Proposed FY 2026/27 Utility Rates
2City of Sunnyvale – FY 2026/27 Utility Rate Hearing
Overview
• Sunnyvale operates water, wastewater, and solid waste utilities. • Sunnyvale also provides wastewater service to the Rancho Rinconada neighborhood in Cupertino.
• Each utility is self-supporting through utility rates. • Rates are based on the cost of service for each utility. • Cost of services studies approximately every 5 years. Water and Wastewater study starting in FY 2026/27
Solid Waste Study completed in FY 2024/25
3City of Sunnyvale – FY 2026/27 Utility Rate Hearing
Original Projection vs. Recommended Increase
Utility Funds
Utility
Original
Projection
Recommended
FY 2026/27
Change in
Percentage
Points
Water 7.5% 7.5% 0.0%
Wastewater 7.0% 7.0% 0.0%
Solid Waste 4.0% 3.0% -1.0%
4City of Sunnyvale – FY 2026/27 Utility Rate Hearing
• Wholesale Water Rate Increases
(7.4% SFPUC, 9.1% Valley Water)
• Use of Rate Stabilization Reserve
to help absorb wholesale rate
increases
• Improvements to aging
infrastructure
• Upcoming Automated Meter
Infrastructure (AMI) Project
• Recommended increase: 7.5%
Primary Drivers - Water
5City of Sunnyvale – FY 2026/27 Utility Rate Hearing
• Sunnyvale Cleanwater
Program the largest driver
of rate increases
• Improvements to aging
infrastructure
• Recommended Increase: 7%
Primary Drivers - Wastewater
6City of Sunnyvale – FY 2026/27 Utility Rate Hearing
Primary Drivers – Solid Waste
• Zero Waste initiatives
• Regulatory Changes
• SMaRT Station Equipment
Replacement/Facility Upgrades
• Expected completion end of 2026
• Recommended Increase: 3%
7City of Sunnyvale – FY 2026/27 Utility Rate 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 2026/27 Utility Rate Hearing
• Notices mailed to all utility customers on May 1, 2026 • If written protests are received from a majority of customers, proposed rates will not become effective
• Approximately 15,700 protests are needed for a protest majority 102vprotests were received
Proposition 218 Noticing
9City of Sunnyvale – FY 2026/27 Utility Rate Hearing
• Assistance program in
partnership with
Sunnyvale Community
Services (SCS)
Customers contact SCS at
408-738-4321 to apply.
Over $27,000 support
provided this fiscal year.
• City offers no interest
payment plans available
for those experiencing
one-time hardship.
Assistance Programs
10City of Sunnyvale – FY 2026/27 Utility Rate Hearing
• Alternatives 1 and 2:
• Alternative 1) Find that the project is exempt from the California Environmental Quality Act (CEQA).
• Alternative 2) Adopt a resolution increasing water rates by 7.5%, wastewater rates by 7%, and solid waste rates by 3% for FY 2026/27.
Staff Recommendation
11City of Sunnyvale – FY 2026/27 Utility Rate Hearing
Questions?