Watsonville City Council
May 26, 2026

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 93
Figure 22 compares the status quo and proposed financial plans. Revenues under the proposed financial plan and status quo financial plan are represented by the blue and red dashed lines, respectively. Revenue requirements including O&M expenses, debt service, pay-as-you-go CIP, and reserve funding are represented by the various stacked bars. Green bars represent drawdown of reserves when negative and buildup of reserves when positive.

Figure 22: Solid Waste Enterprise Status Quo Versus Proposed Financial Plan Figure 23 shows the Solid Waste Enterprise’s projected ending reserve balance under the proposed financial plan.

The light blue bars indicate the ending balance. The operating reserve target and total (operating plus capital) reserve targets are represented by the red and blue dashed lines, respectively. Total annual CIP expenditures are represented by the shaded green area.

Figure 23: Proposed Solid Waste Enterprise Financial Plan – Projected Reserve Ending Balance

6.3.Solid Waste Cost of Service Analysis
Section 6.3 details the cost of service (COS) analysis performed for the Solid Waste Enterprise for FY 2027. The COS analysis allocates the overall rate revenue requirement to customer classes based on their proportional use of and cost-burden on the solid waste system. This provides the basis for the development of proposed solid waste rates through FY 2031 in subsequent report sections.

Attachment 1

94 CITY OF WATSONVILLE

6.3.1.METHODOLOGY
The framework utilized for the Solid Waste Enterprise COS analysis is similar to the process used for the Water and Wastewater Enterprise COS analysis. The methodology presented in Section 6.3 is consistent with the prior solid waste rate study conducted in 2021. The primary steps of the Solid Waste Enterprise COS analysis are as follows:

1. Revenue requirement determination: The total solid waste rate revenue requirement is first broken down into separate operating and capital revenue requirements.

2. Cost functionalization: Solid Waste Enterprise expenses are categorized by their function in the system to provide a basis for allocating the operating and capital revenue requirements to various customer classes.

Functional categories include collection, disposal, recycling, and organics.

3. Unit cost development: The revenue requirement for each functional category is divided by the appropriate units of service to determine the unit cost of each.

4. Revenue requirement distribution: The revenue requirement is distributed to customer classes based on unit costs and each customer class’s individual service units.

6.3.2.SOLID WASTE RATE REVENUE REQUIREMENT
Table 6-15 shows the solid waste rate revenue requirement for FY 2027 (also referred to as the test year). The revenue requirement is split into operating and capital categories (Columns C and D). The revenue requirements (Lines 2-4) are equal to FY 2027 O&M expenses, debt service, and pay-as-you-go CIP. Revenue offsets (Lines 8-9) include interest earnings and all other non-rate revenue. These revenues are applied as offsets to the final rate revenue requirement. All revenue requirement and revenue offset values shown are from Section 5.2 The reserve transfer adjustment (Line 13) is equal to the estimated contribution of rate revenues to reserves in FY 2027 after accounting for all revenue requirements and revenue offsets. Note that the total solid waste rate revenue requirement (Column E, Line 16) represents the total revenue that must be recovered from solid waste rates in the test year FY 2027. This amount exceeds current-rate revenue projections for FY 2027 ($20,217,025 from Table 6-5) by approximately $404,340, which equals the first-year revenue adjustment shown in Table 5-18.The final COS solid waste rate revenue requirement for the test year FY 2027 (Line 16) is calculated as follows:

Total revenue required from rates (Line 16) = Revenue requirements (Line 5) - Revenue offsets (Line 10) - Adjustments (Line 14) Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 95
Table 6-15: FY 2027 Solid Waste Rate Revenue Requirement [A] [B] [C] [D] [E]
Line Description
Operating
Revenue
Requirement
Capital
Revenue
Requirement
Total
1 Revenue Requirements
2 O&M Expenses $17,149,750 $0 $17,149,750
3 Debt Service $0 $378,027 $378,027
4 Pay-as-you-go CIP $0 $3,631,200 $3,631,200
5 Total Revenue Requirements $17,149,750 $4,009,227 $21,158,977 6 7 Less Revenue Offsets
8 Drop Off Facility Fees $230,000 $0 $230,000
9 Interest Earnings $20,000 $0 $20,000
10 Total Revenue Offsets $250,000 $0 $250,000
11 12 Less Adjustments
13 Transfer from (to) Reserves $0 $287,612 $287,612
14 Total Adjustments $0 $287,612 $287,612
15 16 Rate Revenue Requirement $16,899,750 $3,721,615 $20,621,365

