Sonoma County Water
Agency Proposed Fiscal Year
2025/26 Water Transmission
Budget and Rate Increase
City Council Meeting
March 18, 2025
Nick Harvey, Deputy Director Administration
1 Clean. Reliable. Essential. Every day.
sonomawater.org
FY 2025-2026
Proposed Budget and Rates
Water Transmission System
Lynne Rosselli
FINANCIAL SERVICES
DIVISION MANAGER
[email protected]
Jake Spaulding
FINANCE MANAGER
[email protected]
2 3
Transparent and collaborative process to bring
rates to Board of Directors by end of April
Sonoma
Water Board
of Directors
(April)
Water
Advisory
Committee
(April)
Water
Contractor
Boards &
Councils
(March)
Technical
Advisory
Committee
(Jan-March)
sonomawater.org
5 Budget includes multiple water transmission
system activities and funds
• Operations and Maintenance
• Four Subfunds
• Five Capital Funds
• Debt Service Funds
sonomawater.org
6 Asset Condition Assessment
• majority of facilities are
now 45-65 years old
• 40% of our infrastructure
assets currently have only
10 – 20% of their useful life
remaining
• Consequence of failure is
high
sonomawater.org
7 Highlights of Sonoma Water and Water Contractor
Achievements and Collaborations
• Santa Rosa Plain Wells
• Regional Water Supply Resiliency
• Hazard Mitigation Projects
• Sonoma-Marin Saving Water
Partnership – Drought Resiliency
• Water Education Program
• Dry Creek Habitat Enhancement
Highlights of Programs Funded from Other Sources
• Forecast Informed Reservoir Operations
• Advanced Quantitative Precipitation Information Systems • Quagga and Zebra Mussels
8 Ely BPS Flood Control & Electrical Upgrade
River Diversion Structure (RDS) Upgrade Project
Santa Rosa Creek Crossing
Seismic Retrofit of Storage Tanks
Wilfred Booster Station
$8.31 million budgeted for hazard mitigation
projects to reduce risks
9 $9.97 million budgeted for other capital projects
to increase resiliency
Kawana-Ralphine SBS Pipeline
Mirabel Collector Wells Pump Hoist Upgrades
Mirabel/Wohler Storage Building
Occidental Road and Sebastopol Road Wells
Ralphine Tanks Flow Thru Conversion
Todd Rd Well Discharge Connection
Warm Springs Dam Hydropower Retrofit
Water Treatment System Modernization Phase 1
Water Treatment System Modernization Phase 3
Total FY25-26 Capital Budget
including Hazard Mitigation Projects:
$18.28M
10 $45.87 million budgeted for operations and maintenance to protect, improve and maintain system reliability
Projects
Aqueduct Cathodic Protection
Pump 9 Replacement
Emergency Inventory Procurement
SCADA Improvements
Tank Recoats & Tank Maintenance Programs
Studies
Arc Flash Studies
Asset Management Plan
Cathodic Protection Assessment
Regional Water Supply Resiliency Implementation
Transmission System Master Plan, Modeling & Condition Assessments Programs
11 $8.80 million for Biological Opinion, Water
Supply Planning and Water Conservation
Expenditures compared to FY 24-25
12 FY24-25 FY25-26
Budget
(in Millions)
Budget
(in Millions)
Change
(in Millions)
Operations and Maintenance $45.41 $45.87 $.46
Capital Projects $15.66 $18.28 $2.62
BO Compliance, Water Supply
Planning, Water Conservation $7.53 $8.80 $1.27
Debt Service $5.83 $9.07 $3.25
Totals $74.43 $82.02 $7.60
Grants, Use of Fund Balance,
and Bond Proceeds $18.13 $21.34 $3.21
13 Operations and
Maintenance
$45.87 Million,
56%
Capital Projects
$18.28 Million, 22%
BO Compliance, Water
Supply Planning, Water
Conservation
$8.80 Million, 11%
Debt Service
$9.07 Million,
11%
FY 25-26 Budgeted Expenditures Grants, Bond Proceeds,
and Use of Fund Balance
$21.34 Million
Example of how rates are
calculated
Cost of Operations
and Maintenance
Water Sold =
Cost of Water
(Dollars per acre-foot)
Water Sold: Restructured Agreement requires use of the Lesser of:
Average of last 3
years annual
water deliveries
Last 12 months
of actual water
deliveries
or
44,530 AF
42,407 AF
$59,370,000 $1,400/ Acre
Foot
42,407 AF
14 sonomawater.org
15 Deliveries and Rates
Due to the prescribed fully volumetric rate, budgeted
deliveries have a significant impact on rate increases.
