BPU
Budget
Subcommittee
Fiscal Year 2026/27 Water, Wastewater, Regional Reuse and Storm Water and Creeks policy, O&M and CIP Budget
Review
March 3, 2026
1 Nick Harvey
Deputy Director Administration
Agenda
• Enterprise Funding and Policy Review
• Staff Assumptions
• Water, Local Wastewater, Regional Reuse and Storm Water and Creeks budget proposals
• CIP Review
• Budget Schedule
Water Enterprise Funding
Water Enterprise Fiscal Year 2024-25
• Funded by
• Rates – $52.1m
• Approximately 54,000 water accounts
• Water usage and fixed rates
• Varied tiers
• Fees – $3.1m
• Demand fees
• Miscellaneous fees
3 Wastewater Enterprise Funding
Wastewater Enterprise Fiscal Year 2024-25
• Funded by
• Rates – $74.4m
• Approximately 50,000 sewer accounts
• Sewer usage and fixed rates
• Single tier rate – varies by strength of discharge
• Fees – $4.7m
• 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 2025/26 - $42.46 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
Staff Assumptions
• Water deliveries projected to increase 1.1%
• Based on growth assumption consistent with financial model • Wastewater use will remain flat – sewer caps
• Development slowing somewhat
• Rates will increase per current proposed 5-year schedule (plus wholesale passthrough on the Water Usage Charge)
9 Expenditure Increases
• Salaries
• 4% Salary increases department-wide (MOU)
• No re-classification or new position requests
• Electricity
• Water Purchase
• Internal overhead up
• Operations and Maintenance Projects up in Local Wastewater, down in other funds
10 • Water Fund – 6.8%
• Wastewater Fund – 0.8%
• Regional Reuse Fund – 3%
• Storm Water and Creeks Funds – 1.1%
• $742k (22.4%) funded by General Fund
• $2.57M (77.6%) funded by Enterprise Funds
Water, Local WW, Regional Reuse and
Storm Water and Creeks O&M Increases
Water, Local WW & SW
Total Budget
2026-27
Water Operations
Purchase
of Water
14 • Growth only – No increased demand expected
Volume of water increasing by 1.1%
• 8.21%
Sonoma Water rate increase
Water O&M
Wastewater Operations
Wastewater O&M
Regional Operations
Regional Budget
Refund Reserve History
Regional Partner Allocations FY 2026/27
Bond Issuance
• Planning a $35 million bond issuance to fund the electrical infrastructure replacement at LTP
• Assumption has been built into Santa Rosa’s rate modeling as follows:
• 30-year amortization
• 5.5% interest rate
• Estimated debt service payments would be $2.61 Million per year • Estimated annual partner allocations (Same % as CIP):
• Santa Rosa - $1.847M
• Rohnert Park - $514K
• SPCSD - $87K
• Sebastopol - $85K
• Cotati - $77K
Operating Fund Reserves
as of June 30, 2025
23 Water Wastewater Regional • Operating
• $6,700,112
• Catastrophic
• $5,750,000
• Undesignated
• $21,172,865
• +$5.8 mil
• Operating
• $2,000,771
• Catastrophic
• $6,800,000
• Undesignated
• $18,836,725
• +$4.1 mil
• Rate Stabilization
• $1,000,000
• Operating
• $7,075,910
• Catastrophic
• $1,700,000
• Refund Reserve
• $16,283,990
• +$7.5 mil
• Geysers
• $1,250,000
Undesignated Fund Balance – Water
FY 2025/26 Deficit Budget ($5.1M) FY 2026/27 Deficit Budget ($6.5M)
Undesignated Fund Balance – Local
Wastewater
FY 2026/27 Deficit Budget ($6.9M)FY 2025/26 Deficit Budget ($6.9M)
Storm Water and Creeks Operations
Storm Water and Creeks O&M
Storm Water and Creeks Enterprise Reserves
as of June 30,2025
28 1671 – Storm Water Enterprise – Undesignated $728,238 ($9,895) 1672 – Storm Water – Creek Restoration – Undesignated
$1,275,450 ($107,589)
CIP Funding
• Proposed Funding
• Water - $16 Million
• Wastewater - $14.7 Million
• Regional - $13 Million – $1 Million increase
• Storm Water and Creeks - $1,711,076
29 Water CIP 2026/27
• Master Plans/Studies/Misc - $2,247,000
• Water Mains & Services - $3,365,000
• Pump Stations & Facilities - $2,025,000
• Groundwater - $2,363,000
• Reservoirs - $6,000,000
Reservoirs
37% Water Mains &
Services
21%
Master
Plans/Studies/Misc.