6.3.3.SOLID WASTE ENTERPRISE COST ALLOCATION BASIS
The next step of the COS analysis is to develop an allocation basis for the revenue requirement based on the functionalization of the Solid Waste Enterprise’s O&M expenses. Raftelis worked with City staff to assign O&M expenses to the four functional categories:
» Collection: costs that vary more closely based on the number of pickups or services provided; general costs that are mostly equitably distributed to customers based on the number of pickups or services provided » Disposal: costs that vary more closely based on the volume of solid waste generated; costs that are mostly equitably distributed to customers based on the volume of solid waste generated » Recycling: costs that vary more closely based on the volume of recyclables generated; costs that are mostly equitably distributed to customers based on the volume of recyclables generated » Organics: costs that vary more closely based on the volume of organics material generated; costs that are mostly equitably distributed to customers based on the volume of organics material generated Table 6-16 shows a summary of FY 2027 O&M expenses by functional category. Raftelis worked with City staff to establish the proposed distribution of O&M expenses. The overall cost allocation basis (Line 26) results in 13.3% of O&M expenses to Collection 69.0% to Disposal, 9.3% to Recycling and 8.3% to Organics. This intermediate step is necessary to allocate the operating and capital revenue requirement.

Attachment 1

96 CITY OF WATSONVILLE
Table 6-16: Solid Waste Cost of Service Allocation Basis (Test Year FY 2027) [A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K]
Line Description Collection
(%)
Disposal
(%)
Recycling
(%)
Organics
(%)
Collection
($)
Disposal
($)
Recycling
($)
Organics
($)
FY 2027 O&M
Expenses
1 COLLECTIONS
2 Personnel 60.0% 31.6% 0.0% 8.4% $2,281,709 $1,201,700 $0 $319,439 $3,802,848 3 Operations 0.0% 89.0% 0.0% 11.0% $0 $8,739,132 $0 $1,080,117 $9,819,249 4 Subtotal $2,281,709 $9,940,832 $0 $1,399,557 $13,622,097 5 6
STREET

SWEEPING
7 Personnel 0.0% 100.0% 0.0% 0.0% $0 $268,801 $0 $0 $268,801 8 Operations 0.0% 100.0% 0.0% 0.0% $0 $190,363 $0 $0 $190,363 9 Subtotal $0 $459,164 $0 $0 $459,164
10 11 MATERIAL

RECYCLING
12 Personnel 0.0% 0.0% 96.5% 3.5% $0 $0 $863,648 $31,324 $894,972 13 Operations 0.0% 0.0% 100.0% 0.0% $0 $0 $732,527 $0 $732,527 14 Subtotal $0 $0 $1,596,175 $31,324 $1,627,499
15 16 LANDFILL
17 Personnel 0.0% 100.0% 0.0% 0.0% $0 $561,033 $0 $0 $561,033 18 Operations 0.0% 100.0% 0.0% 0.0% $0 $729,196 $0 $0 $729,196 19 Subtotal $0 $1,290,229 $0 $0 $1,290,229
20 21 LANDFILL

CLOSURE
22 Personnel 0.0% 100.0% 0.0% 0.0% $0 $0 $0 $0 $0
23 Operations 0.0% 100.0% 0.0% 0.0% $0 $150,761 $0 $0 $150,761 24 Subtotal $0 $150,761 $0 $0 $150,761
25 26 Total 13.3% 69.0% 9.3% 8.3% $2,281,709 $11,840,986 $1,596,175 $1,430,881 $17,149,750 Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 97

SOLID WASTE COST OF SERVICE ALLOCATION
Table 6-17 shows the allocation of the operating and capital revenue requirements (from Table 6-15) to Collection, Disposal, Recycling, and Organics functional categories based on the functionalization of O&M expenses basis developed in the preceding section (from Table 6-16, Columns C-F, Line 26). The operating and capital revenue requirements are therefore allocated 13.3% to Collection 69.0% to Disposal, 9.3% to Recycling, and 8.3% to Organics.

Table 6-17: Allocation of Solid Waste Enterprise Revenue Requirement (Test Year FY 2027) [A] [B] [C] [D] [E] [F] [G]
Line Revenue
Requirement
Collection
($)
Disposal
($)
Recycling
($)
Organics
($)
FY 2027 O&M
Expenses
1 Operating $2,248,447 $11,668,374 $1,572,907 $1,410,022 $16,899,750 2 Capital $495,147 $2,569,576 $346,381 $310,511 $3,721,615 3 Total $2,743,594 $14,237,950 $1,919,288 $1,720,533 $20,621,365

6.3.4.SOLID WASTE UNITS OF SERVICE
To develop unit costs for Collection and Disposal, units of service must be established for each functional category.

