Proposed FY 2025/26 Utility Rates
2City of Sunnyvale – FY 2025/26 Utility Rates Hearing
Overview
• Sunnyvale operates water, wastewater, and solid waste utilities. • Sunnyvale also provides wastewater service to 1,728 properties outside the City.
• Each utility is self-supporting and funded solely through utility rates. • Rates are based on the cost of service for each utility. • Cost of services studies approximately every 5 years. Solid Waste Study in FY 2024/25 – recommendations implemented in FY 2025/26 rates.
3City of Sunnyvale – FY 2025/26 Utility Rates Hearing
Original Projection vs. Recommended Increase
Utility Funds
Utility
Original
Projection
Recommended
FY 2025/26
Change in
Percentage
Points
Water 4.5% 6.0% 1.5%
Wastewater 9.0% 7.0% -2.0%
Solid Waste 4.0% 4.0% 0.0%
4City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Wholesale Water Rate Increases
(2.3% SFPUC, 9.9% Valley Water)
• Use of Rate Stabilization Reserve
to help absorb wholesale rate
increases
• Improvements to aging
infrastructure
• Addition of Automated Meter
Infrastructure (AMI) Project
• Recommended increase: 6%
Primary Drivers - Water
5City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Sunnyvale Cleanwater
Program the largest driver
of rate increases
• Improvements to aging
infrastructure
• Recommended Increase: 7%
Primary Drivers - Wastewater
6City of Sunnyvale – FY 2025/26 Utility Rates Hearing
Primary Drivers – Solid Waste
• Zero Waste initiatives
• Regulatory Changes
• SMaRT Station Equipment
Replacement/Facility Upgrades
• Expected completion end of 2026
• Recommended Increase: 4%
7City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Sunnyvale Fiscal Policy
Rates recover cost of service
Rates reviewed annually
Rates support the total costs of the utility
• Proposition 218
Property related fees may not exceed the proportional cost of the service attributable to the parcel
Public notification process
Rate Setting & Proposition 218
8City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Notices were mailed to all utility customers on May 2, 2025 • If written protests are received from a majority of customers, the proposed rates will not become effective
• Approximately 15,700 protests are needed for a protest majority As of June 16, 2025, 86 protests were received
Proposition 218 Noticing
9City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Assistance program in
partnership with
Sunnyvale Community
Services (SCS)
Customers contact SCS at
408-738-4321 to apply.
SCS reviews applications
and, if approved, notifies
City.
Credit applied to
customer’s account for
approved assistance.
Assistance Programs
• City offers no interest payment
plans available for those
experiencing one-time hardship.
10City of Sunnyvale – FY 2025/26 Utility Rates Hearing
• Alternatives 1 and 2:
• Alternative 1) Find that the project is exempt from the California Environmental Quality Act (CEQA) as noted in the report. • Alternative 2) Adopt a resolution increasing water rates by 6%, wastewater rates by 7%, and solid waste rates by 4% for FY 2025/26.
Staff Recommendation
11City of Sunnyvale – FY 2025/26 Utility Rates Hearing
Questions?