BPU
Budget
Subcommittee
Fiscal Year 2025/26 Preliminary Review
March 10, 2025
1 Nick Harvey
Deputy Director Administration
Fund Overview
• Water
• Wastewater
• Regional
• Storm Water
Water Enterprise Funding
Water Enterprise Fiscal Year 2023-24
• Funded by
• Rates – $47.3m
• Approximately 54,000 water accounts
• Water usage and fixed rates
• Varied tiers
• Fees – $12.2m
• Demand fees
• Miscellaneous fees
3 Wastewater Enterprise Funding
Wastewater Enterprise Fiscal Year 2023-24
• Funded by
• Rates – $72.1m
• Approximately 50,000 sewer accounts
• Sewer usage and fixed rates
• Single tier rate – varies by strength of discharge
• Fees – $16.9m
• Demand fees
• South Park Sanitation maintenance
• Miscellaneous fees
4 Regional Water Reuse Funding
Regional Enterprise
• Funded by five partner agencies
• Operating costs distributed based on flow
• Debt service payments are calculated based on when debt was incurred and type of project
• CIP costs distributed per the Partner Agreement
• Santa Rosa’s share is paid by the Wastewater Fund
5 Storm Water Funding
Storm Water Enterprise
• In 1996, City Council added Title 16 to the City Code creating a storm water enterprise
• To comply with the MS4 National Pollutant Discharge Elimination System (NPDES) permit requirements
• To reduce flooding, property damage, erosion, and storm water degradation in the City
• Annual parcel assessment for creek restoration, water quality improvement, and drainage improvements
• Supplemental funding provided by City’s General Fund (increasingly limited) • Capital Improvement Program (CIP) supplemental funding from Capital Facilities Fees, Gas Tax, and Grants
6 Storm Water Assessment
• Funding used for regulatory compliance
• Funding is insufficient for infrastructure improvements • Funding split is Storm Water 47%, Creeks 53%
• Annual escalator based on Consumer Price Index (CPI)
• FY 2024/25 - $41.34 per equivalent residential unit billed with property taxes by Sonoma County Assessor
7 Regulatory Requirements
• Water and sewer rate payer funding governed by Proposition 218 • May not intermingle funds
• May not subsidize customers
• Must charge for cost for services
• Rates approved through public hearing process
• Regional funding
• Santa Rosa pays from sewer rate payer funds
• Governed by the Subregional Agreement
• Storm Water funding
• Allowed for both Storm Water and Creeks
• Vote required to increase other than approved CPI
Annual Budget - Water Enterprises
• 2024/25
• $156 M
• $104M Operations &
Maintenance (O&M)
• $24M Capital Improvement
Projects (CIP)
• $28M Debt Service
• Majority of debt service in the
Regional Fund
9 Annual Budget - Storm Water Enterprise
• 2024/25
• $4.8M
• $3.1M Operations & Maintenance
(O&M)
• $1.7M Capital Improvement Projects
(CIP)
• $850K Storm Water funded
• $850K outside funding sources
10 11
Water 2024/25 O&M Budget Distribution by
Expenses
Total O&M
Water, Wastewater,
Regional
$107.8M
Storm Water $3M
Budget
Overview
12 Expected/Known Increases
Staff Assumptions
Purchase of Water
Projected Revenues
Reserves
Preliminary CIP Funding
Budget Schedule
Expenditure Increases
• Salary Increases
• 9% Across-the-board
• Accounts for 4% COLA and Maximum 5% Equity for Class & Comp • Insurance
• Electricity
• Water Purchase
• Software as a Service (SaaS)
13 Staff Assumptions
• Water and Wastewater use projected to increase 1.1%
• 1.1% growth assumption, flat demand – Consistent with 2024 Water and Wastewater rate study
• Development will remain stable, strong interest earnings • Rates will increase per current proposals – Public Hearing April 1 14 Purchase
of Water
15 • Growth only, no demand increase
Volume of water increasing by 1.1%
• Tentatively 8.68%
Sonoma Water rate increase
Revenue
16 Water Revenue Increasing
• Increasing volume 1.1%
• Rate increase 6%
Sewer Revenue Increasing
• Rate increase 5%
• More stable than water due to sewer caps
Regional Revenues
• Trucked waste tipping revenues increasing
• Upward adjustments made to budgeted
Interest and Miscellaneous Revenues
Reserves
as of June 30, 2024
17 • Operating
• $1,931,149
• Catastrophic
• $6,800,000
• Undesignated
• $14,759,869
• +$1,075,173
• Rate Stabilization
• $1,000,000
• Operating
• $6,053,551
• Catastrophic
• $1,700,000
• Refund Reserve
• $8,816,830
• +$5.9 mil
• Geysers
• $1,250,000
• Operating
• $6,132,512
• Catastrophic
• $5,750,000
• Undesignated
• $15,362,931
• +$470,687
Water Wastewater Regional CIP Funding
• Rate proposals allow for return to planned CIP appropriations in 2025/26
• Planned Funding
• Water - $15.5M
• Wastewater - $14.3M
• Regional - $12M
18 Budget Schedule
• City Council – April 7th
• Sonoma Water Rate Increase
• Regional Partners – March 13th & April 3rd
• BPU Budget Subcommittee – March 26th
• BPU – April 3rd
• O&M, CIP and Regional Study Session
• BPU – April 17th
• Budget Recommendation to City Council
• City Council – April 15th
• Preliminary approval of Regional Budget
• City Council – May 6th & 7th
• Budget Study Sessions
• City Council – June 17th
• Budget Adoption Hearings
DISCUSSION /
QUESTIONS?
20 CONNECT WITH US!
CALL: 707.543.4200
EMAIL: SRWATER@SRCITY .ORG
VISIT: SRCITY .ORG/WATER
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