The units of service used to develop Collection unit costs are the total number of annual pickups and temporary services (referred to herein as “pickups”). The units of service used to develop Disposal unit costs equals the total volume of solid waste generated (in gallons), Recyclable unit costs are the total volume of recyclables generated (in gallons), and Organics unit costs are the total volume of organics material generated (in gallons). Table 6-18 shows conversion factors and assumptions necessary to calculate units of service. Note that a factor of three is applied to determine solid waste volumes associated with compactor services.

Table 6-18: Cubic Yard and Compactor Conversions
Unit Conversion
1 cubic yard = 201.97 gallons
Volumetric Weighting for Compacting: 3x compacted waste volume Table 6-19 and Table 6-20 show the calculation of FY 2027 units of service. For weekly collection services, it is assumed that there are 4 collections per month. Therefore, weekly pickups (Table 6-19, Column C) are multiplied by 48 weekly pickups per year17F
20 to determine pickups per year (Table 6-19, Column D). This is consistent with the calculation methodology used in the prior solid waste rate study in 2021. For all temporary services (Table 6-20), pickups per year (Column C) simply equals the total number of one-time services in FY 2025.

Volume (in gallons per pickup) is calculated in Table 6-19 (Column E) and Table 6-20 (Column D) based on the volume of each type of service (Column B). Assumptions from Table 6-18 are used to convert cubic yards to gallons and to adjust the volume of compactor services based on the assumed volumetric weighting factor. Gallons per year is calculated as the number of pickups per year multiplied by the number of gallons per container. Volume in gallons per year in Table 6-19 (Column F) and Table 6-20 (Column E) is equal to pickups per year multiplied by gallons per pickup.
20 4 pickups per month × 12 months per year = 48 pickups per year Attachment 1

98 CITY OF WATSONVILLE
Table 6-19: Solid Waste Weekly Pickup Service Units of Service (Test Year FY 2027) [A] [B] [C] [D] [E] [F]
Line Weekly Pickup Services Weekly Pickups Pickups/Year Volume (Gallons/Pickup)
Volume
(Gallons/Year)
1 Cart Service
2 32 gal 5,633 270,392 32 8,652,555
3 68 gal 4,710 226,099 68 15,374,728
4 95 gal 1,164 55,873 95 5,307,969
5 6 Container Service
7 1 cu yd 46 2,219 202 448,280
8 1.5 cu yd 12 579 303 175,414
9 2 cu yd 168 8,058 404 3,254,904
10 3 cu yd 209 10,036 606 6,081,019
11 4 cu yd 267 12,834 808 10,368,917
12 6 cu yd 207 9,939 1,212 12,045,095
13 8 cu yd 72 3,474 1,616 5,613,248
14 15 Drop Box Service
16 20 cu yd 1 48 4,039 194,904
17 25 cu yd 2 96 5,049 487,261
18 30 cu yd 3 145 6,059 877,070
19 35 cu yd 0 0 7,069 0
20 40 cu yd 2 96 8,079 779,618
21 22 Compactor Drop Box Service
23 3 cu yd 6 289 1,818 526,242
24 4 cu yd 2 96 2,424 233,885
25 10 cu yd 0 0 6,059 0
26 15 cu yd 0 0 9,089 0
27 20 cu yd 0 0 12,118 0
28 22 cu yd 0 0 13,330 0
29 25 cu yd 0 0 15,148 0
30 30 cu yd 0 0 18,178 0
31 35 cu yd 0 0 21,207 0
32 40 cu yd 0 0 24,237 0
33 34 Solid Waste (Organics) Collections
35 68 gal 3 145 68 9,843
36 1 cu yd 10 482 202 97,452
37 2 cu yd 24 1,158 404 467,771
38 3 cu yd 3 145 606 87,707
39 40 Total 12,546 602,207 160,529 71,083,885
Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 99
Table 6-20: Solid Waste Temporary Service Units of Service (Test Year FY 2027) [A] [B] [C] [D] [E]
Line Temporary Services Pickups/Year Volume
(Gallons/Pickup)
Volume
(Gallons/Year)
1 Temporary Use Containers
2 1 cu yd 14 202 2,828
3 1.5 cu yd 1 303 303
4 2 cu yd 53 404 21,409
5 3 cu yd 45 606 27,266
6 4 cu yd 119 808 96,140
7 6 cu yd 100 1,212 121,184
8 8 cu yd 34 1,616 54,937
9 10 On-call Drop Box Service
11 20 cu yd (<1/2 full) 23 2,020 46,454
12 20 cu yd 218 4,039 880,607
13 25 cu yd 64 5,049 323,158
14 30 cu yd 439 6,059 2,659,998
15 35 cu yd 91 7,069 643,287
16 40 cu yd 266 8,079 2,149,004
17 50 cu yd 0 10,099 0
18 19 Compactor Drop Box Service
20 3 yd Compactor 0 1,818 0
21 4 yd Compactor 0 2,424 0
22 10 yd Compactor 0 6,059 0
23 12 yd Compactor 0 7,271 0
24 15 yd Compactor 27 9,089 245,398
25 20 yd Compactor 70 12,118 848,291
26 22 yd Compactor 0 13,330 0
27 25 yd Compactor 0 15,148 0
28 30 yd Compactor 45 18,178 817,995
29 40 yd Compactor 73 24,237 1,769,292
30 31 Temporary Special Use Containers* (Wood Waste, Yard Trimmings, & Scrap Metal) 32 4 cu yd 0 808 0
33 6 cu yd 0 1,212 0
34 20 cu yd 0 4,039 0
35 25 cu yd 0 5,049 0
36 30 cu yd 0 6,059 0
37 35 cu yd 0 7,069 0
38 40 cu yd 0 8,079 0
39 40 Temporary Recycling
41 3 cu yd 0 606 0
42 6 cu yd 0 1,212 0
43 15 cu yd 0 3,030 0
44 30 cu yd 0 6,059 0
45 46 Total 1,682 200,459 10,707,552
Attachment 1

