 172,616 173,149 172,883
Graham Hill WTP 24,823 25,971 25,397
Landfill Leachate 27,507 22,007 24,757 ________ ________ ________ Total 257,974 260,236 259,105
Total Billed Customer Flows 638,949 653,190 646,069

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Table 9. Wastewater Flows
Sewer
Est. Mo.

Flow CCF
Annual
Water
Return to
Sewer
Classification Units Per Unit Use CCF1 Flow Factor2 CCF MG3 Residential
Single Family 8,291 5.30 527,308 100% 527,308 394
Multi-Family 7,367 3.90 344,776 100% 344,776 258
Low Sewage Producer 7,031 2.10 177,181 100% 177,181 133 Subtotal Residential 22,689 1,049,264 1,049,264 785
Commercial
Low Strength 7 880 152,263 80% 121,810 91
Medium Strength 8 251 171,989 80% 137,591 103
High Strength 108 47,874 80% 38,299 29
Schools, 35% irrigation 1 863 65% 561 0
Schools, 60% irrigation 3 2,735 40% 1,094 1
Schools, 85% irrigation 3 4,380 15% 657 0
Ready-to-Serve 2 6,863 10% 686 1
Subtotal Commercial 1,248 386,965 300,698 225
Other
Industrial 7 36,068 80% 28,854 22
UCSC - Main Campus 1 172,883 100% 172,883 129
Graham Hill WTP 1 25,397 100% 25,397 19
Landfill Leachate 1 24,757 100% 24,757 19
Subtotal Other 3 223,037 223,037 167
Total 23,947 1,695,334 1,601,853 1,198
1 "CCF" stands for hundred cubic feet.
2 Flow factor based on estimated flow returning to sewer. 3 "MG" stands for million gallons.
4 "GPD" stands for gallons per day.
5 "BOD" stands for biochemical oxygen demand.
6 "TSS" stands for total suspended solids.
7 City Facilities class incorporated into Low Strength class. 8 Hotels/Motels class incorporated into Medium Strength class.

Projected
Wastewater Flow

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Table 10. Wastewater Strength and Loadings
Strength (mg/l) Loadings (lbs)
Customer Classification CCF MG3 GPD4 BOD5 TSS6 BOD TSS
Residential
Single Family 527,308 394 1,080,695 300 300 987,731 987,731 Multi-Family 344,776 258 706,603 300 300 645,819 645,819 Low Sewage Producer 177,181 133 363,125 300 300 331,888 331,888 Subtotal Residential 1,049,264 785 2,150,423 1,965,439 1,965,439 Commercial
Low Strength 7 121,810 91 249,644 150 150 114,085 114,085 Medium Strength 8 137,591 103 281,987 225 225 193,298 193,298 High Strength 38,299 29 78,492 800 800 191,306 191,306
Schools, 35% irrigation 561 0 1,149 150 150 525 525
Schools, 60% irrigation 1,094 1 2,242 150 150 1,025 1,025 Schools, 85% irrigation 657 0 1,346 150 150 615 615
Ready-to-Serve 686 1 1,406 150 150 643 643
Subtotal Commercial 300,698 225 616,267 501,496 501,496 Other
Industrial 28,854 22 59,135 270 270 48,643 48,643
UCSC - Main Campus 172,883 129 354,315 750 750 809,591 809,591 Graham Hill WTP 25,397 19 52,051 0 2,200 0 348,870
Landfill Leachate 24,757 19 50,739 400 250 61,833 38,646 Subtotal Other 223,037 167 457,105 871,424 1,197,106
Total 1,601,853 1,198 3,282,931 3,387,002 3,712,684
1 "CCF" stands for hundred cubic feet.
2 Flow factor based on estimated flow returning to sewer. 3 "MG" stands for million gallons.
4 "GPD" stands for gallons per day.
5 "BOD" stands for biochemical oxygen demand.
6 "TSS" stands for total suspended solids.
7 City Facilities class incorporated into Low Strength class. 8 Hotels/Motels class incorporated into Medium Strength class.

Projected
Wastewater Flow

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5.4 Cost of Service Analysis
This section describes the steps BWA took to determine the rate revenue requirement need from each customer class that is proportional to their cost of service.

5.4.1 Cost Allocation Category Rate Revenue Requirements Cost allocation categories are groupings of the wastewater’s non-rate revenues and expenses that are then allocated to the utility’s functional components (Customer, Flow, BOD & TSS, described in the next section). In each cost allocation category, the expenses are reduced by non-rate revenues to determine the amount in each cost allocation category that needs to be funded by rates.

The cash flow shows revenues and expenses using the City's budget labels, which don't align well with the functions of the wastewater system. The City also tracks expenses by activity, and the activities do align with functions of the wastewater system. The revenues and expenses in the allocation categories presented in this section are the same as those in the cash flow except they are now grouped by activity. To ensure the rates derived for the next five years are proportional to the costs, the amounts in the allocation categories are based on an average of the projected revenues and expenses for the next five years.

The cost allocation categories are as follows:
• As All Other – Expenses in this category do not impact the functional allocation because they are driven by the overall activity of the utility. These expenses include other financing uses, namely transfers to other City funds. They were allocated entirely to the “As All Other” functional component.
• Customer Service – Expenses in this category are related to the customer service provided to the City’s wastewater customers. These costs are driven by the number of customers and are entirely allocated to the customer functional component. • Collection – Expenses in this category are related to the wastewater collection system. These costs are largely driven by the volume of wastewater flow and also impacted by the number of connections to the system. Expenses in this category are allocated to the customer and flow functional components.
• Treatment – Expenses in this category are related to wastewater treatment. These costs are largely driven by the volume of wastewater flows and loadings and also impacted by the number of connections to the system. Expenses in this category are allocated to the customer and flow and strength functional components.
• Admin – Expenses in this category are related to internal administration services provided to the wastewater utility. These costs are largely driven by the by the number of customers and also impacted by the volume of wastewater flows and loadings. Expenses in this category are allocated to the customer and flow and strength functional components.

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• Engineering – Expenses in this category are related to engineering activities performed by the wastewater utility. Expenses in this category are allocated to the flow and strength functional components based on the blend of capital collection and treatment projects. • Capital – Expenses in this category reflect costs for capital projects. This category is allocated to the flow and strength functional components based on the blend of capital collection and treatment projects.
• Debt – Expenses in this category reflect annual debt service payments. Expenses in this category are allocated to the flow and strength functional components based on the blend of capital collection and treatment projects.

The following table shows rate revenue requirements by cost allocation category based on a fiveyear average of projected revenue and expenses for the City’s wastewater utility.

Table 11. Rate Revenue Requirements by Cost Allocation Category

5.4.2 Functional Components
Functional cost components reflect the functions of the utility that drive its costs. The functional cost components used in this study are as follows:
• Customer – Costs related to providing service to each customer were allocated to this functional component. These costs are related to the number of customers served by the City. • Flow – Costs related to system flows were allocated to this functional component. These costs are related to the volume of wastewater flows.
• BOD – Costs related to treating BOD are allocated to this functional component. These costs are allocated related to the pounds of BOD loadings treated. • TSS – Costs related to treating TSS are allocated to this functional component. These costs are allocated related to the pounds of TSS loadings treated. 5-Year Average
Allocation
Category Expenses
Less Non-Rate
Revenue
Revenue
Requirement
As All Other 235,400 433,200 (197,800)
Customer Service 491,162 0 491,162
Collection 4,692,693 0 4,692,693
Treatment 21,685,603 9,509,800 12,175,803
Admin 1,350,510 0 1,350,510
Engineering 242,433 0 242,433
Capital 5,671,200 112,700 5,558,500
Debt 2,381,200 0 2,381,200
Total $36,750,200 $10,055,700 $26,694,500

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5.4.3 Functional Allocation
The purpose of the functional allocation is to determine the portion of rate revenues needed to support each function of the wastewater system. This is done by assigning wastewater system costs to each allocation category for revenue recovery via the functional cost components of customer costs, flow, BOD (biochemical oxygen demand), and TSS (total suspended solids). While there is no single correct approach for cost allocation, BWA believes that costs should be allocated within a reasonable range that reflects both a) underlying cost causation, to the extent such causation can reasonably be determined or estimated, and b) the policy preferences of the agency in cases where a range of reasonable approaches can be justified. This process is intended to proportionately allocate costs to each functional component to determine the revenue requirement for each component. The allocations to each functional component were based on input from City staff.

The following table shows a breakdown of the revenue recovery needed from rates (revenue requirement) for each cost allocation category allocated by function. The result of this allocation is the percent of the revenue requirement associated with each functional allocation category.

Table 12. Rate Revenue Requirements by Functional Components 5-Year Average
Allocation Category
Revenue
Requirement Customer Flow BOD TSS
As All
Other Total
As All Other (197,800) 0% 0% 0% 0% 100.0% 100.0%
Customer Service 491,162 100% 0% 0% 0% 0.0% 100.0%
Collection 4,692,693 0% 90% 5% 5% 0.0% 100.0%
Treatment 12,175,803 20% 32% 24% 24% 0.0% 100.0%
Admin 1,350,510 85% 5% 5% 5% 0.0% 100.0%
Engineering 242,433 25% 38% 19% 19% 0.0% 100.0%
Capital 5,558,500 25% 38% 19% 19% 0.0% 100.0%
Debt 2,381,200 25% 38% 19% 19% 0.0% 100.0%
Total $26,694,500 $6,119,789 $11,255,506 $4,758,503 $4,758,503 -$197,800 $26,694,500 Cost Allocation, $ $6,119,789 $11,255,506 $4,758,503 $4,758,503 $26,892,300 Cost Allocation, % 22.8% 41.8% 17.7% 17.7% 100%

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City of Santa Cruz – 2025 Wastewater Rate Study

5.4.4 Functional FY 24/25 Rate Revenue Requirements
To determine current rate revenue requirements by function, projected rate revenues for FY 24/25 are multiplied by the functional allocation percentages developed above. Approximately $4.8 million of the wastewater utility’s costs are fixed expenses that do not vary with changes in customer flow and strength characteristics.

Table 13. FY 24/25 Functional Rate Revenue Requirements FY 24/25 Functional Rate
Revenue Requirement
FY 24/25
Rate
Revenue Customer Flow BOD TSS
Functional Allocation % 100% 22.8% 41.8% 17.7% 17.7%
FY 24/25 Functional Rate
Revenue Requirements $ $21,004,000 $4,788,912 $8,779,672 $3,717,708 $3,717,708

5.4.5 Functional Component FY 24/25 Unit Costs
The table below calculates the unit rates for each functional cost component. The wastewater rate revenue requirements from the prior table for each functional component are divided by the units related to each function.

Table 14. FY 24/25 Functional Component Unit Costs
Allocation Units Fixed Flow BOD TSS
(Customers) (CCF) (LBS) (LBS)
Revenue Requirement $4,788,912 $8,779,672 $3,717,708 $3,717,708 Demand Units 23,947 1,601,853 3,387,002 3,712,684
Functional Unit Rates $199.98 $5.48 $1.10 $1.00

5.4.6 Rate Revenue Requirements by Customer Class
Total revenue requirements for each customer class is calculated by multiplying the unit rate for each functional cost component by the units related to each function. The table below details the units related to each function for each customer class.

Table 15. Functional Allocation Units by Class
Allocation Units Fixed Flow BOD TSS
(Customers) (CCF) (LBS) (LBS)
Residential 22,689 1,049,264 1,965,439 1,965,439
Commercial 1,248 300,698 501,496 501,496
Industrial 7 28,854 48,643 48,643
UCSC - Main Campus 1 172,883 809,591 809,591
Graham Hill WTP 1 25,397 0 348,870
Landfill Leachate 1 24,757 61,833 38,646
Total 23,947 1,601,853 3,387,002 3,712,684

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The table below details the total revenue requirements by functional cost component for each customer class.

Table 16. Total Functional Rate Revenue Requirements by Class Revenue Requirements Fixed Flow BOD TSS
Total Revenue
Requirement
(Customers) (CCF) (LBS) (LBS)
Residential $4,537,338 $5,750,961 $2,157,344 $1,968,098 $14,413,741 Commercial 249,575 1,648,108 550,462 502,175 2,950,319
Industrial 1,400 158,147 53,393 48,709 261,649
UCSC - Main Campus 200 947,560 888,639 810,686 2,647,085 Graham Hill WTP 200 139,201 0 349,342 488,743
Landfill Leachate 200 135,694 67,870 38,698 242,463
Total 4,788,912 8,779,672 3,717,708 3,717,708 $21,004,000 After determining the revenue requirements by class, a portion of the flow functional cost component was reallocated to be recovered from the fixed charge to reflect the fixed nature of some collection system costs. The fixed allocation for the industrial and UCSC customer classes was determined in rate design to more reasonably collect the fixed charge from those customers.

Table 17. Adjusted Rate Revenue Requirements by Class
Adjusted Revenue
Requirements
Flow
Allocation
to Fixed Fixed Flow BOD TSS Total
Residential 25.0% $5,975,078 $4,313,221 $2,157,344 $1,968,098 $14,413,741 Commercial 25.0% 661,602 1,236,081 550,462 502,175 $2,950,319 Industrial n/a
UCSC - Main Campus n/a
Graham Hill WTP 25.0% 35,000 104,401 0 349,342 $488,743 Landfill Leachate 25.0% 34,124 101,771 67,870 38,698 $242,463

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5.5 Rate Derivation
This section describes how rates for each sub-class of customer are derived to reflect the proportional cost of providing wastewater service.

5.5.1 Residential Rate Derivation
The City currently charges all residential customers a fixed monthly rate per dwelling unit.

Residential customers are split into three subclasses which include, single-family, multi-family, and low sewage producers. Low Sewage Producers are single-family customers or multi-family customers who average 225 cubic feet or less of water per month, per dwelling unit, during four out of the five winter months (December through April).

The total residential customer class revenue requirement was calculated above. A portion of the residential revenue requirement is recovered as a fixed amount per dwelling unit for each residential sub class to reflect the fixed capacity that must be maintained for each dwelling unit. The remaining portion of the revenue requirement, the flow portion, is recovered based on the estimated wastewater flow per dwelling unit for each residential subclass. Estimated flows per dwelling unit were based on an analysis of winter water use. The monthly fixed rate component and the monthly flow rate component are added together to derive the total monthly rate per dwelling unit.

The following table details the calculation for residential wastewater rates.