14%
Groundwater
15%
Pump
Stations &
Facilities
13%
Water Year 1 (2026/2027)
$16,000,000
Local Wastewater CIP 2026/27
• Master Plans/Studies/Misc - $1,499,000
• Sewer Mains & Services - $7,541,000
• Sewer Trunks - $5,610,000
• Lift Stations & Facilities - $50,000
Sewer
Trunks
38%
Sewer Mains &
Services 51%
Master
Plans/Studies/Misc.
10%
Lift Stations
& Facilities
0%
Local Wastewater Year 1
(2026/2027)
$14,700,000
Regional CIP 2026/27
• Plant Infrastructure - $10,475,000
• Reuse Infrastructure - $975,000
• Master Planning/Studies/Misc -
$1,550,000
Plant Infrastructure 81%
Reuse
Infrastructure
8%
Master Planning/
Studies/Misc.
12%
Regional CIP Year 1 (2026/27)
$13,000,000
Storm Water CIP 2026/27
• Master Planning/Studies/Misc - $875,000
• Storm Drains - $591,076
• Creeks - $245,000
Storm
Drains
35%
Creeks
14%
Master
Plans/Studies/Misc.
51%
Storm Water & Creeks Year 1
(2026/2027)
$1,711,076
Document Overview
35 CIP Project Highlights
• Water Projects
• Groundwater Program
• Pump Station and Reservoirs
• Water and Sewer Main Replacements
• Sewer Projects
• Water and Sewer Main Replacements
• Sewer Trunks
• Storm Water Projects
• Storm Drain On-Call: Phase 3
• Regional Projects
• Laguna Treatment Plant Secondary Clarifiers 1-3 Rehabilitation • Laguna Treatment Plant Flood Protection
• Geysers Pump Stations Electrical Upgrades
36 PID 1997 Carley & Peter Springs Well
Rehabilitation
• Replace the existing damaged and outdated
Carley Well facility and convert into a fulltime
production well. Separate the Peter Springs
Well from the distribution system and convert it
to an irrigation well. Abandon the existing
Freeway Well.
• Project Estimate: $7.9M
• Currently in Design
• Construction: Year 3
Groundwater Program
PID 2212 Tank Seismic Upgrades (Phase 5)
and Pump Station Improvements –
R9A, R16, S16, S17
• Upgrade reservoirs R9A and R16 to current seismic
code and standards and upgrade pump stations S16
and S17 to increase fire flow capacity and improve
system resiliency.
• Project Estimate: $15.4M
• Currently in Design
• Construction: Year 1
37 Pump Stations and Reservoirs
PID 2420 Piner Road Sewer &
Water Improvements
• Replace water and sewer mains within
Piner Road from Airway Drive to Cleveland
Avenue.
• Project Estimate: $5.3M
• Currently in Design
• Construction: Year 1
38 Water and Sewer Main Replacements
PID 2115 Robles Trunk Lining –
Phase 2
• Rehabilitate the existing 42” to 45”
trunk sewer and manholes.
• Project Estimate: $9.2M
• Design: Year 1 & 2
• Construction: Year 3
39 Sewer Trunks
40 Storm Water
PID 2580 Storm Drain Repairs
On-Call: Phase 3
• This project provides a mechanism to
complete emergency storm drain repairs
that are not scoped within another
project.
• Project Estimate: Ongoing
• Design: Ongoing
• Construction: Ongoing
Storm Drain Failure on Oakmont Creek near Meadow Creek Court
41 PID 1979 Laguna Treatment Plant
Secondary Clarifiers 1-3 Rehabilitation
• Rehabilitate clarifiers 1-3 through replacement or
coating of metal components and mechanisms,
and repair and coating of concrete.
• Project Estimate: $8.9M
• Currently in Design
• Construction: Year 2
Regional
42 PID 544 Laguna Treatment Plant
Flood Protection
• Construct retaining walls and flood gates to
protect the LTP from flooding during peak
wet weather events.
• Project Estimate: $21.2M
• Currently in Design
• Construction: Year 1
Regional
43 PID 2448 Geysers Pump Stations
Electrical Upgrades
• Assess the condition of the Geysers pump stations,
prioritize and upgrade electrical components, and
develop a structured maintenance and replacement
schedule.
• Project Estimate: $6M
• Design: Ongoing
• Construction: Ongoing
Regional
Budget Schedule
• Budget Review Subcommittee – March 18th
• O&M & CIP Budget Review and recommendation to full Board • BPU – March 19th
• O&M and CIP Study Session
• SubTAC – April 2nd
• Regional Budget Review and Recommendation by Partner Agencies • BPU – April 2nd
• Recommendation of FY 2026/27 Water, Local Wastewater, Regional and Storm Water & Creeks O&M and CIP budgets to City Council • City Council – April 21st
• Preliminary approval of Regional Budget
• City Council – May 5th & 6th
• Budget Study Sessions
• City Council – June 16th
• Budget Adoption
DISCUSSION /
QUESTIONS?
45