100 CITY OF WATSONVILLE
Table 6-21 shows of a summary of total units of service associated with weekly pickup services (from Table 6-19) and temporary services (from Table 6-20). The total number of pickups and total volume are used in the next section to develop Collection, Disposal, Recycling, and Organics unit costs.

Table 6-21: Summary of Solid Waste Units of Service (Test Year FY 2027) Units of Service Number of Pickups
per Year
Volume (gallons)
per Year
Weekly Pickup Services 602,207 71,083,885
Temporary Services 1,682 10,707,552
Total 603,889 81,791,437

6.3.5.SOLID WASTE COST OF SERVICE UNITS COSTS
Table 6-22 shows the calculation of Collection, Disposal, Recycling, and Organics unit costs based on the revenue requirement allocation (from Table 6-17) and total units of service (from Table 6-21) for the test year FY 2027. The portion of the revenue requirement allocated to Collection is divided by total annual pickups to determine a Collection unit cost per pickup. Similarly, the revenue requirement allocation to Disposal, Recycling, and Organics is divided by total gallons to determine a unit cost per gallon.

Table 6-22: Solid Waste Unit Cost Calculation (Test Year FY 2027) Description Collection Disposal Recycling Organics
COS Allocation $2,743,594 $14,237,950 $1,919,288 $1,720,533 Units of Service 603,889 pickups 81,791,437 gallons 81,791,437 gallons 81,791,437 gallons Unit Cost $4.543 per pickup $0.174 per gallon $0.023 per gallon $0.021 per gallon

6.3.6.SOLID WASTE COST ALLOCATION TO CUSTOMER CLASSES
Table 6-23 shows projected FY 2027 rate revenues by charge based on current rates (Current COS) and the updated COS analysis presented in this section (Proposed COS). All proposed COS projections for FY 2027 are for illustrative purposes to demonstrate the distributional impacts of the updated COS allocations on each customer class. However, no changes to current rates will be implemented prior to FY 2027. Note that the results shown are based on detailed calculations that are dependent on rate design considerations addressed subsequently in Section 6.4.

Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 101
Table 6-23: Cost to Serve by Solid Waste Customer Class [A] [B] [C] [D] [E] [F]
Line Customer Class
Current COS
FY 2027
($)
Proposed COS
FY 2027
($)
Current COS
FY 2027
(%)
Proposed COS
FY 2027
(%)
1 Weekly Pickup Services
2 Cart Service $8,764,715 $8,921,536 43.4% 43.3%
3 Container Service $8,337,648 $8,517,246 41.2% 41.3%
4 Drop Box Service $502,005 $512,975 2.5% 2.5%
5 Compactor Drop Box Service $164,326 $167,900 0.8% 0.8% 6 Solid Waste (Organics) Collections $150,464 $153,636 0.7% 0.7% 7 Subtotal $17,919,158 $18,273,293 88.6% 88.6%
8 9 Temporary Services
10 Temporary Use Containers $70,970 $72,497 0.4% 0.4%
11 On-call Drop Box Service $1,438,590 $1,470,020 7.1% 7.1% 12 On-call Compactor Drop Box Service $788,307 $805,556 3.9% 3.9% 13 Temporary Special Use Containers*
(Wood Waste, Yard Trimmings, &
Scrap Metal)
$0 $0 0.0% 0.0%
14 Temporary Recycling $0 $0 0.0% 0.0%
15 Subtotal $2,297,867 $2,348,072 11.4% 11.4%
16 17 Total $20,217,025 $20,621,365 100.0% 100.0%

6.4.Proposed Solid Waste Rates
Section 6.4 shows detailed calculations of proposed solid waste rates through FY 2031. All proposed rates are first calculated directly from the results of the COS analysis (in Section 6.3) for FY 2027 (i.e., the test year).