Table 18. Residential Rate Derivation
Residential Rate Derivation
Unit Cost Calculation Total Fixed Flow
(Dwelling Units) (CCF)
Revenue Requirement $14,413,741 $5,975,078 $8,438,663
Allocation % 100.0% 41.5% 58.5%
Allocation Units 22,689 1,049,264
Unit Cost ($ per Unit) $263.35 $8.04
Monthly Monthly Monthly Total
Fixed Rate Derivation Flow Flow Rate Fixed Rate Monthly Rate (Estimated CCF/ Dwelling Unit) ($/ Dwelling
Unit)
($/ Dwelling
Unit)
($/ Dwelling
Unit)
Single Family 5.30 $42.63 $21.95 $64.57
Multi-Family 3.90 $31.37 $21.95 $53.31
Low Sewage Producers 2.10 $16.89 $21.95 $38.83

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5.5.2 Commercial Customer Class Rate Derivation
The existing commercial class has several sub classes with different strength and flow characteristics. Bartle Wells Associates recommends the City consolidate subclasses that have little differentiating characteristics from the low, medium, or high strength customer sub-classes. BWA recommends including hotels/motels in the medium strength sub-class, interdepartmental customers in the low strength sub-class, and reclassifying the smaller industrial customers into either the low, medium, or high strength sub-classes as appropriate based on each customer’s characteristics.

Commercial customers are currently charged monthly fixed rates per customer, plus a quantity rate per CCF of estimated wastewater discharge. The current fixed rates vary by sub-class. BWA recommends all commercial customers pay the same fixed charge to reflect the minimum fixed costs to serve the capacity of each connection. The costs related to the different strength and flow characteristics for each sub-class will be reflected in the quantity rate recovered per unit of water demand.

The total FY 2024/25 revenue requirement for this class is calculated above. The fixed revenue recovery was set to reflect the fixed capacity that must be maintained per connection.

The remaining portion of the revenue requirement was reallocated proportionally, based on the wastewater system allocation to flow, BOD and TSS. The volumetric unit cost per CCF is calculated based on strength assumptions for each sub-class and the commercial class flow, BOD and TSS unit costs. Volumetric costs are adjusted by the estimated return to sewer factor for each sub-class, to reflect the metered water use. This adjustment is necessary to account for the estimated sewer discharge of commercial customers based on year-round water use data, which includes some water use that does not enter the sewer system.

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The following table displays the derivation of commercial wastewater rates.

Table 19. Commercial Rate Derivation

5.5.3 Industrial/Other Customer Class Rate Derivation
Customers in the Other customer class include industrial customers and other large wastewater customers. As shown above, each subclass has its FY 2024/25 revenue requirement calculated as if each subclass is its own customer class. Other class customers are charged a monthly fixed rate per customer plus a quantity rate per CCF of water use. Monthly fixed rates are calculated by dividing the total fixed revenue requirements for each customer by 12 (months). Volumetric costs are determined by dividing the remaining revenue requirement for each customer by their projected water use.

Table 20. Industrial/Other Customer Class Rate Derivation Commercial Rate Derivation
Unit Cost Calculation Total Fixed Flow BOD TSS
(Custome
)
(CCF) (LBS) (LBS)
Revenue Requirement $2,950,319 $661,602 $1,236,081 $550,462 $502,175 Allocation % 100.0% 22.4% 42.0% 17.8% 17.8%
Allocation Units 1,248 300,698 501,496 501,496
Unit Cost ($ per Unit) $530.13 $4.11 $1.10 $1.00
Total
Volumetric Volumetric Unit Cost Volumetric Return Volumetric Monthly Rate Derivation BOD SS Flow BOD TSS Unit Cost to Sewer Rates Fixed Rates (MG/L) (MG/L) ($/ CCF) ($/ CCF) ($/ CCF) ($/ CCF) ($/ CCF) ($/ CCF) Low Strength 150 150 $4.11 $1.03 $0.94 $6.07 80% $4.86 $44.18 Medium Strength 225 225 $4.11 $1.54 $1.41 $7.06 80% $5.65 $44.18 High Strength 800 800 $4.11 $5.48 $5.00 $14.59 80% $11.67 $44.18 Hotels/Motels 225 225 $4.11 $1.54 $1.41 $7.06 80% $5.65 $44.18 Schools, 35% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 65% $3.95 $44.18 Schools, 60% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 40% $2.43 $44.18 Schools, 85% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 15% $0.91 $44.18 Ready-to-Serve 150 150 $4.11 $1.03 $0.94 $6.07 10% $0.61 $44.18 Strength
Industrial/Other Customer Class Rate Derivation
Fixed Rate Derivation Variable Rate Derivation
Strength Revenue Fixed Revenue Monthly Revenue Return Water Water BOD SS Requirement Allocation Requirement Customers Fixed Rate Requirement to Sewer Use Use (MG/L) (MG/L) (#) ($/ Customer) (CCF) ($/ CCF)
Industrial 270 270 $261,649 7.5% $19,624 7 $233.62 $242,025 80% 36,068 $6.71 UCSC - Main Campus 750 750 $2,647,085 30.0% $794,126 1 $66,177.13 $1,852,960 100% 172,883 $10.72 Graham Hill WTP 0 2200 $488,743 7.2% $35,000 1 $2,916.69 $453,743 100% 25,397 $17.87 Landfill Leachate 400 250 $242,463 7.2% $34,124 1 $2,843.63 $208,339 100% 24,757 $8.42

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5.6 Proposed Wastewater Rates
The following table shows a 5-year schedule of proposed wastewater rates. The first rate increase is projected to become effective on July 1, 2025. The rates are designed to recover the City’s costs of providing wastewater service while achieving roughly balanced budgets.

Table 21. Proposed Wastewater Rates

Note: Initial rate increase effective July 1, 2025 includes modifications to the rate structure that result in a range of bill impacts depending on customer class and billed usage.

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5.7 Ready to Serve Rates
The City also serves a small number of customers whose water use does not accurately reflect their wastewater discharge. Rates for these customers are based on the standard commercial rates but account for reduced levels of wastewater discharge.

Table 22. Ready to Serve Rates

5.8 Regional Wastewater Rate Survey
The following chart compares the wastewater bills for a typical single-family home to those of other regional agencies. The City’s wastewater rates are at the lower end of the range of coastal wastewater agencies. Many of these agencies are facing similar financial pressures and are either in the middle of multi-year rate increases or are anticipating raising rates in upcoming years.

Figure 5: Regional Single Family Residential Wastewater Rate Survey Current Projected Wastewater Rates Effective July 1
Rates 2025 2026 2027 2028 2029
Ready to Serve
Fixed Monthly Rates
All Customers $41.70 $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Schools, 35% irrigation 4.09 4.26 4.60 4.97 5.32 5.69
Schools, 60% irrigation 3.04 2.62 2.83 3.06 3.27 3.50
Schools, 85% irrigation 0.91 0.98 1.06 1.14 1.22 1.31
Other Ready-to-Serve 0.48 0.66 0.71 0.77 0.82 0.88

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6 CONCLUSION & RECOMMENDATIONS
In conclusion, the City's wastewater enterprise is in overall good financial health but will need rate increases in upcoming year to provide adequate funding for high-priority capital improvement needs and keep rates aligned with escalating costs of operations. The proposed 5-year schedule of wastewater rates is designed to recover the costs of providing wastewater service while supporting roughly balanced budgets in future years.

Based on the survey of regional wastewater charges, the City’s wastewater rates are currently in the lower-middle range and are projected to remain in the lower-middle to middle range in future years with the proposed rate increases. Many other regional agencies are facing similar financial challenges with cost inflation and the need to increase investment in aging infrastructure and are also anticipating rate increases in upcoming years.

General rate recommendations for the wastewater enterprise include:
• BWA recommends the City adopt the proposed wastewater rates starting July 1, 2025. • The City should update the wastewater financial projections within the next five years to evaluate funding needs and rate increases in subsequent years. • After the proposed rates are implemented, the City should continue to adopt annual rate increases to keep revenues in line with the cost of providing service and minimize the need for larger, periodic rate spikes.

27.43 APPENDIX A
Wastewater
Financial Plan and
Rate Study Tables

27.44 Draft Wastewater Financial Plan
and Rate Study Tables
City of Santa Cruz
February 21, 2025

27.45 Table 1, Historical Wastewater Rates
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Historical Wastewater Rates FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 Fixed Monthly Rates
Residential (per dwelling unit)
Single Family 50.50 50.50 54.00 57.80 61.30 65.00
Multi-Family 41.30 41.30 44.20 47.30 50.10 53.10
Low Sewage Producer 29.70 29.70 31.80 34.00 36.00 38.20 Commercial (per customer)
Low Strength 32.40 32.40 34.70 37.10 39.30 41.70
Medium Strength 54.70 54.70 58.50 62.60 66.40 70.40
High Strength 107.90 107.90 115.50 123.60 131.00 138.90 Hotel / Motel 54.70 54.70 58.50 62.60 66.40 70.40
City Facilities 21.40 21.40 22.90 24.50 26.00 27.60
All Schools 32.40 32.40 34.70 37.10 39.30 41.70
Ready-to-Serve 32.40 32.40 34.70 37.10 39.30 41.70
Industrial/Other (per customer)
Industrial 185.30 185.30 198.30 212.20 224.90 238.40
UCSC - Main Campus 51,994.60 51,994.60 55,634.20 59,528.60 63,100.30 66,886.30 Graham Hill WTP 4,284.30 4,284.30 4,584.20 4,905.10 5,199.40 5,511.40 Landfill Leachate 2,152.80 2,152.80 2,303.50 2,464.70 2,612.60 2,769.40 Quantity Charges, per CCF 1
Commercial
Low Strength 3.79 3.79 4.06 4.34 4.60 4.88
Medium Strength 3.88 3.88 4.15 4.44 4.71 4.99
High Strength 8.41 8.41 9.00 9.63 10.21 10.82
Hotel / Motel 3.94 3.94 4.22 4.52 4.79 5.08
City Facilities 3.66 3.66 3.92 4.19 4.44 4.71
Schools, 35% irrigation 3.18 3.18 3.40 3.64 3.86 4.09
Schools, 60% irrigation 2.36 2.36 2.53 2.71 2.87 3.04
Schools, 85% irrigation 0.71 0.71 0.76 0.81 0.86 0.91
Ready-to-Serve 0.37 0.37 0.40 0.43 0.45 0.48
Industrial/Other
Industrial 5.21 5.21 5.57 5.96 6.32 6.70
UCSC - Main Campus 8.29 8.29 8.87 9.49 10.06 10.66
Graham Hill WTP 12.98 12.98 13.89 14.86 15.75 16.70
Landfill Leachate 6.62 6.62 7.08 7.58 8.03 8.51
1 CCF = 100 Cubic Feet or approximately 748 gallons

27.46 Table 2, Operating Expenses and Non-Rate Revenue
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Escalation Factors 1 Factor FY 23-24 FY 24-25 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 General Inflation Factor Gen. 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% No Escalation None 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Operating Costs Op. 8.1% 5.9% 4.9% 4.6% 4.6% 4.1% 4.1% 4.1% 4.1% 4.1% Interest on Reserves Int. 2.5% 2.5% 2.5% 2.5% 2.5% 2.0% 2.0% 2.0% 2.0% 2.0% Rate Revenue Rate 8.0% 8.0% 8.0% 7.0% 7.0% 3.0% 3.0% 3.0% 3.0% 3.0% Personnel Services Per. 11.0% 7.0% 5.0% 5.0% 5.0% 4.0% 4.0% 4.0% 4.0% 4.0% Professional Services Pro. 5.5% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Operating Supplies Sup. 6.5% 6.5% 6.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% Non-Rate Revenues 2 Factor FY 23-24 FY 24-25 FY 24-25 3 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Ado. Budget Est. Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected County Reimbursements 4 Op. 6,691,289 5,080,000 6,880,000 7,439,020 7,874,691 8,263,470 8,640,618 9,035,142 9,405,127 9,790,298 10,191,279 10,608,721 11,043,300 Septage Service Charge Rate 750,103 1,000,000 1,000,000 1,080,000 1,166,400 1,259,712 1,347,892 1,442,244 1,485,512 1,530,077 1,575,979 1,623,259 1,671,956 Capacity Charges Gen. 122,457 100,000 100,000 104,000 108,160 112,486 116,986 121,665 126,532 131,593 136,857 142,331 148,024 Interest on Reserves 5 Int. 555,164 345,042 345,042 353,668 362,510 371,572 380,862 390,383 398,191 406,155 414,278 422,563 431,015 Other Revenues None 187,707 23,500 61,500 61,500 61,500 61,500 61,500 61,500 61,500 61,500 61,500 61,500 61,500 __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ Total Non-Rate Revenues 8,306,721 6,548,542 8,386,542 9,038,188 9,573,261 10,068,741 10,547,857 11,050,935 11,476,862 11,919,623 12,379,893 12,858,374 13,355,796 Operating Expenses 6 Factor FY 23-24 FY 24-25 FY 24-25 3 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Ado. Budget Est. Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Personnel Services 7 Per. 10,129,746 10,931,492 10,782,255 11,968,303 12,806,084 13,446,388 14,118,708 14,824,643 15,417,629 16,034,334 16,675,708 17,342,736 18,036,445 Professional Services 8 Pro. 7,522,722 9,742,618 7,814,316 8,244,103 8,573,868 8,916,822 9,273,495 9,644,435 10,030,212 10,431,421 10,848,678 11,282,625 11,733,930 Operating Supplies 9 Sup. 3,845,247 3,923,330 4,513,550 4,806,931 5,119,381 5,452,141 5,697,487 5,953,874 6,221,798 6,501,779 6,794,359 7,100,106 7,419,610 Other Materials & Services Gen. 63,127 255,200 106,900 111,176 115,623 120,248 125,058 130,060 135,263 140,673 146,300 152,152 158,238 Other Charges Gen. 461,100 446,500 446,500 464,360 482,934 502,252 522,342 543,236 564,965 587,564 611,066 635,509 660,929 Other Financing Uses Gen. 682,027 116,817 209,021 217,382 226,077 235,120 244,525 254,306 264,478 275,057 286,060 297,502 309,402 __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ Total Operating Expenses 22,703,969 25,415,957 23,872,542 25,812,255 27,323,967 28,672,971 29,981,615 31,350,554 32,634,345 33,970,828 35,362,170 36,810,629 38,318,554 Operating Costs Increase % 8.1% 5.9% 4.9% 4.6% 4.6% 4.1% 4.1% 4.1% 4.1% 4.1% 2 Not escalated unless otherwise noted.
3 Wastewater budget amounts adjusted based on input from City Staff for rate-making purposes. 4 Escalated by operating costs factor for reimbursements allowed under the Joint Wastewater Treatment and Disposal Agreement between Santa Cruz County and Sanitation District and the City of Santa Cruz. 5 This is the assumed interest rate which is applied to projected reserves in the model. 6 Escalated by general inflation factor unless otherwise noted. 7 Escalated by salary and benefits cost factor based on projected future cost of living adjustments and projected inflation of specific benefit expenses such as health insurance. 8 Reflects internal services increasing by 10% in FY 25/26 due to the revised Central Services Cost Allocation Plan. 9 Reflects assumption of continued above average chemicals cost inflation. 1 General inflation factor based on conservative estimates of costs. Specific escalation factors based on recent revenue and expense trends and input from City staff.