Scenario Deliveries
Rate
Increase
(SR AQ)
Rate
Increase
(PET AQ)
Rate
Increase
(SON AQ)
3-Year Annual Ave
(FY25/26 Budget) 42,407 8.68% 10.76% 7.60%
500 AF of deliveries = ~ 1.3% change to rate increase
sonomawater.org
16 Result:
Rate increase
dropped from
over 40% to:
SR AQ - 8.68%
Pet AQ – 10.76%
Son AQ - 7.60%
Total cost per
gallon is $0.004
Steps taken to reduce budget and rate
Deferred or
reduced budget
year non-routine
maintenance
projects by $11.31
million
Use of grants, bond
proceeds,
and fund balance =
$21.34 million
Deferred budget
year capital
projects by $5.37
million and $87.93
million in capital
costs originally
scheduled for
FY26/27 and
FY27/28.
sonomawater.org
Proposed Rates for FY 25-26
17 Charge / Aqueduct Santa Rosa Petaluma Sonoma
Deliveries (Acre-Feet) 42,407
O&M $1,029.16 $1,029.16 $1,029.16
Water Management Planning $4.57 $4.57 $4.57
Watershed Planning & Restoration $45.71 $45.71 $45.71
Recycled Water and Local Supply $0.14 $0.14 $0.14
Water Conservation $63.83 $63.83 $63.83
Total O&M $1,143.41 $1,143.41 $1,143.41
Storage & Common Bond/Loan Charges $246.45 $246.45 $246.45 Petaluma Aqueduct Bond/Loan Charge $15.66
Sonoma Aqueduct Bond/Loan Charge $144.56
Prime Contractors $1,389.86 $1,405.52 $1,534.42
Discretionary Charges
Capital Charges - to build fund balance for
future projects $11.00 $10.00 $34.90
Prime Contractors $11.00 $10.00 $34.90
Total Prime Contractors $1,400.86 $1,415.52 $1,569.32
Total Overall Increase: 8.68% 10.76% 7.60%
18 Long Range Financial Plan
Example Santa Rosa Aqueduct Rate Scenario
• Assumes Water Demand Growth of 1% based on FY 2025 Budgeted Deliveries of 41,847 AF. Santa Rosa AQ Deliveries: 16,500 AF to 17,120 AF. Higher Deliveries would reduce rates.
• Estimated 5% growth in O&M Expenses and 4% growth in capital project costs. • Estimated FY 2028-2029 Financing: $114.5 Million.
2027 2028 2029 2030 2031
Estimated Rate per Acre-Foot 1,523 1,652 1,793 1,945 2,110 Estimated Rate Increase 8.7% 8.7% 8.7% 8.7% 8.7%
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2,100
2,200
Rate per Acre-Foot
Fiscal Year
2025 wholesale water rates per Acre-Foot
19 $-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Sonoma County
Water Agency
Zone 7 Water
Agency
Valley Water San Francisco
Public Utilities
Commission
Contra Costa Water
District
sonomawater.org
• Technical Advisory Committee Vote – March 3
• Water Advisory Committee Vote – April 7
• Adoption by Sonoma Water’s Board – April 22
Budget and Rate Adoption Schedule
20 sonomawater.org
Value of water: A brief video on the value of our water supply We are Sonoma Water: Where your water comes from
Water storage tank maintenance: A brief video on how we are working to keep our water storage facilities upgraded, reliable for today and future generations Maintaining the Sonoma booster station: Keeping the drinking water flowing to Sonoma, Valley of the Moon Water District one booster station at a time! Aqueduct corrosion protection program: A brief video on work to combat corrosion in our aqueduct
Russian River Aqueduct Crossing: Ensuring safe delivery of drinking water Dry Creek habitat restoration: Protecting our natural pipeline, habitat Sonoma Water Videos
Investing in our infrastructure
Avaiable in English and Spanish at
www.youtube.com/@sonomawater/videos
21 sonomawater.org
Lynne Rosselli
Financial Services Division Manager
[email protected]
Jake Spaulding
Finance Manager
[email protected]
22 Santa Rosa Water Budget Impacts
• 8.68% Increase = $1.94m increase
• Projected 1.1% growth consistent with long range financial plan
• Current long range financial plan incorporates up to
11% increase to wholesale water rates for FY 2025/26
• No additional fund balance needed to absorb rate
increase
• Recommended wholesale water rate pass-through, if
adopted, would begin for fiscal year 2026/27
23 Santa Rosa Water Customer Impacts
• No additional impacts for FY 2025/26
• Public hearing for next rate cycle on April 1
• If adopted would set rates for FY 2025/26 –FY 2029/30 and include wholesale rate pass through
• Sonoma Water FY2025/26 increase absorbed by
assumptions in long range financial plan (up to 11%)
• Proposed FY2025/26 Water fund budget is returning to
planned CIP investment of $15.5m
24 Recommendation
It is recommended by Santa Rosa Water that the Board of Public Utilities consider Sonoma Water’s proposed Fiscal Year 2025/26 Water Transmission System budget and rate increase and, by motion, make a recommendation to the City Council regarding the Council’s direction to its Water Advisory Committee (WAC) representative for the April 7, 2025 WAC vote on Sonoma Water’s proposed 2025/26 Water
Transmission System Budget and rate increase.
25 Questions?
26