6.4.1.PROPOSED SOLID WASTE RATE STRUCTURE MODIFICATIONS Raftelis worked with City staff to evaluate potential changes to the existing solid waste rate structure. However, no modifications to the structure were identified and the existing solid waste structure was maintained.

6.4.2.SOLID WASTE RATES (TEST YEAR FY 2027)
Monthly COS charges for weekly pickup services are calculated for the test year FY 2027 in Table 6-24. Monthly weekly pickup charges are composed of a Collection, Disposal, Recycling, and Organics components. The Collection component for each weekly pickup service type and size is based on the Collection unit cost (from Table 6-22) and the assumed four pickups per month. The Disposal, Recycling, and Organics components for each weekly service type and size are based on the Disposal, Recycling, and Organics unit costs (respectively, from Table 6-22) and gallons per pickup (from Table 6-19, Column E). Monthly COS charges for weekly pickup service are calculated in Table 6-24 as follows:

𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐸) = $4.543 × 4 𝑝𝑖𝑐𝑘𝑢𝑝𝑠 𝑝𝑒𝑟 𝑚𝑜𝑛𝑡ℎ Attachment 1

102 CITY OF WATSONVILLE
𝐷𝑖𝑠𝑝𝑜𝑠𝑎𝑙 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐹) = $0.174 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑣𝑜𝑙𝑢𝑚𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 21 𝑅𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐺) = $0.023 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑣𝑜𝑙𝑢𝑚𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 22 𝑂𝑟𝑔𝑎𝑛𝑖𝑐𝑠 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐻) = $0.021 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑣𝑜𝑙𝑢𝑚𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 23 𝐶𝑂𝑆 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑐ℎ𝑎𝑟𝑔𝑒 𝑓𝑜𝑟 𝑤𝑒𝑒𝑘𝑙𝑦 𝑝𝑖𝑐𝑘𝑢𝑝 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐼) = 𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐸) + 𝐷𝑖𝑠𝑝𝑜𝑠𝑎𝑙 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐹) +
𝑅𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐺) + 𝑂𝑟𝑔𝑎𝑛𝑖𝑐𝑠 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐻) COS charges for temporary services are calculated for the test year FY 2027 in Table 6-25. All rates for temporary services are also composed of a Collection, Disposal, Recycling, and Organics component. The Collection component simply equals the Collection unit cost (from Table 6-22) because all temporary services are a one-time service. The Disposal, Recycling, and Organics components for each service type and size is based on the Disposal, Recycling, and Organics unit costs (respectively, from Table 6-22) and gallons per pickup (from Table 6-20, Column D). COS charges for weekly pickup service are calculated in Table 6-25 as follows:

𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐸) = $4.543 × 1 𝑝𝑖𝑐𝑘𝑢𝑝
𝐷𝑖𝑠𝑝𝑜𝑠𝑎𝑙 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐹) = $0.174 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 𝑅𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐺) = $0.023 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 𝑂𝑟𝑔𝑎𝑛𝑖𝑐𝑠 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐻) = $0.021 𝑝𝑒𝑟 𝑔𝑎𝑙𝑙𝑜𝑛 × 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑖𝑛 𝑔𝑎𝑙𝑙𝑜𝑛𝑠 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐷) 𝐶𝑂𝑆 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑐ℎ𝑎𝑟𝑔𝑒 𝑓𝑜𝑟 𝑡𝑒𝑚𝑝𝑜𝑟𝑎𝑟𝑦 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐼) = 𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐸) + 𝐷𝑖𝑠𝑝𝑜𝑠𝑎𝑙 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐹) +
𝑅𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐺) + 𝑂𝑟𝑔𝑎𝑛𝑖𝑐𝑠 𝑐𝑜𝑚𝑝𝑜𝑛𝑒𝑛𝑡 (𝐶𝑜𝑙𝑢𝑚𝑛 𝐻) 21 Monthly volume in gallons is equal to gallons per pickup (from Table 6-19, Column E) multiplied by four pickups per month.
22 Ibid.
23 Ibid.

Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 103
Table 6-24: Solid Waste Weekly Pickup Service Rates Calculation (Test Year FY 2027) [A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L]
Line Weekly Pickup
Services
Monthly
Pickups
Monthly
Volume
(gallons)
Collection Disposal Recycling Organics
COS
Monthly
Charge
Current
Monthly
Charge
Difference
($)
Difference
(%)
1 Cart Service
2 32 gal 4 128 $18.17 $22.28 $3.004 $2.693 $46.16 $45.41 $0.75 1.7% 3 68 gal 4 272 $18.17 $47.35 $6.38 $5.72 $77.63 $76.21 $1.42 1.9% 4 95 gal 4 380 $18.17 $66.15 $8.92 $7.99 $101.24 $99.32 $1.92 1.9% 5 6 Container Service
7 1 cu yd 4 808 $18.17 $140.64 $18.96 $16.99 $194.77 $190.84 $3.93 2.1% 8 1.5 cu yd 4 1,212 $18.17 $210.95 $28.44 $25.49 $283.06 $277.23 $5.83 2.1% 9 2 cu yd 4 1,616 $18.17 $281.27 $37.92 $33.99 $371.35 $363.64 $7.71 2.1% 10 3 cu yd 4 2,424 $18.17 $421.91 $56.87 $50.98 $547.94 $536.45 $11.49 2.1% 11 4 cu yd 4 3,232 $18.17 $562.54 $75.83 $67.98 $724.53 $709.24 $15.29 2.2% 12 6 cu yd 4 4,847 $18.17 $843.81 $113.75 $101.97 $1,077.71 $1,054.85 $22.86 2.2% 13 8 cu yd 4 6,463 $18.17 $1,125.08 $151.66 $135.96 $1,430.88 $1,400.47 $30.41 2.2% 14 15 Drop Box Service
16 20 cu yd 4 16,158 $18.17 $2,812.71 $379.16 $339.89 $3,549.94 $3,474.10 $75.84 2.2% 17 25 cu yd 4 20,197 $18.17 $3,515.89 $473.94 $424.86 $4,432.88 $4,338.12 $94.76 2.2% 18 30 cu yd 4 24,237 $18.17 $4,219.07 $568.73 $509.84 $5,315.82 $5,202.14 $113.68 2.2% 19 35 cu yd 4 28,276 $18.17 $4,922.24 $663.52 $594.81 $6,198.76 $6,066.16 $132.60 2.2% 20 40 cu yd 4 32,316 $18.17 $5,625.42 $758.31 $679.78 $7,081.70 $6,930.18 $151.52 2.2% 21 22 Compactor Drop Box Service
23 3 cu yd 4 7,271 $18.17 $1,265.72 $170.62 $152.95 $1,607.47 $1,573.26 $34.21 2.2% 24 4 cu yd 4 9,695 $18.17 $1,687.63 $227.49 $203.94 $2,137.23 $2,091.68 $45.55 2.2% 25 10 cu yd 4 24,237 $18.17 $4,219.07 $568.73 $509.84 $5,315.82 $5,202.14 $113.68 2.2% 26 15 cu yd 4 36,355 $18.17 $6,328.60 $853.10 $764.76 $7,964.64 $7,794.20 $170.44 2.2% 27 20 cu yd 4 48,474 $18.17 $8,438.13 $1,137.47 $1,019.68 $10,613.45 $10,386.24 $227.21 2.2% 28 22 cu yd 4 53,321 $18.17 $9,281.95 $1,251.21 $1,121.64 $11,672.98 $11,423.07 $249.91 2.2% 29 25 cu yd 4 60,592 $18.17 $10,547.67 $1,421.83 $1,274.59 $13,262.27 $12,978.30 $283.97 2.2% 30 30 cu yd 4 72,711 $18.17 $12,657.20 $1,706.20 $1,529.51 $15,911.09 $15,570.35 $340.74 2.2% 31 35 cu yd 4 84,829 $18.17 $14,766.73 $1,990.57 $1,784.43 $18,559.91 $18,162.41 $397.50 2.2% 32 40 cu yd 4 96,948 $18.17 $16,876.27 $2,274.94 $2,039.35 $21,208.73 $20,754.45 $454.28 2.2% 33 34 Solid Waste (Organics) Collections
35 68 gal 4 272 $18.17 $47.35 $6.38 $5.72 $77.63 $76.21 $1.42 1.9% 36 1 cu yd 4 808 $18.17 $140.64 $18.96 $16.99 $194.77 $190.84 $3.93 2.1% 37 2 cu yd 4 1,616 $18.17 $281.27 $37.92 $33.99 $371.35 $363.64 $7.71 2.1% 38 3 cu yd 4 2,424 $18.17 $421.91 $56.87 $50.98 $547.94 $536.45 $11.49 2.1% Attachment 1