27.47 Table 3, Capital Improvement Costs (Current $)
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
CIP (Current Dollars) FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected 01 - Active (8/17th County Share)
Jessie Street Marsh 12,520 200,000 0 0 0 0 0 0 0 0 0 0
Neary Lagoon Park Rehab-Maint (annual) 985,510 275,000 275,000 525,000 275,000 275,000 300,000 300,000 300,000 300,000 300,000 300,000 WWTF Infra. And Major Equip Study (annual) 1,259,882 3,000,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 WWTF -CMMS Upgrade 174,753 0 0 0 0 0 0 0 0 0 0 0
WWTF - Electrical System 106,178 2,000,000 2,000,000 2,000,000 2,000,000 15,250,000 15,250,000 15,250,000 15,250,000 0 0 0 WWTF - Equipment Replacement (annual) 1,417,066 1,000,000 1,000,000 1,000,000 1,000,000 1,500,000 2,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 WWTF Master Plan 0 1,750,000 0 0 0 0 0 0 0 0 0 0
WWTF Odor Control Project 0 50,000 0 0 0 0 0 0 0 0 0 0
02 - Active
City WWTF Headworks Replacement 496,989 13,500,000 10,000,000 0 0 0 0 0 0 0 0 0 Front-Spruce-Pacific-Sewer Main Rehab 80,465 6,500,000 0 0 0 0 0 0 0 0 0 0 Isbel Pump Station Replacement 17,769 0 0 0 0 0 0 0 0 0 0 0 Pelton Ave Pump Station Generator 0 30,000 0 0 0 0 0 0 0 0 0 0 San Lorenzo River Sanitary Sewer Siphon 0 0 0 0 250,000 0 0 0 0 0 0 0 Sewer System Improvements (annual) 511,123 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 03 - Future (8/17th County Share)
WWTF - Laboratory Modernization 0 0 500,000 1,500,000 0 0 0 0 0 0 0 0 WWTF - Upgrade Digester Equipment 10,584 0 0 0 0 800,000 0 0 0 800,000 0 0 04 - Future
Fairmount/Harrison Sewer Main Upgrade 0 0 0 0 0 400,000 0 0 0 0 0 0 May/Coulson/Berry Trunk Sewer 0 0 250,000 750,000 0 0 0 0 0 0 0 0 Monterey St. and Lighthouse Ave. Sewer 0 0 0 0 600,000 0 0 0 0 0 0 0 Sewer Realignment Project 0 500,000 0 0 0 0 0 0 0 0 0 0 Trevethan Ave Sewer 0 0 100,000 0 0 0 600,000 0 0 0 0 0 Arroyo Seco Slide 0 0 50,000 850,000 0 0 0 0 0 0 0 0
High Street Sewer Upsizing 0 600,000 0 0 0 0 0 0 0 0 0 0 Lee Street Bridge Sewer Crossing Replacement 0 0 353,000 0 0 0 0 0 0 0 0 0 Total CIP (Current Dollars) 5,072,839 30,705,000 17,328,000 9,425,000 6,925,000 21,025,000 21,150,000 22,550,000 22,550,000 8,100,000 7,300,000 7,300,000 Total (8/17th County Share) 1,866,585 3,894,118 2,482,353 3,070,588 2,247,059 9,094,118 8,964,706 9,435,294 9,435,294 2,635,294 2,258,824 2,258,824 Total Santa Cruz CIP 3,206,254 26,810,882 14,845,647 6,354,412 4,677,941 11,930,882 12,185,294 13,114,706 13,114,706 5,464,706 5,041,176 5,041,176

27.48 Table 4, Capital Improvement Costs (Future $)
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
CIP (Inflated Dollars) FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Annual Inflation Rate 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 01 - Active (8/17th County Share)
Jessie Street Marsh 12,520 200,000 0 0 0 0 0 0 0 0 0 0
Neary Lagoon Park Rehab-Maint (annual) 985,510 275,000 286,000 567,840 309,338 321,711 364,996 379,596 394,780 410,571 426,994 444,073 WWTF Infra. And Major Equip Study (annual) 1,259,882 3,000,000 1,560,000 1,622,400 1,687,296 1,754,788 1,824,979 1,897,979 1,973,898 2,052,854 2,134,968 2,220,366 WWTF -CMMS Upgrade 174,753 0 0 0 0 0 0 0 0 0 0 0
WWTF - Electrical System 106,178 2,000,000 2,080,000 2,163,200 2,249,728 17,840,343 18,553,957 19,296,115 20,067,960 0 0 0 WWTF - Equipment Replacement (annual) 1,417,066 1,000,000 1,040,000 1,081,600 1,124,864 1,754,788 2,433,306 3,795,957 3,947,795 4,105,707 4,269,935 4,440,733 WWTF Master Plan 0 1,750,000 0 0 0 0 0 0 0 0 0 0
WWTF Odor Control Project 0 50,000 0 0 0 0 0 0 0 0 0 0
02 - Active
City WWTF Headworks Replacement 496,989 13,500,000 10,400,000 0 0 0 0 0 0 0 0 0 Front-Spruce-Pacific-Sewer Main Rehab 80,465 6,500,000 0 0 0 0 0 0 0 0 0 0 Isbel Pump Station Replacement 17,769 0 0 0 0 0 0 0 0 0 0 0 Pelton Ave Pump Station Generator 0 30,000 0 0 0 0 0 0 0 0 0 0 San Lorenzo River Sanitary Sewer Siphon 0 0 0 0 281,216 0 0 0 0 0 0 0 Sewer System Improvements (annual) 511,123 1,300,000 1,352,000 1,406,080 1,462,323 1,520,816 1,824,979 3,163,298 3,289,829 3,421,423 3,558,280 3,700,611 03 - Future (8/17th County Share)
WWTF - Laboratory Modernization 0 0 520,000 1,622,400 0 0 0 0 0 0 0 0 WWTF - Upgrade Digester Equipment 10,584 0 0 0 0 935,887 0 0 0 1,094,855 0 0 04 - Future
Fairmount/Harrison Sewer Main Upgrade 0 0 0 0 0 467,943 0 0 0 0 0 0 May/Coulson/Berry Trunk Sewer 0 0 260,000 811,200 0 0 0 0 0 0 0 0 Monterey St. and Lighthouse Ave. Sewer 0 0 0 0 674,918 0 0 0 0 0 0 0 Sewer Realignment Project 0 500,000 0 0 0 0 0 0 0 0 0 0 Trevethan Ave Sewer 0 0 104,000 0 0 0 729,992 0 0 0 0 0 Arroyo Seco Slide 0 0 52,000 919,360 0 0 0 0 0 0 0 0
High Street Sewer Upsizing 0 600,000 0 0 0 0 0 0 0 0 0 0 Lee Street Bridge Sewer Crossing Replacement 0 0 367,120 0 0 0 0 0 0 0 0 0 Total CIP (Inflated Dollars) 5,072,839 30,705,000 18,021,120 10,194,080 7,789,683 24,596,276 25,732,209 28,532,944 29,674,262 11,085,409 10,390,176 10,805,783 Total (8/17th County Share) 1,866,585 3,894,118 2,581,647 3,321,148 2,527,636 10,638,831 10,906,935 11,938,657 12,416,203 3,606,582 3,215,010 3,343,611 Total Santa Cruz CIP 3,206,254 26,810,882 15,439,473 6,872,932 5,262,048 13,957,445 14,825,273 16,594,287 17,258,058 7,478,827 7,175,166 7,462,173

27.49 $26.8
$15.4
$6.9
$5.3
$14.0 $14.8
$16.6 $17.3
$7.5 $7.2 $7.5
$0
$5
$10
$15
$20
$25
$30
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 33-35 Treatment Plant
Collection System
City of Santa Cruz
Wastewater Capital Improvements ($ millions)
Source: City of Santa Cruz CIP; future $ includes 4.0% annual construction cost inflation. Note: Amounts include City of Santa Cruz capital expenses only.

27.50 Table 5, Existing and Proposed Debt
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Fiscal Year
2020 I-Bank
Wastewater Loan
2025 I-Bank
Wastewater Loan
2029 Proposed
Wastewater Loan
Status Existing Existing Proposed
Principal $25,740,000 $36,000,000
Financing Costs $260,000 $500,000
Interest 3.95% 5.00%
Term (Years) 30 30
FY 2025 175,913
FY 2026 175,629 1,494,468
FY 2027 175,337 1,494,468
FY 2028 175,038 1,494,468
FY 2029 174,732 1,494,468 1,187,000
FY 2030 174,418 1,494,468 2,374,000
FY 2031 174,096 1,494,468 2,374,000
FY 2032 173,767 1,494,468 2,374,000
FY 2033 173,429 1,494,468 2,374,000
FY 2034 173,082 1,494,468 2,374,000
FY 2035 172,727 1,494,468 2,374,000
FY 2036 172,363 1,494,468 2,374,000
FY 2037 171,990 1,494,468 2,374,000
FY 2038 171,607 1,494,468 2,374,000
FY 2039 171,215 1,494,468 2,374,000
FY 2040 170,813 1,494,468 2,374,000
FY 2041 170,402 1,494,468 2,374,000
FY 2042 169,979 1,494,468 2,374,000
FY 2043 169,547 1,494,468 2,374,000
FY 2044 169,103 1,494,468 2,374,000
FY 2045 168,649 1,494,468 2,374,000
FY 2046 168,183 1,494,468 2,374,000
FY 2047 167,705 1,494,468 2,374,000
FY 2048 167,215 1,494,468 2,374,000
FY 2049 166,713 1,494,468 2,374,000
FY 2050 166,199 1,494,468 2,374,000
FY 2051 165,672 1,494,468 2,374,000
FY 2052 0 1,494,468 2,374,000
FY 2053 1,494,468 2,374,000
FY 2054 1,494,468 2,374,000
FY 2055 1,494,468 2,374,000
FY 2056 0 2,374,000
FY 2057 2,374,000
FY 2058 2,374,000
FY 2059 2,374,000
FY 2060 0
Total Debt Service $4,625,524 $44,834,036 $72,407,000

27.51 Table 6, Capital Funding
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Capital Funding FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Adj. Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Total Capital Expenditures 5,072,839 30,705,000 18,021,120 10,194,080 7,789,683 24,596,276 25,732,209 28,532,944 29,674,262 11,085,409 10,390,176 10,805,783 Capital Funding 5,072,839 30,705,000 18,021,120 10,194,080 7,789,683 24,596,276 25,732,209 28,532,944 29,674,262 11,085,409 10,390,176 10,805,783 Use of New Debt Proceeds 13,740,000 12,000,000 8,000,000 8,000,000 10,000,000 10,000,000 Grants 364,706
County WWTP Participation 1,844,557 11,884,992 2,581,647 3,321,148 2,527,636 10,638,831 10,906,935 11,938,657 12,416,203 3,606,582 3,215,010 3,343,611 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Rate Funded Capital 3,228,282 4,715,302 3,439,473 6,872,932 5,262,048 5,957,445 6,825,273 6,594,287 7,258,058 7,478,827 7,175,166 7,462,173

