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Date: January 13, 2026
To: Honorable Mayor and Members of the City Council
From: Craig Bilezerian, Public Works Director
By: Chuck Schaich, Policy & Resources Specialist | [email protected] Subject: Public Works – Adopt RESOLUTION Approving New Recycled Water Rate Structure and Approve Effective Date for New Recycled Water Rate Structure.
Expenditure: None.
RECOMMENDATION
Recommendation of the Public Works Director that City Council:
1. Adopt a RESOLUTION approving a new recycled water rate structure for all recycled water customers in the Torrance Municipal Water service area; and
2. Repeal Resolution No. 99-103 in its entirety; and
3. Approve February 1, 2026, as the effective date for the new recycled water rate structure to be implemented.
FUNDING
None required.
DISCUSSION
The City of Torrance provides water service to approximately seventy-eight percent (78%) of the City through Torrance Municipal Water (TMW) and is authorized under the City Charter and Municipal Code to establish water rates and charges. Since August 1995, the City has received recycled water from the West Basin Municipal Water District’s (WBMWD) Edward C. Little Water Recycling Facility and currently supplies recycled water to approximately fifty (50) customers, primarily for landscape irrigation and industrial uses. Recycled water is also provided to Torrance Refining Company at cost pursuant to a tri-party agreement expiring January 31, 2026.
Recycled water rates adopted in 1999 under Resolution No. 99-103 no longer recover the City’s costs due to significant increases in WBMWD wholesale recycled water rates. An independent financial consultant evaluated the recycled water rate structure and determined that existing rates do not fully recover wholesale, operations, maintenance, and administrative costs.
Based on this analysis, staff recommends a uniform retail rate structure that includes a five percent (5%) markup on recycled water commodity charges to fully recover costs, provide a reasonable financial return to the City, and maintain recycled water as an alternative to imported potable water. Meter charges shall apply only to meters that are owned and serviced by the City. 1 City Council
January 13, 2026
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2 All applicable meter charges shall be assessed in accordance with the City’s published Proposition 218 approved rates.
The Public Works Director recommends City Council approval of the attached Resolution to establish a new recycled water rate structure for customers in the TMW service area and repeal Resolution 99-103 in its entirety.
ATTACHMENTS
1. Resolution
2. Resolution 99-103
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2 RESOLUTION NO. 2026_____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TORRANCE ADOPTING NEW RECYCLED WATER
RATE STRUCTURE FOR CUSTOMERS IN
THE TORRANCE MUNICIPAL WATER SERVICE AREA
WHEREAS, the City of Torrance (herein “City”) provides water service to approximately 78% of the City under the aegis of Torrance Municipal Water (TMW). and WHEREAS, pursuant to Torrance City Charter Section 400 and Torrance Municipal Code Section 76.2.7, the City Council of the City of Torrance has the authority to set and collect rates and charges for water services for the area served by Torrance Municipal Water; and WHEREAS , the City began receiving recycled water supplies from the West Basin Municipal Water District (WBMWD) beginning in August 1995 from WBMWD’s recycled water treatment plant located in the City of El Segundo, known as the Edward C. Little Water Recycling Facility, and
WHEREAS, the City currently sells water to the Torrance Refining Company (TRC) at cost without any markup revenue based on a tri-party agreement executed in 1995 and extended by a series of amendments through January 31,2026, and
WHEREAS , the City also retails recycled water to approximately fifty (50) other customers primarily for landscape irrigation based on a 1999 rate resolution (Resolution 99-103) with a rate structure that no longer recovers the recycled costs due to rapidly rising recycled wholesale water rates levied by WBMWD, and
WHEREAS , the City retained an outside financial consultant to assess current recycled water rate structure and provide recommendations to revise the City’s recycled water rate structure to fully recover costs and generate a reasonable financial return, and WHEREAS , the consultants’ memo report recommended that recycled water rates for all municipal customers be set uniformly based on percentage markup above the actual recycled wholesale rate charged by WBMWD to the City, and
WHEREAS, a five (5) percent retail markup fully recovers all administrative costs and provides for a reasonable financial return to the City, and
THE CITY COUNCIL OF THE CITY OF TORRANCE, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. EFFECTIVE DATE
The rates and fees set forth in this Resolution shall take effect on February 1, 2026 SECTION 2. SCHEDULE OF RECYLED WATER RATES AND CHARGES
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1) Commodity (Quantity) Charge: The commodity rate component is equal to the current commodity charges levied to the City by WBMWD. The commodity charge will be adjusted based on rate changes set by WBMWD. 2) Meter Charges: Meter charges shall apply only to meters that are owned and serviced by the City. All applicable meter charges shall be assessed in accordance with the City’s published Proposition 218 approved rates. 3) Recycled Water Markup Charge: The markup charge is established at five (5) percent of all recycled commodity charges levied by WBMWD to City.