104 CITY OF WATSONVILLE
Table 6-25: Solid Waste Temporary Service Rates Calculation (Test Year FY 2027) [A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L]
Line Temporary
Pickup Services
Pickup
s per
Service
Volume
per
Service
(gallons)
Collection Disposal Recycling Organics COS
Charge
Current
Charge
Difference
($)
Difference
(%)
1 Temporary Use Containers
2 1 cu yd 1 202 $4.54 $35.16 $4.74 $4.25 $48.70 $47.72 $0.98 2.1% 3 1.5 cu yd 1 303 $4.54 $52.74 $7.11 $6.37 $70.77 $69.32 $1.45 2.1% 4 2 cu yd 1 404 $4.54 $70.32 $9.48 $8.50 $92.84 $90.92 $1.92 2.1% 5 3 cu yd 1 606 $4.54 $105.48 $14.22 $12.75 $136.99 $134.12 $2.87 2.1% 6 4 cu yd 1 808 $4.54 $140.64 $18.96 $16.99 $181.14 $177.32 $3.82 2.2% 7 6 cu yd 1 1,212 $4.54 $210.95 $28.44 $25.49 $269.43 $263.73 $5.70 2.2% 8 8 cu yd 1 1,616 $4.54 $281.27 $37.92 $33.99 $357.72 $350.12 $7.60 2.2% 9 10 On-call Drop Box Service
11 20 cu yd (<1/2 full) 1 2,020 $4.54 $351.59 $47.39 $42.49 $446.02 $436.52 $9.50 2.2% 12 20 cu yd 1 4,039 $4.54 $703.18 $94.79 $84.97 $887.49 $868.53 $18.96 2.2% 13 25 cu yd 1 5,049 $4.54 $878.97 $118.49 $106.22 $1,108.22 $1,084.53 $23.69 2.2% 14 30 cu yd 1 6,059 $4.54 $1,054.77 $142.18 $127.46 $1,328.96 $1,300.54 $28.42 2.2% 15 35 cu yd 1 7,069 $4.54 $1,230.56 $165.88 $148.70 $1,549.69 $1,516.54 $33.15 2.2% 16 40 cu yd 1 8,079 $4.54 $1,406.36 $189.58 $169.95 $1,770.43 $1,732.55 $37.88 2.2% 17 50 cu yd 1 10,099 $4.54 $1,757.94 $236.97 $212.43 $2,211.90 $2,164.56 $47.34 2.2% 18 19 On-call Compactor Drop Box Service
20 3 yd Compactor 1 1,818 $4.54 $316.43 $42.66 $38.24 $401.87 $393.32 $8.55 2.2% 21 4 yd Compactor 1 2,424 $4.54 $421.91 $56.87 $50.98 $534.31 $522.93 $11.38 2.2% 22 10 yd Compactor 1 6,059 $4.54 $1,054.77 $142.18 $127.46 $1,328.96 $1,300.54 $28.42 2.2% 23 12 yd Compactor 1 7,271 $4.54 $1,265.72 $170.62 $152.95 $1,593.84 $1,559.74 $34.10 2.2% 24 15 yd Compactor 1 9,089 $4.54 $1,582.15 $213.28 $191.19 $1,991.16 $1,948.55 $42.61 2.2% 25 20 yd Compactor 1 12,118 $4.54 $2,109.53 $284.37 $254.92 $2,653.37 $2,596.57 $56.80 2.2% 26 22 yd Compactor 1 13,330 $4.54 $2,320.49 $312.80 $280.41 $2,918.25 $2,855.77 $62.48 2.2% 27 25 yd Compactor 1 15,148 $4.54 $2,636.92 $355.46 $318.65 $3,315.57 $3,244.58 $70.99 2.2% 28 30 yd Compactor 1 18,178 $4.54 $3,164.30 $426.55 $382.38 $3,977.78 $3,892.60 $85.18 2.2% 29 40 yd Compactor 1 24,237 $4.54 $4,219.07 $568.73 $509.84 $5,302.19 $5,188.62 $113.57 2.2% 30 31 Temporary Special Use Containers* (Wood Waste, Yard Trimmings, & Scrap Metal) 32 4 cu yd 1 808 $4.54 $140.64 $18.96 $16.99 $181.14 $177.32 $3.82 2.2% 33 6 cu yd 1 1,212 $4.54 $210.95 $28.44 $25.49 $269.43 $263.73 $5.70 2.2% 34 20 cu yd 1 4,039 $4.54 $703.18 $94.79 $84.97 $887.49 $868.53 $18.96 2.2% 35 25 cu yd 1 5,049 $4.54 $878.97 $118.49 $106.22 $1,108.22 $1,084.53 $23.69 2.2% 36 30 cu yd 1 6,059 $4.54 $1,054.77 $142.18 $127.46 $1,328.96 $1,300.54 $28.42 2.2% 37 35 cu yd 1 7,069 $4.54 $1,230.56 $165.88 $148.70 $1,549.69 $1,516.54 $33.15 2.2% 38 40 cu yd 1 8,079 $4.54 $1,406.36 $189.58 $169.95 $1,770.43 $1,732.55 $37.88 2.2% Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 105
[A] [B] [C] [D] [E] [F] [G] [H] [I] [J] [K] [L]
Line Weekly Pickup
Services
Pickup
s per
Service
Volume
per
Service
(gallons)
Collection Disposal Recycling Organics COS
Charge
Current
Charge
Difference
($)
Difference
(%)
39 Temporary Recycling
40 3 cu yd 1 606 $4.54 $105.48 $14.22 $12.75 $136.99 $134.12 $2.87 2.1% 41 6 cu yd 1 1,212 $4.54 $210.95 $28.44 $25.49 $269.43 $263.73 $5.70 2.2% 42 15 cu yd 1 3,030 $4.54 $527.38 $71.09 $63.73 $666.75 $652.53 $14.22 2.2% 43 30 cu yd 1 6,059 $4.54 $1,054.77 $142.18 $127.46 $1,328.96 $1,300.54 $28.42 2.2% Attachment 1