27.52 Table 7, Cash Flow Projection City of Santa Cruz Wastewater Rate Study - Draft 2/21/2025 Wastewater Cashflow FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 FY 34-35 Actual Est. Budget Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Projected Revenue Growth 1.0% 1.0% 1.0% 1.0% 1.0% 0.1% 0.1% 0.1% 0.1% 0.1% Rate Revenue Increases 8.0% 8.0% 8.0% 7.0% 7.0% 3.0% 3.0% 3.0% 3.0% 3.0% Beginning Reserve Balance 23,188,000 25,922,000 26,549,000 27,559,000 26,221,000 27,875,000 28,992,000 29,539,000 30,427,000 30,751,000 30,951,000 31,542,000 Revenues
Rate Revenue
Total Rate Revenue 19,852,000 21,004,000 22,911,000 24,991,000 27,260,000 29,460,000 31,837,000 32,825,000 33,844,000 34,894,000 35,977,000 37,093,000 Non-Rate Revenue
Sewer Service Charges - County 5,080,000 6,880,000 7,439,000 7,875,000 8,263,000 8,641,000 9,035,000 9,405,000 9,790,000 10,191,000 10,609,000 11,043,000 Sewer Septage Service Charge 1,000,000 1,000,000 1,080,000 1,166,000 1,260,000 1,348,000 1,442,000 1,486,000 1,530,000 1,576,000 1,623,000 1,672,000 Sewer Connections - Customers 100,000 100,000 104,000 108,000 112,000 117,000 122,000 127,000 132,000 137,000 142,000 148,000 Other Revenue 24,000 62,000 62,000 62,000 62,000 62,000 62,000 62,000 62,000 62,000 62,000 62,000 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Total Non-Rate Revenue 6,549,000 8,387,000 9,039,000 9,574,000 10,069,000 10,549,000 11,051,000 11,478,000 11,920,000 12,380,000 12,859,000 13,356,000 Total Revenues 26,401,000 29,391,000 31,950,000 34,565,000 37,329,000 40,009,000 42,888,000 44,303,000 45,764,000 47,274,000 48,836,000 50,449,000 Projected Debt Proceeds 13,740,000 12,000,000 8,000,000 8,000,000 10,000,000 10,000,000 Expenses
Operating Expenses
Personnel Services 10,130,000 10,782,000 11,980,000 12,829,000 13,494,000 14,193,000 14,926,000 15,542,000 16,183,000 16,849,000 17,542,000 18,263,000 Professional Services 7,523,000 7,814,000 8,251,000 8,581,000 8,924,000 9,281,000 9,653,000 10,039,000 10,440,000 10,858,000 11,292,000 11,744,000 Operating Supplies 3,845,000 4,514,000 4,808,000 5,126,000 5,469,000 5,713,000 5,968,000 6,234,000 6,513,000 6,804,000 7,109,000 7,427,000 Other Materials and Services 63,000 107,000 111,000 116,000 120,000 125,000 130,000 135,000 141,000 146,000 152,000 158,000 Other Charges 461,000 447,000 464,000 483,000 502,000 522,000 543,000 565,000 588,000 611,000 636,000 661,000 Other Financing Uses 682,000 209,000 217,000 226,000 235,000 245,000 254,000 264,000 275,000 286,000 298,000 309,000 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Total Operating Expenses 22,704,000 23,873,000 25,831,000 27,361,000 28,744,000 30,079,000 31,474,000 32,779,000 34,140,000 35,554,000 37,029,000 38,562,000 Non-Operating Expenses
Debt Service 2020 I-Bank 176,000 176,000 176,000 175,000 175,000 175,000 174,000 174,000 174,000 173,000 173,000 173,000 Debt Service 2025 I-Bank 0 0 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 1,494,000 New Debt Service 0 0 0 0 0 1,187,000 2,374,000 2,374,000 2,374,000 2,374,000 2,374,000 2,374,000 Rate Funded Capital 3,228,000 4,715,000 3,439,000 6,873,000 5,262,000 5,957,000 6,825,000 6,594,000 7,258,000 7,479,000 7,175,000 7,462,000 ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ Total Non-Operating Expenses 3,404,000 4,891,000 5,109,000 8,542,000 6,931,000 8,813,000 10,867,000 10,636,000 11,300,000 11,520,000 11,216,000 11,503,000 Total Expenses 26,108,000 28,764,000 30,940,000 35,903,000 35,675,000 38,892,000 42,341,000 43,415,000 45,440,000 47,074,000 48,245,000 50,065,000 Revenues Less Expenses 293,000 627,000 1,010,000 (1,338,000) 1,654,000 1,117,000 547,000 888,000 324,000 200,000 591,000 384,000 Ending Reserve Balance 23,481,000 26,549,000 27,559,000 26,221,000 27,875,000 28,992,000 29,539,000 30,427,000 30,751,000 30,951,000 31,542,000 31,926,000 Fund Reserve Target 2 15,528,000 16,112,500 18,585,500 19,349,500 20,041,000 21,895,500 23,779,000 24,431,500 25,112,000 25,818,000 26,555,500 27,322,000 180-days O&M+Debt Svc+$4M Emergency CIP
Debt Coverage Ratio, Min. 1.3 21.01 31.35 3.66 4.32 5.14 3.48 2.82 2.85 2.88 2.90 2.92 2.94 1 Assumes proposed rates are adopted July 1, 2025 and each July 1 thereafter. 2 180-days O&M+Debt Svc+$4M Emergency CIP

27.53 $0
$10
$20
$30
$40
$50
$60
Rate Funded Capital
Debt Service
O&M
Revenue
Reserves
City of Santa Cruz
Projected Sewer Revenues & Expenses ($ millions)

27.54 Table 8, Expense Allocation by Activity
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Allocation by Activity
Personnel
Services
Professional
Services
Operating
Supplies
Other Materials
and Services
Other Charges and
Financing Uses
Other Financing
Uses Total
5-Year Average Projected Expenses by Activity $13,484,400 $8,938,000 $5,416,800 $120,400 $502,800 $235,400 $28,697,800 FY 2025 Amount by Activity 1
As All Other 0% 0% 0% 0% 0% 100%
Customer Service 0% 5% 0% 0% 0% 0%
Collection 25% 8% 5% 1% 64% 0%
Treatment 75% 69% 94% 97% 36% 0%
Admin 0% 15% 0% 0% 0% 0%
Engineering 0% 2% 1% 2% 0% 0%
Total 100% 100% 100% 100% 100% 100%
5-Year Average Projected Expenses
As All Other 0 0 0 0 0 235,400 235,400
Customer Service 0 491,162 0 0 0 0 491,162
Collection 3,392,836 688,912 287,375 944 322,625 0 4,692,693 Treatment 10,091,564 6,208,025 5,088,742 117,097 180,175 0 21,685,603 Admin 0 1,350,510 0 0 0 0 1,350,510
Engineering 0 199,391 40,683 2,359 0 0 242,433
Total $13,484,400 $8,938,000 $5,416,800 $120,400 $502,800 $235,400 $28,697,800 1 Based on adopted budget by activity.

27.55 Table 9, Non-Rate Revenues by Allocation Activity City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Non Rate Revenue Activity Category Five Year Average
(FY 26-30)
County Reimbursements Treatment 8,250,600
Sewer septage service charge Treatment 1,259,200
Capacity Charges Capital 112,700
Interest on Reserves As All Other 371,700
Other Revenues As All Other 61,500
Total $10,055,700

27.56 Table 10, Functional Cost Allocation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
5-Year Average
Allocation Category Expenses
Less Non-Rate
Revenue
Revenue
Requirement Customer Flow BOD TSS
As All
Other Total
As All Other 235,400 433,200 (197,800) 0% 0% 0% 0% 100.0% 100.0% Customer Service 491,162 0 491,162 100% 0% 0% 0% 0.0% 100.0% Collection 4,692,693 0 4,692,693 0% 90% 5% 5% 0.0% 100.0% Treatment 21,685,603 9,509,800 12,175,803 20% 32% 24% 24% 0.0% 100.0% Admin 1,350,510 0 1,350,510 85% 5% 5% 5% 0.0% 100.0%
Engineering 242,433 0 242,433 25% 38% 19% 19% 0.0% 100.0% Capital 5,671,200 112,700 5,558,500 25% 38% 19% 19% 0.0% 100.0% Debt 2,381,200 0 2,381,200 25% 38% 19% 19% 0.0% 100.0%
Total $36,750,200 $10,055,700 $26,694,500 $6,119,789 $11,255,506 $4,758,503 $4,758,503 -$197,800 $26,694,500 Cost Allocation, $ $6,119,789 $11,255,506 $4,758,503 $4,758,503 $26,892,300 Cost Allocation, % 22.8% 41.8% 17.7% 17.7% 100%

27.57 Table 11, Customer Characteristics
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Customer Characteristics FY 22/23 FY 23/24 FY 24/25
Customer Counts Actual Actual Projected
Residential
Single Family 8,162 8,291 8,291
Multi-Family 6,692 7,367 7,367
Low Sewage Producer 7,446 7,031 7,031
________ ________ ________
Total 22,300 22,689 22,689
Commercial
Low Strength 887 880 880
Medium Strength 251 251 251
High Strength 110 108 108
Schools, 35% irrigation 1 1 1
Schools, 60% irrigation 3 3 3
Schools, 85% irrigation 3 3 3
Ready-to-Serve 2 2 2
________ ________ ________
Total 1,257 1,248 1,248
Industrial/Other
Industrial 7 7 7
UCSC - Main Campus 1 1 1
Graham Hill WTP 1 1 1
Landfill Leachate 1 1 1
________ ________ ________
Total 10 10 10
Total Customer Counts 23,567 23,947 23,947
Billed Customer Flows (hcf) Actual Actual
Projected
(Avg. 23 & 24)
Commercial
Low Strength 150,189 154,336 152,263
Medium Strength 171,018 172,960 171,989
High Strength 46,112 49,635 47,874
Schools, 35% irrigation 551 1,174 863
Schools, 60% irrigation 2,690 2,780 2,735
Schools, 85% irrigation 4,133 4,626 4,380
Ready-to-Serve 6,282 7,443 6,863 ________ ________ ________ Total 380,975 392,954 386,965
Industrial/Other
Industrial 33,027 39,108 36,068
UCSC - Main Campus 172,616 173,149 172,883
Graham Hill WTP 24,823 25,971 25,397
Landfill Leachate 27,507 22,007 24,757 ________ ________ ________ Total 257,974 260,236 259,105
Total Billed Customer Flows 638,949 653,190 646,069

27.58 Table 12, Wastewater Flows and Loadings
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Sewer
Est. Mo.

Flow CCF
Projected
Annual Water Return to Sewer Strength (mg/l) Loadings (lbs) Customer Classification Units Per Unit Use CCF1 Flow Factor2 CCF MG3
GPD4BOD5TSS6

BOD TSS
Residential
Single Family 8,291 5.30 527,308 100% 527,308 394 1,080,695 300 300 987,731 987,731 Multi-Family 7,367 3.90 344,776 100% 344,776 258 706,603 300 300 645,819 645,819 Low Sewage Producer 7,031 2.10 177,181 100% 177,181 133 363,125 300 300 331,888 331,888 Subtotal Residential 22,689 1,049,264 1,049,264 785 2,150,423 1,965,439 1,965,439 Commercial
Low Strength 7 880 152,263 80% 121,810 91 249,644 150 150 114,085 114,085 Medium Strength 8
251 171,989 80% 137,591 103 281,987 225 225 193,298 193,298 High Strength 108 47,874 80% 38,299 29 78,492 800 800 191,306 191,306 Schools, 35% irrigation 1 863 65% 561 0 1,149 150 150 525 525 Schools, 60% irrigation 3 2,735 40% 1,094 1 2,242 150 150 1,025 1,025 Schools, 85% irrigation 3 4,380 15% 657 0 1,346 150 150 615 615 Ready-to-Serve 2 6,863 10% 686 1 1,406 150 150 643 643
Subtotal Commercial 1,248 386,965 300,698 225 616,267 501,496 501,496 Other
Industrial 7 36,068 80% 28,854 22 59,135 270 270 48,643 48,643 UCSC - Main Campus 1 172,883 100% 172,883 129 354,315 750 750 809,591 809,591 Graham Hill WTP 1 25,397 100% 25,397 19 52,051 0 2,200 0 348,870 Landfill Leachate 1 24,757 100% 24,757 19 50,739 400 250 61,833 38,646 Subtotal Other 3 223,037 223,037 167 457,105 871,424 1,197,106 Total 23,947 1,695,334 1,601,853 1,198 3,282,931 3,387,002 3,712,684 1 "CCF" stands for hundred cubic feet.
2 Flow factor based on estimated flow returning to sewer. 3 "MG" stands for million gallons.
4 "GPD" stands for gallons per day.
5 "BOD" stands for biochemical oxygen demand.
6 "TSS" stands for total suspended solids.
7 City Facilities class incorporated into Low Strength class. 8 Hotels/Motels class incorporated into Medium Strength class.

Projected
Wastewater Flow

27.59 Table 13, Unit Cost Derivation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
FY 24/25 Revenue
Requirement by Function
FY 24/25 Rate
Revenue Customer Flow BOD TSS
Cost Allocation % 100% 22.8% 41.8% 17.7% 17.7%
FY 24/25 Rate Revenue $ $21,004,000 $4,788,912 $8,779,672 $3,717,708 $3,717,708 FY 24/25 Functional Unit Cost Customer Flow BOD TSS
(Customers) (CCF) (LBS) (LBS)
Revenue Requirement $4,788,912 $8,779,672 $3,717,708 $3,717,708 Demand Units 23,947 1,601,853 3,387,002 3,712,684
Unit Rate ($ per Unit) $199.98 $5.48 $1.10 $1.00

27.60 Table 14, Class Allocation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
FY 24/25 Class Revenue Requirements Fixed Flow BOD TSS
Total Revenue
Requirement
(Customers) (CCF) (LBS) (LBS)
Unit Rate ($ per Unit) $199.98 $5.48 $1.10 $1.00
Allocation Units
Residential 22,689 1,049,264 1,965,439 1,965,439
Commercial 1,248 300,698 501,496 501,496
Industrial 7 28,854 48,643 48,643
UCSC - Main Campus 1 172,883 809,591 809,591
Graham Hill WTP 1 25,397 0 348,870
Landfill Leachate 1 24,757 61,833 38,646
Total 23,947 1,601,853 3,387,002 3,712,684
Revenue Requirements
Residential $4,537,338 $5,750,961 $2,157,344 $1,968,098 $14,413,741 Commercial 249,575 1,648,108 550,462 502,175 2,950,319
Industrial 1,400 158,147 53,393 48,709 261,649
UCSC - Main Campus 200 947,560 888,639 810,686 2,647,085 Graham Hill WTP 200 139,201 0 349,342 488,743
Landfill Leachate 200 135,694 67,870 38,698 242,463
Total 4,788,912 8,779,672 3,717,708 3,717,708 $21,004,000 Adjusted Revenue
Requirements
Flow Allocation
to Fixed
Residential 25.0% $5,975,078 $4,313,221 $2,157,344 $1,968,098 $14,413,741 Commercial 25.0% 661,602 1,236,081 550,462 502,175 $2,950,319 Industrial n/a
UCSC - Main Campus n/a
Graham Hill WTP 25.0% 35,000 104,401 0 349,342 $488,743 Landfill Leachate 25.0% 34,124 101,771 67,870 38,698 $242,463

27.61 Table 15, Residential Rate Derivation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Residential Rate Derivation
Unit Cost Calculation Total Fixed Flow
(Dwelling Units) (CCF)
Revenue Requirement $14,413,741 $5,975,078 $8,438,663
Allocation % 100.0% 41.5% 58.5%
Allocation Units 22,689 1,049,264
Unit Cost ($ per Unit) $263.35 $8.04
Monthly Monthly Monthly Total
Fixed Rate Derivation Flow Flow Rate Fixed Rate Monthly Rate (Estimated CCF/
Dwelling Unit)
($/ Dwelling
Unit)
($/ Dwelling
Unit)
($/ Dwelling
Unit)
Single Family 5.30 $42.63 $21.95 $64.57
Multi-Family 3.90 $31.37 $21.95 $53.31
Low Sewage Producers 2.10 $16.89 $21.95 $38.83