SECTION 3. PRIOR ACTIONS SUPERSEDED
This Resolution supersedes Resolution 99-103 and any prior resolutions related to recycled water.
SECTION 4. ADMINISTRATION
It shall be the duty and function of the Finance Director to administer this Resolution.
INTRODUCED , APPROVED , and ADOPTED this 13th day of January 2026 __________________________
George K. Chen
Mayor of the City of Torran
APPROVED AS TO FORM:
PATRICK Q. SULLIVAN, City Attorney ATTEST:
_________________________________ _________________________________ Tatia Y. Strader, Assistant City Attorney Rebecca Poirier, MMC, City Clerk 4 RESOLUTION 99. I03
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TORRANCE
TO ESTABLISH RECYCLED WATER RATE STRUCTURE AND
RECYCLED WATER USE INCENTIVE PROGRAM
WHEREAS, the City conducted a study of costs of providing recycles water; and WHEREAS, the study justifies the fees set forth in this resolution; and WHEREAS, the City wishes to promote the use of recycled water to conserve the limited potable water supply available to the service area of the City; and WHEREAS, the City is willing to provide incentives to encourage the use of recycled water;
The City Council of the City of Torrance does resolve as follows:
SECTION I- EFFECTIVE DATE
The Recycled Water rate structure and incentives to use Recycled Water shall become effective September 28, 1999.
SECTION II- RECYCLED WATER RATE STRUGTURE FOR METERED
RECYCLED WATER
The Recycled Water rates for all customers shall be
A) Quantitv Rates ( Commoditv) - Metered Water
The quantity rates to be charged and collected for Recycled Water supplied in any one month through one meter shall be set forth atTO% of the Base Water Rates for Metered Water.
B) Readiness- to- Serve Component
The readiness- to- serve component is a service charge based on the size of the service connection to which is to be added the monthly charge computed at the quantity rates. The minimum monthly bill shall not be less than that set by Base Water Rafes for Metered Water set for potable water.
SEGTION III- SERVICE FEES AND DEPOSIT
Service Fees and Deposits shall be the same as those set for potable water.
Orfisfinal
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SECTION IV - RECYCLED WATER INCENT¡ VES
Recycled water incentives are provided to public agency customers in order to advance the use of Recycled Water and reduce the City' s dependence on potable water purchased from Metropolitan Water District. Recycled Water incentives are broken down into customer classes and shall be:(
A) Citv Departments
The Engineering Department shall design and construct all on- site irrigation systems retrofits. The costs for design and construction of these on- site irrigation system retrofits shall be paid from the Water Fund.
B) Torrance Unified School District
The Engineering Department shall design and construct all on- site irrigation systems retrofits for schools within the Torrance MunicipalWater service area.
Half of the retrofit construction costs shall be reimbursed to the Water Fund via an Agreement in which Torrance Unified School District will continue to pay 100% of potable water rates for Recycled Water until half the retrofit construction costs are recovered.
SECTION V - ADMINISTRATION
It shall be the duty and function of the Director of Finance to administer this Resolution.
INTRODUCED, APPROVED, AND ADOPTED this 28th day of September, 1999 Mayor of the City of Torrance
ATTEST:
le of the City of Torrance
APP D AS TO FORM:
John L. Fellows lll, City Attorney
By:
Ronald T. Pohl, Assistant Attorney
6 TORRANCE CITY COUNCIL RESOLUTION NO. 99. 103
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF TORRANCE
SS
l, Sue Herbers, City Clerk of the City of Torrance, California, do hereby certify that the foregoing resolution was duly introduced, approved, and adopted by the City Council of the City of Torrance at a regular meeting of said Council held on the 28' n day of September, 1999 by the following roll call vote:
AYES: COUNCILMEMBERS Cribbs, Honruich, Lee, Messerlian, O' Donnell, Walker, and Hardison.
NOES: COUNCILMEMBERS None.
ABSTAIN: COUNCILMEMBERS None
ABSENT: COUNCILMEMBERS None.
of the C of Torrance
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