27.62 Table 16, Commercial Rate Derivation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Commercial Rate Derivation
Unit Cost Calculation Total Fixed Flow BOD TSS
(Custome
rs)
(CCF) (LBS) (LBS)
Revenue Requirement $2,950,319 $661,602 $1,236,081 $550,462 $502,175 Allocation % 100.0% 22.4% 42.0% 17.8% 17.8%
Allocation Units 1,248 300,698 501,496 501,496
Unit Cost ($ per Unit) $530.13 $4.11 $1.10 $1.00
Total
Volumetric Volumetric Unit Cost Volumetric Return Volumetric Rate Derivation BOD SS Flow BOD TSS Unit Cost to Sewer Rates (MG/L) (MG/L) ($/ CCF) ($/ CCF) ($/ CCF) ($/ CCF) ($/ CCF) Low Strength 150 150 $4.11 $1.03 $0.94 $6.07 80% $4.86
Medium Strength 225 225 $4.11 $1.54 $1.41 $7.06 80% $5.65 High Strength 800 800 $4.11 $5.48 $5.00 $14.59 80% $11.67 Hotels/Motels 225 225 $4.11 $1.54 $1.41 $7.06 80% $5.65 Schools, 35% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 65% $3.95 Schools, 60% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 40% $2.43 Schools, 85% irrigation 150 150 $4.11 $1.03 $0.94 $6.07 15% $0.91 Ready-to-Serve 150 150 $4.11 $1.03 $0.94 $6.07 10% $0.61 Strength

27.63 Table 17, Industrial/Other Rate Derivation
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Industrial/Other Customer Class Rate Derivation
Fixed Rate Derivation Variable Rate Derivation
Strength Revenue Fixed Revenue Monthly Revenue Return Water Water BOD SS Requirement Allocation Requirement Customers Fixed Rate Requirement to Sewer Use Use (MG/L) (MG/L) (#) ($/ Customer) (CCF) ($/ CCF)
Industrial 270 270 $261,649 7.5% $19,624 7 $233.62 $242,025 80% 36,068 $6.71 UCSC - Main Campus 750 750 $2,647,085 30.0% $794,126 1 $66,177.13 $1,852,960 100% 172,883 $10.72 Graham Hill WTP 0 2200 $488,743 7.2% $35,000 1 $2,916.69 $453,743 100% 25,397 $17.87 Landfill Leachate 400 250 $242,463 7.2% $34,124 1 $2,843.63 $208,339 100% 24,757 $8.42

27.64 Table 18, Projected Rates
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Current Projected Wastewater Rates Effective July 1
Rates 2025 2026 2027 2028 2029
Residential
Fixed Monthly Rates (per Dwelling Unit)
Single Family $65.00 $69.74 $75.32 $81.35 $87.04 $93.13 Multi-Family 53.10 57.58 62.19 67.17 71.87 76.90
Low Sewage Producer 38.20 41.94 45.30 48.92 52.34 56.00 Commercial
Fixed Monthly Rates
All Customers Varies $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Low Strength 4.88 5.25 5.67 6.12 6.55 7.01
Medium Strength 4.99 5.79 6.59 7.12 7.62 8.15
High Strength 10.82 12.22 13.61 14.70 15.73 16.83
Industrial & Other
UCSC - Main Campus
Fixed Monthly Rates $66,886.30 $71,471.30 $77,189.00 $83,364.12 $89,199.61 $95,443.58 Quantity Rates ($ per ccf) 10.66 11.58 12.51 13.51 14.46 15.47 Graham Hill WTP
Fixed Monthly Rates 5,511.40 3,150.03 3,402.03 3,674.19 3,931.38 4,206.58 Quantity Rates ($ per ccf) 16.70 19.30 20.84 22.51 24.09 25.78 Landfill Leachate
Fixed Monthly Rates 2,769.40 3,071.12 3,316.81 3,582.15 3,832.90 4,101.20 Quantity Rates ($ per ccf) 8.51 9.09 9.82 10.61 11.35 12.14 Industrial
Fixed Monthly Rates 238.40 252.30 272.48 294.28 314.88 336.92 Quantity Rates ($ per ccf) 6.70 7.25 7.83 8.46 9.05 9.68 Septage
Quantity Rates ($ per ccf) 100.99 109.07 117.80 127.22 136.13 145.66 Note: Initial rate increase effective July 1, 2025 includes modifications to the rate structure that result in a range of bill impacts depending on customer class and billed usage.

27.65 Table 19, Projected Ready to Serve Rates
City of Santa Cruz
Wastewater Rate Study - Draft 2/21/2025
Current Projected Wastewater Rates Effective July 1
Rates 2025 2026 2027 2028 2029
Ready to Serve
Fixed Monthly Rates
All Customers $41.70 $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Schools, 35% irrigation 4.09 4.26 4.60 4.97 5.32 5.69
Schools, 60% irrigation 3.04 2.62 2.83 3.06 3.27 3.50
Schools, 85% irrigation 0.91 0.98 1.06 1.14 1.22 1.31
Other Ready-to-Serve 0.48 0.66 0.71 0.77 0.82 0.88

27.66 57.22

61.72 65.00

67.47 69.74

70.21 71.53

79.40 85.78

89.44 106.81
112.00
$0
$20
$40
$60
$80
$100
$120
Survey of Monthly Single Family Wastewater Charges
Rates effective January 2025
Current
Proposed
July 1, 2025

27.67 Wastewater
Capacity Charge Study
March 1, 2025
DRAFT

27.68 27.69
March 1, 2025
City of Santa Cruz, Public Works Department
809 Center St., Rm 201
Santa Cruz, CA 95060
Attention: Kevin Crossley, Assistant Public Works Director / City Engineer Re: Wastewater Capacity Charge Study
Bartle Wells Associates is pleased to submit the attached Wastewater Capacity Charge Study. The study develops updated capacity charges designed to equitably recover the costs of wastewater system infrastructure and assets benefiting new development. Key objectives of the study include developing new capacity charges that recover the costs of capacity in the City’s wastewater system infrastructure, are fair and equitable to both existing customers and new connections, are based on industry standard methodology, and comply with all legal requirements.

The proposed wastewater capacity charges are higher than the City’s current charges but are in line with neighboring agencies. In future years, BWA recommends that the City adjust its capacity charges annually based on the change in the Engineering News-Record Construction Cost Index or other appropriate measure to account for construction cost inflation, with allowance for a multi-year adjustment if an annual update is ever deferred.

We have enjoyed working with the City and appreciate the ongoing collaboration, input and assistance received from City staff. Please contact me anytime if you have questions about this report or other issues related to utility rates, fees, and finances.

Sincerely,

BARTLE WELLS ASSOCIATES
Erik Helgeson, MBA
Principal / Vice President
2625 Alcatraz Ave, #602
Berkeley, CA 94705
Tel 510 653 3399
www.bartlewells.com

27.70 BARTLE WE LLS ASSOCIATES
Water & Wastewater Capacity Charge Study
Table of Contents

1. Background & Objectives ................................................................................................... 1

1.1. Background...............................................................................................................................1

1.2. Objectives.................................................................................................................................1

1.3. Proposed Charges.....................................................................................................................2

1.4. Survey of Regional Charges......................................................................................................3

2. Government Code & Fee Methodology............................................................................... 4

2.1. Government Code ....................................................................................................................4

2.2. General Fee Methodology........................................................................................................5

2.3. System Buy-In Approach ..........................................................................................................5

2.4. Asset Valuation Approach ........................................................................................................6

3. Wastewater Capacity Charges ............................................................................................ 7

3.1. Current Wastewater Capacity Charges....................................................................................7

3.2. Existing Wastewater System Facilities & Assets ......................................................................7

3.3. Existing Wastewater Collection Assets ....................................................................................7

3.4. Existing Wastewater Treatment Assets ...................................................................................8

3.5. Wastewater System Assets for Fee Recovery..........................................................................9

3.6. Current and Projected Wastewater System Capacity............................................................10

3.7. Wastewater System Cost Recovery per MEU ........................................................................11

3.8. Wastewater Capacity Charge Survey .....................................................................................12

4. Capacity Charge Application ..............................................................................................13

4.1. Capacity Charge Ordinances: Purpose of Charge...................................................................13

4.2. Use of Capacity Charge Revenues..........................................................................................13

4.3. Capacity Charge Credits for Redevelopment.........................................................................13

4.4. Future Fee Adjustments.........................................................................................................14 Appendices
Appendix A – Government Code Pertaining to Water & Wastewater Capacity Charges Appendix B – Wastewater Assets & Costs

27.71 BARTLE WE LLS ASSOCIATES
City of Santa Cruz Wastewater Capacity Charge Study
List of Tables
Wastewater Capacity Charge Tables
Table 1 – Proposed Wastewater Capacity Charges .............................................................................2 Table 2 – Current Wastewater Capacity Charges ................................................................................7 Table 3 – Wastewater Collection Assets Costs ....................................................................................8 Table 4 – WWTF Assets Costs...............................................................................................................9 Table 5 – Wastewater System Assets for Fee Recovery ......................................................................9 Table 6 – Current Meter Equivalent Units .........................................................................................10 Table 7 – Projected Wastewater Demand .........................................................................................11 Table 8 – MEU Fee Recovery for Wastewater System.......................................................................11 List of Figures
Wastewater Capacity Charge Figures
Figure 1 – Regional Wastewater Capacity Charge Survey ...................................................................3 Figure 2 – Wastewater Capacity Fee Methodology .............................................................................5 Figure 3 – Regional Wastewater Capacity Charge Survey .................................................................12

27.72 BARTLE WE LLS ASSOCIATES 1
City of Santa Cruz Wastewater Capacity Charge Study

1. Background & Objectives

1.1. Background
The City of Santa Cruz provides wastewater services to approximately 15,000 residential, commercial, and other non-residential connections. The City was incorporated in 1866 and is located on the northern part of the Monterey Bay approximately 74 miles south of San Francisco and 30 miles west of San Jose.

The City has an area of 12 square miles and an estimated population of 102,000. The City’s wastewater system includes 21 pump stations, over 160 miles of sewer pipe, and a wastewater treatment facility (WWTF). The WWTF treats more than 10 million gallons of wastewater each day, with approximately half of the waste generated within City limits and the other half generated by the Santa Cruz County and Sanitation District (SCCSD). Under the Joint Wastewater Treatment and Disposal Agreement between Santa Cruz County and Sanitation District and the City of Santa Cruz, SCCSD has contractual rights for approximately 8/17 of WWTF capacity and is responsible for paying for their proportional share of costs for the WWTF.

The City’s wastewater system is nearly fully developed (built-out) meaning new connections will largely be served by existing infrastructure. The majority of new connections within City limits is expected to come from planned multifamily housing units through redevelopment and land use intensification. The City levies wastewater capacity charges on new and expanded connections to the City’s wastewater system to recover the costs of infrastructure benefiting new development. The City’s current capacity charges were adopted by resolution in 2021 to capture major infrastructure upgrades made to the City’s WWTF and wastewater collection system which were not reflected in the previous capacity charge resolution adopted nearly twenty years prior in 2001.

1.2. Objectives
In 2024, the City retained Bartle Wells Associates to perform an independent evaluation of the City’s existing capacity charges and develop updated charges designed to reflect the current cost of infrastructure and help ensure that new and expanded connections pay for their share of capacity in the City’s wastewater system. The recommendations presented in this report were developed with substantial input from the City’s project team and include some fee structure adjustments to align fees with industry standard practices and methodologies.

Key objectives of the study include developing updated wastewater capacity charges that:
▪ Recover the current costs of wastewater system infrastructure and assets that benefit new development to help ensure that growth pays its own way;

27.73 BARTLE WE LLS ASSOCIATES 2
City of Santa Cruz Wastewater Capacity Charge Study
▪ Proportionally recover costs from new connections to the wastewater system based on the capacity needs of each new development;
▪ Are consistent with industry-standard practices and methodologies; ▪ Comply with the legal requirements of California Government Code.

1.3. Proposed Charges
The updated charges calculated in this report are based on a System Buy-In Approach under which new connections “buy in” for their proportionate share of costs (in current dollars) for capacity needed in the City’s existing wastewater system facilities and assets. A System Buy-In Approach is one of the most widely used and accepted methods for calculating capacity charges, particularly for agencies with utility infrastructure that is largely built out and has excess capacity available to serve growth.

Proposed wastewater capacity charges are shown on Table 1 and are applied by meter size to reflect differences in estimated wastewater discharge into the system based on the American Water Works Association (AWWA) maximum safe operating capacity standards.

Table 1 – Proposed Wastewater Capacity Charges
Connection Type Proposed Capacity Charge
All Customer Connection Types 1
Meter Size
5/8" $3,894
3/4" $5,841
1" $9,735
1 1/2" $19,471
2" $31,154
3" $68,148
4" $122,667
6" $253,123
1 Capacity charges for meter sizes greater than 6 inches will be determined by the Public Works Director.

27.74 BARTLE WE LLS ASSOCIATES 3
City of Santa Cruz Wastewater Capacity Charge Study

1.4. Survey of Regional Charges
In general, BWA recommends that capacity charges be independently reviewed and updated as needed approximately once every five years. The City last updated its wastewater system capacity charges in 2021. As shown on the following chart the City’s current capacity charges are nearly the lowest compared to other regional agencies surveyed.

While the proposed capacity charges developed in this study are higher than the City’s existing charges, they remain below the average charge among other regional agencies surveyed and are developed to reflect the current cost of infrastructure and help ensure that new and expanded connections pay for their share of capacity in the City’s wastewater system Figure 1 – Regional Wastewater Capacity Charge Survey
2,391
2,700
3,000
5,037
5,615
5,841
6,094
7,548
8,744
9,735
11,273
12,497
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Wastewater Capacity Charge Survey
Typical Single Family Residence (3/4" meter)
Capacity Charges effective February 2025
Current
Proposed
July 1, 2025

27.75 BARTLE WE LLS ASSOCIATES 4
City of Santa Cruz Wastewater Capacity Charge Study

2. Government Code & Fee Methodology

2.1. Government Code
Development impact fees are governed by California Government Code Section 66000 et seq. These provisions of the Government Code were initially established by Assembly Bill (AB) 1600 and are commonly referred to as the Mitigation Fee Act (Act). Pursuant to the Act, a development impact fee is not a tax or special assessment, but is, instead, a voluntary charge levied to defray the cost of public facilities needed to serve new development.

Capacity charges are not development impact fees, because they are not imposed as a condition of new development. As such, only a small portion of the Act applies to capacity charges, including Section 66013 of the Government Code, which specifically governs water and wastewater capacity charges. This section defines a “capacity charge” to mean “…a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged…” This section distinguishes “capacity charges” from “fees” which are defined as fees for the physical facilities necessary to make a water or sewer connection, such as costs related to installation of meters and pipelines from a new building to a water or sewer main.

According to Section 66013, a water or wastewater capacity charge “shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed” unless approved by a two-thirds vote of the electors. Section 66013 does not detail any specific methodology for calculating capacity charges.

Sections 66016 and 66016.6 of the Government Code identify the procedural requirements for adopting or increasing water and wastewater capacity charges, and Section 66022 summarizes the general process by which the charges can be legally challenged. The full text of Sections 66013, 66016, 66016.6 and 66022 are attached in Appendix A.

27.76 BARTLE WE LLS ASSOCIATES 5
City of Santa Cruz Wastewater Capacity Charge Study

2.2. General Fee Methodology
The general methodology used to calculate updated wastewater capacity charges in this report is summarized below.

Figure 2 – Wastewater Capacity Fee Methodology

2.3. System Buy-In Approach
Public agencies have used a wide range of methodologies to calculate capacity charges. BWA recommends continued use of a System Buy-In Approach, under which new connections “buy in” for their proportionate share of capacity needed in the City’s existing wastewater system facilities and assets.

The charge represents the average cost per unit of capacity in existing facilities and is calculated by dividing a) the cost of existing facilities and assets (in current, inflation-adjusted dollars) by b) the projected capacity that the City’s sewer facilities will serve. The resulting unit charges reasonably reflect the average cost of capacity in the City’s wastewater facilities and are subsequently applied to the estimated wastewater demands of new or expanded connections.

BWA believes that continued use of a System Buy-In Approach is appropriate for a number of reasons including:

Step 4 - Apply Cost per Unit to the Capacity Needs of New Development Apply the unit costs for capacity to the infrastructure capacity needs of each new development to determine an equitable capacity charge per new connection.

Step 3 - Calculate Cost per Unit of Capacity
Calculate the cost per unit of capacity by dividing the costs identified for fee recovery in Step 1 by the capacity of those facilities identified in Step 2.

Step 2 - Identify Capacity of Facilities
Identify the projected service capacity of facilities and assets identified in Step 1.

Step 1 - Determine Cost of Facilities & Assets for Fee Recovery Determine the recoverable cost of facilities and assets benefiting new development that will be recovered by each capacity charge.

27.77 BARTLE WE LLS ASSOCIATES 6
City of Santa Cruz Wastewater Capacity Charge Study
• The City’s existing wastewater infrastructure has significant excess capacity available to serve new development. While some improvements may be needed to increase the capacity of various system components or mitigate bottlenecks (depending on where growth occurs), the existing utility infrastructure is largely built out and capable of handling the capacity demands of growth for many years.
• A System Buy-In Approach is one of the most widely used and accepted approaches for calculating capacity charges, particularly for agencies with utility infrastructure that is largely built out and has excess capacity available to serve growth.
• This approach is consistent with the methodology used in the capacity charge calculation that formed the basis for the City’s current wastewater capacity charges.

2.4. Asset Valuation Approach
There are a number of widely-used methods for valuing infrastructure and assets for determining facility costs that will be recovered by capacity charges. The capacity charges calculated in this report determine wastewater system valuation based on Estimated Replacement Cost less Depreciation.

Replacement Cost New less Depreciation (RCNLD)
This approach takes into consideration the change in wastewater system assets over time. Under this approach, the current (or replacement) value of wastewater assets is estimated based on an inventory of existing wastewater collection and treatment assets and updated construction cost estimates (in current dollars). Depreciation takes into account the anticipated losses in system value caused by aging.

At the same time, this approach a) may underestimate the actual replacement cost of existing facilities, b) does not account for the theoretical cost of interest that future customers would have to repay existing customers for the implicit loan provided by existing customers prefunding facilities for growth, and c) does not account for the cost of maintaining capacity in existing infrastructure for growth.

27.78 BARTLE WE LLS ASSOCIATES 7
City of Santa Cruz Wastewater Capacity Charge Study

3. Wastewater Capacity Charges

3.1. Current Wastewater Capacity Charges
Table 2 shows a schedule of the City’s current wastewater capacity charges.

Table 2 – Current Wastewater Capacity Charges
(Effective July 1, 2021)
Meter Size 1 Current Fee
5/8" $2,400
3/4" 2,700
1" 4,500
1 1/2" 8,000
2" 12,800
3" 24,100
4" 40,100
6" 80,300
1 Capacity charges for meter sizes greater than 6 inches will be determined by the Public Works Director.

3.2. Existing Wastewater System Facilities & Assets
For purposes of estimating the current construction cost of the City’s wastewater system infrastructure, facilities are broken out into wastewater a) collection assets and b) treatment assets.

3.3. Existing Wastewater Collection Assets
The following table shows an inventory of sewer collection system assets along with current replacement cost estimates. Cost estimates per unit of measurement are based on estimates provided by the City’s Department of Public Works and based on wastewater construction projects from recent years. To provide recognition of the physical effects of aging, percent useful life remaining for each asset type is determined by dividing the average age of assets by type by their estimated useful life. This adjustment takes into account the anticipated reduction of asset wear, tear, and decay caused by aging to determine wastewater collection assets for fee recovery.

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City of Santa Cruz Wastewater Capacity Charge Study
Table 3 – Wastewater Collection Assets Costs
1 Includes only City-owned collection system assets.
2 Estimated replacement costs based on City of Santa Cruz sewer construction projects from recent years and cost estimates provided by the Department of Public Works.

3.4. Existing Wastewater Treatment Assets
The original WWTF was constructed in 1928, and the major construction projects that account for the majority of infrastructure currently in operation were completed in 1988 and 1998. In 2018, the City developed an infrastructure planning study which outlined construction costs needed to maintain the WWTF in safe operating condition. Under the Joint Wastewater Treatment and Disposal Agreement between Santa Cruz County and Sanitation District and the City of Santa Cruz, SCCSD has contractual rights for approximately 8/17 of WWTF capacity.

The following table shows an inventory of the WWTF assets along with replacement cost estimates in current dollars. Cost estimates are based on estimates provided by the City of Santa Cruz WWTF Infrastructure and Major Equipment Study escalated into current dollars using the Engineering NewsRecord Construction Cost Index (ENR-CCI) to account for construction cost inflation. To provide recognition of the physical effects of aging, percent useful life remaining for each asset type is determined by dividing the average age of assets by type by their estimated useful life. This adjustment takes into account the anticipated reduction of asset wear, tear, and decay caused by aging. To determine wastewater treatment assets for fee recovery, the estimated total construction cost of projects is further reduced to account for only the City’s share of WWTF capacity. This approach ensures that new connections buy-in for the full inflation-adjusted cost of facilities.

Asset
Type 1 Units
Unit
Measure
Replacement
Costs per
Unit 2
Total
Replacement
Costs
Useful
Life
Average
Age
Avg
% Life
Remaining
Adjusted
Replacement
Costs
Manholes 3,026 # $15,000 $45,390,000 70 52 25% $11,503,331 Vaults 7 # 25,000 175,000 70 34 51% 90,000
Pump Stations 25 # 1,500,000 37,500,000 70 48 31% 11,785,714 Pipelines 1,159,183 LF 350 405,713,957 70 57 19% 75,346,878 Total $488,778,957 $98,725,923

27.80 BARTLE WE LLS ASSOCIATES 9
City of Santa Cruz Wastewater Capacity Charge Study
Table 4 – WWTF Assets Costs
1 Original replacement cost estimates provided by the City of Santa Cruz Wastewater Treatment Facility Infrastructure and Major Equipment Study, escalated to 2024 dollars.
2 Remaining replacement cost estimates calculated by multiplying the full replacements costs by the average percent life remaining.

3.5. Wastewater System Assets for Fee Recovery
The following table shows total recoverable costs of wastewater system infrastructure accounting for both a) estimated current construction cost of sewer collection assets as shown above plus b) wastewater treatment assets escalated into current dollars based on the change in the ENR-CCI from 2018 to 2024. A detailed list of City wastewater assets and costs used for calculating cost recovery is included in Appendix B. Wastewater collection assets account for the majority of the costs of the City’s wastewater system. The system value is reduced to account for the City’s share of outstanding principal on wastewater debt which represents system costs that the City has not yet paid for.

Table 5 – Wastewater System Assets for Fee Recovery
Asset Description System Value for Capacity Charges
Asset Value
Treatment Assets 1 $42,223,192
Collection Assets 2 98,725,923
Total System Value 140,949,115
Less Outstanding Debt Principal 3(29,254,806)
Total Value of Assets for Capacity Charges $111,694,309 1 Replacement costs estimated by inflating the original cost by the change in the Engineering News-Record Construction Cost Index and adjusting for percent remaining asset life. Source: City of Santa Cruz Wastewater Treatment Facility Infrastructure and Major Equipment Study. 2 Replacement costs estimated based on City of Santa Cruz sewer construction projects from recent years and input from the Department of Public Works, adjusted for percent remaining asset life. Source: City of Santa Cruz Department of Public Works.
3 Source: City of Santa Cruz debt schedules.

WWTF Assets
Replacement
Costs 1
Avg % Life
Remaining
Adjusted
Replacement Costs 2
Influent 13,711,875 19% 2,618,927
Primary Treatment 36,426,585 35% 12,701,423
Secondary Treatment 60,323,472 31% 18,850,189
Disinfection/Disposal 24,608,439 24% 6,028,602
Solids Treatment/Disposal 91,211,986 26% 24,171,010
Site Utilities & Yard Piping 57,218,063 24% 13,813,186
Misc Buildings 6,167,336 25% 1,571,580
Total 289,667,754 79,754,918
City of Santa Cruz Portion (9/17) $153,353,517 $42,223,192

27.81 BARTLE WE LLS ASSOCIATES 10
City of Santa Cruz Wastewater Capacity Charge Study

3.6. Current and Projected Wastewater System Capacity
The next step in calculating capacity charges for the City’s wastewater system is to determine the current capacity of the system. Existing customer connections are converted into Meter Equivalent Units (MEUs) by meter size. The benefit of using MEUs is that they relate the relative capacity of connections by the American Water Works Association (AWWA) standards for maximum safe operating capacity by meter size. In short, using MEUs accounts for the relative capacity of connections with meters of various sizes and the likelihood of larger meters generating more wastewater discharge into the system. Since single family residences are the City’s primary wastewater connection type, and since current development requirements for new single family connections require a minimum ¾” meter, this study calculates the meter equivalent ratio based on a ¾” meter base. The meter ratio for all other meters is determined by dividing the capacity for that meter by the capacity for a ¾” meter

Table 6 summarizes the data used to determine the City’s current number of MEUs, which is reflective of the current capacity of the system.

Table 6 – Current Meter Equivalent Units
1 Based on the American Water Works Association (AWWA) maximum safe operating capacity.
2 This study assumes all existing 5/8" SRF connections have a 3/4" meter equivalency since current design requirements for new residential homes require 3/4" meters.

Table 7 projects the number of MEUs for the City’s future customer base through 2045 based on a) the City’s most recent population estimates and b) the City’s existing MEU count. The projections shown represent the total customer demand that the City’s wastewater system is projected to serve through 2045.

Meter Size
Number
of Meters
AWWA Meter
Capacity 1 Meter Ratio
Meter
Equivalents 2
5/8" 2,376 20 0.67 1,584
3/4" 11,718 30 1.00 11,718
1" 748 50 1.67 1,247
1 1/2" 233 100 3.33 777
2" 167 160 5.33 891
3" 25 350 11.67 292
4" 11 630 21.00 231
6" 1 1,300 43.33 43
8" 1 2,800 93.33 93
10" 2 4,200 140.00 280
Totals 15,282 17,155

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City of Santa Cruz Wastewater Capacity Charge Study
Table 7 – Projected Wastewater Demand
Customers Served
Population 2025 101,964
Population 2045 1 113,650
Population Increase % 11.5%
Current MEU 17,155
Population Increase % 11.5%
Projected 2045 MEUs 19,121
1 Projection based on the City of Santa Cruz 2020 Urban Water Management Plan.

3.7. Wastewater System Cost Recovery per MEU
Table 8 calculates an updated wastewater capacity charge by dividing a) the recoverable cost of wastewater system assets by b) the projected future capacity of the City’s wastewater system. The calculation results in a wastewater system capacity charge of $5,841 per MEU.

Table 8 – MEU Fee Recovery for Wastewater System
Capacity Charge Component Amount
System Cost Recovery $111,694,309
Projected 2045 MEUs 19,121
Capacity Charge per MEU $5,841

27.83 BARTLE WE LLS ASSOCIATES 12
City of Santa Cruz Wastewater Capacity Charge Study

3.8. Wastewater Capacity Charge Survey
In general, BWA recommends that capacity charges be independently reviewed and updated as needed approximately once every five years. The City last updated its wastewater system capacity charges in 2021. As shown on the following chart, the City’s current capacity charges are nearly the lowest compared to other regional agencies surveyed.

While the proposed capacity charges developed in this study are higher than the City’s existing charges, they remain below the average charge among other regional agencies surveyed and are developed to reflect the current cost of infrastructure and help ensure that new and expanded connections pay for their share of capacity in the City’s wastewater system Figure 3 – Regional Wastewater Capacity Charge Survey
2,391
2,700
3,000
5,037
5,615
5,841
6,094
7,548
8,744
9,735
11,273
12,497
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Wastewater Capacity Charge Survey
Typical Single Family Residence (3/4" meter)
Capacity Charges effective February 2025
Current
Proposed
July 1, 2025

27.84 BARTLE WE LLS ASSOCIATES 13
City of Santa Cruz Wastewater Capacity Charge Study

4. Capacity Charge Application
This section highlights some key issues regarding the application and implementation of capacity charges.

4.1. Capacity Charge Ordinances: Purpose of Charge
Pursuant to Government Code 66013, revenues derived from the City’s wastewater capacity charges can only be used for the purpose for which the charges are collected. In order to give the City maximum flexibility for use of capacity charge revenues, BWA recommends that the City’s ordinance broadly define the purpose of the capacity charges, such as to recover costs for capacity in wastewater system infrastructure benefiting new development.

4.2. Use of Capacity Charge Revenues
The proposed capacity charges recover costs for buying into capacity in existing wastewater facilities. As such, BWA believes capacity charge revenues can broadly be used to help fund any facilities and assets that support the provision of wastewater system capacity to new development. This can generally include:
• New facilities that increase system capacity (e.g. pipeline upsizings, wastewater treatment facility expansion, upgrades to increase solids handling capacity); • Replacement of existing facilities that provide system capacity (e.g. pipeline replacements, major equipment replacements, replacements of pump stations and sewer lift stations); • Other capital improvements that support the provision of system capacity (e.g. wastewater treatment facility electrical system upgrades that are needed to support reliable operations and use of treatment facility capacity);
• Debt service repayment for debt issued to fund any of the purposes listed above.

4.3. Capacity Charge Credits for Redevelopment
A significant share of future growth within the City is expected to come from redevelopment projects, which may include rebuilding, expanding, or converting existing buildings into new developments. For example, an existing warehouse may be torn down and redeveloped as a mixed-use residential and commercial development.

Capacity charges for redevelopment projects should be based on the incremental wastewater discharge generated from each project. As such, the capacity charges for a redevelopment project would be calculated based on a) capacity charges applied to the new redevelopment project, less b) a credit for capacity charges applied to the previously existing development, with all calculations based on the capacity charges in effect at the time of the fee calculation.

27.85 BARTLE WE LLS ASSOCIATES 14
City of Santa Cruz Wastewater Capacity Charge Study

4.4. Future Fee Adjustments
The proposed capacity charges are calculated based on the cost for buying-in to existing facilities and assets in current dollars. In future years, BWA recommends the City adjust its capacity charges annually or periodically based on the change in the ENR-CCI (20-Cities Average). This is a widely used practice for keeping capacity charges up-to-date and accounting for future construction cost inflation.

The capacity charge adjustment should be based on the change in the ENR-CCI used as basis for the preceding charge update. This allows for a multi-year fee adjustment if the City ever defers an annual adjustment. BWA recommends that the City’s capacity charge ordinance include language authorizing automatic annual fee adjustments along with the ability to implement a “catch-up” adjustment if an annual adjustment is ever deferred or only partially implemented.

In general, BWA recommends that capacity charges be independently reviewed and updated as needed approximately once every five years.

27.86 APPENDIX A
California Government Code:

Key Sections Pertaining to Wastewater Capacity Charges

27.87 California Government Code
Key Sections Pertaining to Water & Wastewater Capacity Charges Sections 66013, 66016, 66022 & 66023
This appendix includes the full text of key sections of California Government Codes pertaining wastewater capacity charges as of February 2025. Sections of Government Code are periodically amended which could result in changes to the legal requirements governing capacity charges. The City should consult its legal counsel for legal interpretations of Government Code or other legislation governing water and wastewater capacity charges.
66013
(a) Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewer connections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providing the service for which the fee or charge is imposed, unless a question regarding the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue. (b) As used in this section:
(1) “Sewer connection” means the connection of a structure or project to a public sewer system. (2) “Water connection” means the connection of a structure or project to a public water system, as defined in subdivision (h) of Section 116275 of the Health and Safety Code. (3) “Capacity charge” means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “capacity charge” does not include a commodity charge.
(4) “Local agency” means a local agency as defined in Section 66000. (5) “Fee” means a fee for the physical facilities necessary to make a water connection or sewer connection, including, but not limited to, meters, meter boxes, and pipelines from the structure or project to a water distribution line or sewer main, and the estimated reasonable cost of labor and materials for installation of those facilities bears a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the water connection or sewer connection.

27.88 (6) “Public facilities” means public facilities as defined in Section 66000. (c) A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid any commingling with other moneys of the local agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected. Any interest income earned from the investment of moneys in the capital facilities fund shall be deposited in that fund.
(d) For a fund established pursuant to subdivision (c), a local agency shall make available to the public, within 180 days after the last day of each fiscal year, the following information for that fiscal year:
(1) A description of the charges deposited in the fund. (2) The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund.
(3) The amount of charges collected in that fiscal year. (4) An identification of all of the following:
(A) Each public improvement on which charges were expended and the amount of the expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used. (B) Each public improvement on which charges were expended that was completed during that fiscal year.
(C) Each public improvement that is anticipated to be undertaken in the following fiscal year. (5) A description of each interfund transfer or loan made from the capital facilities fund. The information provided, in the case of an interfund transfer, shall identify the public improvements on which the transferred moneys are, or will be, expended. The information, in the case of an interfund loan, shall include the date on which the loan will be repaid, and the rate of interest that the fund will receive on the loan.
(e) The information required pursuant to subdivision (d) may be included in the local agency’s annual financial report.
(f) The provisions of subdivisions (c) and (d) shall not apply to any of the following:

27.89 (1) Moneys received to construct public facilities pursuant to a contract between a local agency and a person or entity, including, but not limited to, a reimbursement agreement pursuant to Section 66003.
(2) Charges that are used to pay existing debt service or which are subject to a contract with a trustee for bondholders that requires a different accounting of the charges, or charges that are used to reimburse the local agency or to reimburse a person or entity who advanced funds under a reimbursement agreement or contract for facilities in existence at the time the charges are collected.
(3) Charges collected on or before December 31, 1998.
(g) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion imposing a fee or capacity charge subject to this section shall be brought pursuant to Section 66022.
(h) Fees and charges subject to this section are not subject to the provisions of Chapter 5 (commencing with Section 66000), but are subject to the provisions of Sections 66016, 66022, and 66023.
(i) Subdivisions (c) and (d) only apply to capacity charges levied pursuant to this section. (Amended by Stats. 2020, Ch. 370, Sec. 180. (SB 1371) Effective January 1, 2021.) 66016
(a) Prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting. Notice of the time and place of the meeting, including a general explanation of the matter to be considered, and a statement that the data required by this section is available, shall be mailed at least 14 days prior to the meeting to any interested party who files a written request with the local agency for mailed notice of the meeting on new or increased fees or service charges. Any written request for mailed notices shall be valid for one year from the date on which it is filed unless a renewal request is filed. Renewal requests for mailed notices shall be filed on or before April 1 of each year. The legislative body may establish a reasonable annual charge for sending notices based on the estimated cost of providing the service. At least 10 days prior to the meeting, the local agency shall make available to the public data indicating the amount of cost, or estimated cost, required to provide the service for which the fee or service charge is levied and the revenue sources anticipated to provide the service, including General Fund revenues. Unless there has been voter approval, as prescribed by Section 66013 or 66014, no local agency shall levy a new fee or service charge or increase an existing fee or service charge to an amount which exceeds the estimated amount required to provide the service for which the fee or service charge is levied. If, however, the fees

27.90 or service charges create revenues in excess of actual cost, those revenues shall be used to reduce the fee or service charge creating the excess.
(b) Any action by a local agency to levy a new fee or service charge or to approve an increase in an existing fee or service charge shall be taken only by ordinance or resolution. The legislative body of a local agency shall not delegate the authority to adopt a new fee or service charge, or to increase a fee or service charge.
(c) Any costs incurred by a local agency in conducting the meeting or meetings required pursuant to subdivision (a) may be recovered from fees charged for the services which were the subject of the meeting.
(d) This section shall apply only to fees and charges as described in Sections 51287, 56383, 65104, 65456, 65584.1, 65863.7, 65909.5, 66013, 66014, and 66451.2 of this code, Sections 17951, 19132.3, and 19852 of the Health and Safety Code, Section 41901 of the Public Resources Code, and Section 21671.5 of the Public Utilities Code.
(e) Any judicial action or proceeding to attack, review, set aside, void, or annul the ordinance, resolution, or motion levying a fee or service charge subject to this section shall be brought pursuant to Section 66022.
(Amended by Stats. 2006, Ch. 643, Sec. 19. Effective January 1, 2007.) 66016.6
(a) Prior to levying a new fee or capacity charge, a local agency shall evaluate the amount of the fee or capacity charge. The evaluation shall include evidence to support that the fee or capacity charge does not exceed the estimated reasonable cost of providing service, in accordance with Section 66013.If an ordinance, resolution, or motion provides for an automatic adjustment in a fee or service charge, and the automatic adjustment results in an increase in the amount of a fee or service charge, any action or proceeding to attack, review, set aside, void, or annul the increase shall be commenced within 120 days of the effective date of the increase.
(b) All information constituting the evaluation shall be made publicly available at least 14 days prior to a meeting held in accordance with subdivision (a) of Section 66016. (c) For purposes of this section:
(1) “Capacity charge” has the same meaning as defined in Section 66013. (2) “Fee” has the same meaning as defined in Section 66013. (3) “Local agency” has the same meaning as defined in Section 66013.

27.91 (d) Nothing in this section shall be construed to relieve a local agency of the requirement that it comply with Chapter 7 (commencing with Section 66012), the California Constitution, or applicable case law when calculating the amount of a fee.
(Added by Stats. 2022, Ch. 128, Sec. 2. (AB 2536) Effective January 1, 2023.) 66022
(a) Any judicial action or proceeding to attack, review, set aside, void, or annul an ordinance, resolution, or motion adopting a new fee or service charge, or modifying or amending an existing fee or service charge, adopted by a local agency, as defined in Section 66000, shall be commenced within 120 days of the effective date of the ordinance, resolution, or motion.

If an ordinance, resolution, or motion provides for an automatic adjustment in a fee or service charge, and the automatic adjustment results in an increase in the amount of a fee or service charge, any action or proceeding to attack, review, set aside, void, or annul the increase shall be commenced within 120 days of the effective date of the increase.
(b)Any action by a local agency or interested person under this section shall be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. (c) This section shall apply only to fees, capacity charges, and service charges described in and subject to Sections 66013, 66014, and 66016.
(Amended by Stats. 2006, Ch. 643, Sec. 20. Effective January 1, 2007.)

27.92 66023
(a) (1) Except as otherwise provided in paragraph (3), a person may request an audit in order to determine all of the following:
(A) Whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product, public facility, as defined in Section 66000, or service provided by the local agency.
(B) When the revenue generated by a fee or charge is scheduled to be expended. (C) When the public improvement is scheduled to be completed. (2) (A) Except as provided in subparagraph (B), if a person makes a request pursuant to paragraph (1), the legislative body of the local agency may retain an independent auditor to conduct an audit to determine whether the fee or charge is reasonable, when the revenue generated by a fee or charge is scheduled to be expended, and when the project is scheduled to be completed. (B) The legislative body is not required to conduct the audit if an audit has been performed for the same fee within the previous 12 months.
(3) Subparagraphs (B) and (C) of paragraph (1) shall not apply to a fee subject to Section 66013. (b) To the extent that the audit determines that the amount of any fee or charge does not meet the requirements of this section, the local agency shall adjust the fee accordingly. This subdivision does not apply to a fee authorized pursuant to Section 17620 of the Education Code, or Sections 65995.5 and 65995.7.
(c) Except as otherwise provided in subdivision (h), the local agency shall retain an independent auditor to conduct an audit only if the person who requests the audit deposits with the local agency the amount of the local agency’s reasonable estimate of the cost of the independent audit. At the conclusion of the audit, the local agency shall reimburse unused sums, if any, or the requesting person shall pay the local agency the excess of the actual cost of the audit over the sum which was deposited. (d) Any audit conducted by an independent auditor to determine whether a fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of providing the product or service shall conform to generally accepted auditing standards. (e) The procedures specified in this section shall be alternative and in addition to those specified in Section 54985.

27.93 (f) The Legislature finds and declares that oversight of local agency fees is a matter of statewide interest and concern. It is, therefore, the intent of the Legislature that this chapter shall supersede all conflicting local laws and shall apply in charter cities.
(g) This section shall not be construed as granting any additional authority to any local agency to levy any fee or charge which is not otherwise authorized by another provision of law, nor shall its provisions be construed as granting authority to any local agency to levy a new fee or charge when other provisions of law specifically prohibit the levy of a fee or charge. (h) Notwithstanding subdivision (c), if a local agency does not comply with subdivision (b) of Section 66006 for three consecutive years, both of the following shall apply:
(1) The local agency shall not require a deposit for an independent audit requested pursuant to this section and shall pay the cost of the audit.
(2) The independent audit conducted shall include each consecutive year the local agency did not comply with subdivision (b) of Section 66006.
(Amended by Stats. 2023, Ch. 741, Sec. 3. (AB 516) Effective January 1, 2024)

27.94 APPENDIX B
Wastewater Assets & Costs

27.95 Appendix B, WWTF Assets City of Santa Cruz Draft Wastewater Capacity Charge Study Wastwater Treatment Facility Assets
Replacement
Costs 1
Avg % Life
Remaining
Adjusted Replacement
Costs 2
Influent
Septage $1,964,508 24% $474,151
Influent Pump Station Bar Screens 4,706,758 18% 843,173 Influent Pump Station 7,040,609 18% 1,301,603
Influent Totals: 13,711,875 2,618,927
Primary Treatment
Pre-Aeration / Grit Removal 17,549,947 29% 5,156,055
Primary Sedimentation 18,876,638 40% 7,545,368
Primary Treatment Totals: 36,426,585 12,701,423
Secondary Treatment
Secondary Interstage Pumping 11,228,794 35% 3,922,588
Trickling Filters 18,095,240 26% 4,738,144
Solids Contact Tank 13,997,765 39% 5,455,267
Secondary Equipment Gallery 9,338,668 27% 2,522,552
Secondary Clarifier No. 1 3,292,235 40% 1,326,639
Secondary Clarifier No. 2 1,259,825 32% 407,285
Secondary Clarifier No. 3 3,110,946 15% 477,715
Secondary Treatment Totals: 60,323,472 18,850,189
Disinfection/Disposal
UV Disinfection 13,489,792 21% 2,868,751
Effluent Pump Station 11,118,647 28% 3,159,851
Disinfection/Disposal Totals: 24,608,439 6,028,602
Solids Treatment/Disposal
Sludge Thickening 7,077,929 16% 1,098,854
Sludge Feed Tank 1,697,044 27% 453,029
Digester 1 7,174,470 21% 1,539,404
Digester 2 3,372,189 41% 1,398,779
Digester 3 3,983,830 41% 1,620,887
Digester 4 11,805,836 44% 5,252,013
Digester 5 7,308,720 38% 2,757,697
Solids Dewatering 23,489,861 25% 5,868,058
Cogeneration/Heat Recovery System 25,302,107 17% 4,182,289 Solids Treatment/Disposal Totals: 91,211,986 24,171,010 Site Utilities & Yard Piping
Effluent Filtration 2,576,149 15% 376,444
Non Potable Water Tank/Chlorination Bldg 3,314,783 20% 667,362 Flow Meter Vault 274,720 36% 100,040
Odor Control 2,687,592 55% 1,484,655
Standby Generators 15,765,303 6% 892,840
Power Generation\Administration Building 13,689,353 31% 4,199,589 Site Utilities/Yard Piping 18,910,164 32% 6,092,256
Site Utilities and Yard Piping Totals: 57,218,063 13,813,186 Misc Buildings
Operations Building 2,900,759 25% 712,458
Locker & Garage Building 984,846 42% 411,562
Maintenance/Fab/Electrical Building 2,281,732 20% 447,560 Misc Buildings Totals: 6,167,336 1,571,580
Total 289,667,754 79,754,918
City of Santa Cruz Portion (9/17) $153,353,517 $42,223,192 1 Original replacement cost estimates provided in 2018 dollars (ENR 11,062) by the City of Santa Cruz Wastewater Treatment Facility Infrastructure and Major Equipment Study, escalated to 2024 dollars (ENR 13,571.30). 2 Remaining replacement cost estimates calculated by multiplying the full replacements costs by the average percent

27.96 City of Santa Cruz Public Works
Prop. 218 Notice of Proposed Wastewater Rate Increase
February 2025
Maintaining Our Wastewater System
Every day, residents of the City of Santa Cruz generate approximately 5 million gallons of wastewater from sinks, showers, toilets, washing machines, and dishwashers. It flows from homes and businesses through the wastewater collections system that is made up of 160 miles of pipe to the award-winning Wastewater Treatment Facility. In maintaining this collections system, City crews annually clean nearly 100 miles of pipeline and replace up to 5,000 feet of old pipe. They constantly service 21 pump stations.

Upon arrival at the Wastewater Treatment Facility, an environmentally-friendly process is used to treat the wastewater to secondary standards meeting all regulatory requirements.

Operating equipment includes pre-aeration grit removal tanks, sedimentation tanks, trickling filters, anaerobic digesters, secondary clarifiers, centrifuges and an ultraviolet disinfection system. This complex processing system requires continual service.

In order to maintain the Wastewater Treatment Facility and collections system that provide our community with an essential quality-of-life service, the City of Santa Cruz is proposing a wastewater rate increase. The new rates will support the replacement of aging treatment facility equipment and sanitary sewer pipes, as well as the estimated annual increase in costs for labor, materials, energy and outside services.

City of Santa Cruz Public Works
809 Center Street, Room 201
Santa Cruz, CA 95060
cityofsantacruz.com/publicworks

PRSRT STD
U.S. POSTAGE

PAID SANTA

CRUZ, CA
PERMIT #505
Environmental Stewardship
The Santa Cruz Wastewater Treatment Facility produces 68% of the energy it uses, which saves customers money and helps reduce the city’s carbon footprint. The plant generates green power from on-site biogas and solar energy systems. These energy-saving achievements have earned us recognition as an Environmental Protection Agency Green Power Partner.

The daily plant flow of about 10 million gallons is enough to fill over 15 Olympic-size pools. Five million gallons are generated within the city and the remainder comes from the Santa Cruz County Sanitation District including Live Oak, Capitola, Soquel and Aptos. The facility is a regional partner with Soquel Creek Water District, providing 2.92 million gallons per day of source water for the district’s Pure Water Soquel Water Purification Center, which is used to recharge the critically over drafted Mid-County Groundwater Basin.

Treated water that is not re-used on site is released through an ocean outfall pipe approximately 1 mile off shore of Mitchell’s Cove and far below the ocean’s surface. The plant’s state-of-the-art treatment ensures that the water entering Monterey Bay is safe and clean for all forms of life.

Environmental stewardship extends further as centrifuges remove water from biosolids which are then transported to the Central Valley for use as soil amendment on nonfood crops.

Notice of Public Hearing
The Santa Cruz City Council will hold a public hearing on the proposed wastewater rate increases Tuesday, June 10, 2025, after 10 a.m. | City Council Chambers, 809 Center Street Written protests: Any property owner or a tenant may submit a written protest for the proposed wastewater rate increase. A failure to timely object in writing bars any right to challenge the proposed wastewater increase in a legal proceeding. Only one written protest per parcel, filed by an owner or a tenant who is a customer, will be counted. Only written and signed protests that include the writer’s address and/or assessor parcel number will be counted to determine whether a majority protest to the proposed wastewater rate increase exists. Pursuant to Government Code Section 53759, a 120-day statute of limitations applies for any judicial action or proceeding challenging any new, increased, or extended sewer fee or charge. Written protests may be mailed or hand delivered to the Mayor and Council of Santa Cruz at 809 Center Street, Room 10, Santa Cruz, CA 95060.

If you oppose the proposed rate increases, Proposition 218 requires that your protest be submitted in writing to be counted, even if you plan to attend the Public Hearing. To be counted, the protest must: 1) be in writing; 2) object to the proposed rate increase and specify the grounds for alleging that the proposed rate increase does not comply with Article XIII D of the California Constitution; 3) identify the parcel by assessor’s parcel number or street address; 4) include the printed name and original signature of the owner of record or a tenant who is a customer; 5) be received before the conclusion of the Public Hearing after the hour of 10 a.m. on June 10, 2025. For more information, visit cityofsantacruz.com/sewer-rates

27.97 Date New Rate Will Appear on Bill Current Rates July 1, 2025 July 1, 2026 July 1, 2027 July 1, 2028 July 1, 2029 Percent Increase 8% 8% 8% 7% 7%
Customer Classification Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Fixed
Monthly
Rate
Quantity
Rate
$/CCF
Residential (Per Dwelling Unit)
Single Family $65.00 N/A $69.74 N/A $75.32 N/A $81.35 N/A $87.04 N/A $93.13 N/A Multi-Family $53.10 N/A $57.58 N/A $62.19 N/A $67.17 N/A $71.87 N/A $76.90 N/A Low Sewage Producers $38.20 N/A $41.94 N/A $45.30 N/A $48.92 N/A $52.34 N/A $56.00 N/A Commercial
Low Strength Varies $4.88 $47.71 $5.25 $51.53 $5.67 $55.65 $6.12 $59.55 $6.55 $63.72 $7.01 Medium Strength Varies $4.99 $47.71 $5.79 $51.53 $6.59 $55.65 $7.12 $59.55 $7.62 $63.72 $8.15 High Strength Varies $10.82 $47.71 $12.22 $51.53 $13.61 $55.65 $14.70 $59.55 $15.73 $63.72 $16.83 Industrial and Other
UCSC - Main Campus $66,886.30 $10.66 $71,471.30 $11.58 $77,189.00 $12.51 $83,364.12 $13.51 $89,199.61 $14.46 $95,443.58 $15.47 Graham Hill Water Treatment Plant $5,511.40 $16.70 $3,150.03 $19.30 $3,402.03 $20.84 $3,674.19 $22.51 $3,931.38 $24.09 $4,206.58 $25.78 Landfill Leachate $2,769.40 $8.51 $3,071.12 $9.09 $3,316.81 $9.82 $3,582.15 $10.61 $3,832.90 $11.35 $4,101.20 $12.14 Industrial $238.40 $6.70 $252.30 $7.25 $272.48 $7.83 $294.28 $8.46 $314.88 $9.05 $336.92 $9.68 Septage N/A $100.99 N/A $109.07 N/A $117.80 N/A $127.22 N/A $136.13 N/A $145.66 Why Are Rate
Increases Needed?
The proposed rate increases
are essential to sustain the
city’s wastewater system, which
faces mounting challenges
from aging infrastructure and
rising operational costs. Critical
components, such as pipelines
and parts of the treatment plant,
have outlived their service life and
urgently need replacement.

Although city staff have diligently
maintained and repaired essential
equipment, the last major upgrade
to the wastewater plant was over
30 years ago. A recent study of
over 2,000 assets has identified
hundreds that must be replaced
within the next five years, with
several large-scale projects
already underway, including a $20
million project in construction and
a $50 million electrical system
overhaul. As the treatment plant is
a regional facility, city rate payers
will fund approximately half of
these costs.

The proposed rates also address
the escalating costs of labor,
materials, energy, and outside
services, which are expected to
rise by 3-4% annually. To continue
providing reliable wastewater
services, safeguard public health,
and protect the city’s quality of life,
these rate adjustments are not just
necessary —they are crucial.

For more information, visit
cityofsantacruz.com/sewer-rates
Wastewater Rates
All rates are determined on a cost-of-service basis.

Residential Rates
Residential rates are fixed and do not change month-to-month. Although a flat rate is used, the rate is based on the average amount of sewage generated by that user type.

Low Sewage Producer = Low Rate
The City of Santa Cruz offers a low sewage producer rate. To qualify as a residential “low sewage producer,” the customer — whether multi- or single family — must have an average water use of 2.25 CCF (or less) per dwelling unit during four of the five service periods from December to April with the highest use month deleted from the average. (1 CCF = 100 cubic feet or 748 gallons.)
Check your most recent utility bill to determine if you are a “low sewage producer.” If your rate is $38.20 (not the regular $65.00 or $53.10 service charge), you are currently a “low sewage producer.”
You must qualify each May for the low rate based on the formula above. The City reviews all utility bills and automatically enrolls those who qualify for these low rates.

Commercial Rates
All commercial users are charged a flat monthly fee plus a quantity charge based on water use. Commercial users are classified as low, medium, or high strength depending on the strength of their wastewater.

Survey of Monthly Single Family Wastewater Charges
Proposed Wastewater Rates

27.98 City of Santa Cruz
2024 Wastewater Rate Study
March 25, 2025

27.99 Presentation
Overview
Wastewater Enterprise Overview
Rate Study Process & Proposition 218
Financial Drivers
Financial Projections
Rate Recommendations
Next Steps
Questions and Discussion
2 27.100
Wastewater
Enterprise
Overview
• Sewer utility is a financially self-supporting
enterprise
• Rates are the main source of revenues
• Rates need to be set at levels adequate to fund
the cost of providing service
• Wastewater Treatment Facility (WWTF)
o Serves over 130,000 City and County residents
o Treats 10 million gallons of sewage per day
• 24,000 customer accounts
o Residential: 22,700 accounts (95%)
o Commercial/Other: 1,300 accounts (5%)
3 27.101
Rate Study
Objectives
Financial Sufficiency
Legal Compliance (Prop. 218)
Rates Aligned with City Objectives
Minimize the Impact on Ratepayers
4 27.102
Rate Study Process
Project
Initiation
Customer
Analysis
Financial
Plan
Cost
Allocation
Rate
Design
Prop. 218
Process
5 27.103
Wastewater
Capital
Improvement
Planning
Efforts
• Projected 5-Year Capital Costs: $56 million
6 $26.8
$15.4
$6.9 $5.3
$14.0 $14.8
$0
$5
$10
$15
$20
$25
$30
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Treatment Plant
Collection System
Wastewater Capital Improvements ($ millions)
Source: City of Santa Cruz CIP; future $ includes 4.0% annual construction cost inflation, excludes Santa Cruz County share of Wastewater 27.104 Treatment Facility projects.

Financial
Drivers
•Aging infrastructure & capital
improvements
•Debt service
•Operating cost inflation
•Maintain prudent fund reserves
7 27.105
Rate
Increases
• BWA developed financial projections to identify
future funding needs & evaluate rate increases
• Proposed rate increases phased in over 5 years
8 July 1
2025
July 1
2026
July 1
2027
July 1
2028
July 1
2029
Rate Revenue
Increase (%): 8%* 8% 8% 7% 7%
Total Rate
Revenue
($millions):
$27.8 $25.9 $28.3 $30.6 $33.0
*Initial bill impacts will vary based on customer class and usage due to rate structure adjustments realigning rates with cost of service

27.106
Wastewater
Enterprise
Cashflow
9 $0
$10
$20
$30
$40
$50
$60
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
City of Santa Cruz
Projected Wastewater Revenues & Expenses ($ millions)
Rate increases phased in over 5 years to support
future funding needs & balanced budgets

27.107

Commercial
Fixed Monthly Rates
All Customers Varies $47.71 $51.53 $55.65 $59.55 $63.72 Quantity Rates ($ per ccf)
Low Strength 4.88 5.25 5.67 6.12 6.55 7.01
Medium Strength 4.99 5.79 6.59 7.12 7.62 8.15
High Strength 10.82 12.22 13.61 14.70 15.73 16.83
Current Projected Wastewater Rates Effective July 1
Rates 2025 2026 2027 2028 2029
Residential
Fixed Monthly Rates (per Dwelling Unit)
Single Family $65.00 $69.74 $75.32 $81.35 $87.04 $93.13 Multi-Family 53.10 57.58 62.19 67.17 71.87 76.90
Low Sewage Producer 38.20 41.94 45.30 48.92 52.34 56.00 Proposed Residential & Commercial Rate Schedules

27.108
11 Monthly Residential Sewer Rate Survey
Average Single Family Residential Water Use: 5.3 CCF
Note: Other agencies have adopted or are anticipating rate increases in upcoming years 57.22 61.72 65.00 67.47 69.74 70.21 71.53 79.40

85.78 89.44
106.81
112.00
$0
$20
$40
$60
$80
$100
$120
Survey of Monthly Single Family Wastewater Charges
Rates effective January 2025
Current
Proposed
July 1, 2025

27.109
Rate
Affordability
•Utility Customer Assistance Program (UCAP)
o $25 credit to entire SCMU bill
o Launched in March 2025, Outreach will begin in
April 2025
o Other UCAP Offerings:
• Late Payment Fee Waiver
• Leak Detection Assistance
• Future Dated Payment Arrangement
•Low Sewage Producer Rate
o Single-Family bill reduced by $27.80

27.110
Next Steps
13 TPWC
Meeting

2.24.25 City
Council
Meeting

3.25.25 Send Prop.
218
Notices by

4.25.25 Prop. 218
Notice
Period
April –
June 2025
Public
Hearing

6.10.2025
Rates
Effective

7.1.25 27.111

BARTLE WELLS
ASSOCIATES 27.112

28.1 28.2

28.3 29.1

29.2 29.3

29.4 29.5

29.6 29.7

29.8 29.9

29.10 29.11

29.12 29.13

29.14 29.15

29.16 29.17

29.18

Santa Cruz City CouncilMarch 25, 2025

Santa Cruz City Council
March 25, 2025