106 CITY OF WATSONVILLE

6.4.3.PROPOSED FIVE-YEAR SOLID WASTE RATE SCHEDULE
Table 6-26 and Table 6-27 show the proposed five-year schedule of solid waste rates for FY 2027 to FY 2031.

Proposed FY 2027 rates were calculated by the COS analysis. All proposed rates in subsequent years are then increased based on the schedule of proposed revenue adjustments (from Table 6-13). All proposed rates are rounded up to the nearest cent to ensure adequate revenue recovery. Current solid waste rates (from Table 6-1 and Table 6-2) are also shown.

Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 107
Table 6-26: Proposed Schedule of Solid Waste Rates for Weekly Pickup Services Monthly Charge per Weekly Pickup Current Proposed
FY 2027
Proposed
FY 2028
Proposed
FY 2029
Proposed
FY 2030
Proposed
FY 2031
Cart Service
32 gal $45.41 $46.16 $47.08 $48.02 $48.99 $49.97
68 gal $76.21 $77.63 $79.18 $80.77 $82.38 $84.03
95 gal $99.32 $101.24 $103.26 $105.33 $107.44 $109.59
Container Service
1 cu yd $190.84 $194.77 $198.67 $202.64 $206.69 $210.83

1.5 cu yd $277.23 $283.06 $288.72 $294.50 $300.39 $306.39 2 cu yd $363.64 $371.35 $378.78 $386.35 $394.08 $401.96 3 cu yd $536.45 $547.94 $558.90 $570.08 $581.48 $593.11 4 cu yd $709.24 $724.53 $739.02 $753.80 $768.88 $784.25 6 cu yd $1,054.85 $1,077.71 $1,099.26 $1,121.25 $1,143.67 $1,166.55 8 cu yd $1,400.47 $1,430.88 $1,459.50 $1,488.69 $1,518.46 $1,548.83 Drop Box Service
20 cu yd $3,474.10 $3,549.94 $3,620.94 $3,693.36 $3,767.22 $3,842.57 25 cu yd $4,338.12 $4,432.88 $4,521.54 $4,611.97 $4,704.21 $4,798.29 30 cu yd $5,202.14 $5,315.82 $5,422.14 $5,530.58 $5,641.19 $5,754.01 35 cu yd $6,066.16 $6,198.76 $6,322.74 $6,449.19 $6,578.17 $6,709.74 40 cu yd $6,930.18 $7,081.70 $7,223.33 $7,367.80 $7,515.16 $7,665.46 Compactor Drop Box Service
3 cu yd $1,573.26 $1,607.47 $1,639.62 $1,672.41 $1,705.86 $1,739.98 4 cu yd $2,091.68 $2,137.23 $2,179.97 $2,223.57 $2,268.05 $2,313.41 10 cu yd $5,202.14 $5,315.82 $5,422.14 $5,530.58 $5,641.19 $5,754.01 15 cu yd $7,794.20 $7,964.64 $8,123.93 $8,286.41 $8,452.14 $8,621.18 20 cu yd $10,386.24 $10,613.45 $10,825.72 $11,042.23 $11,263.08 $11,488.34 22 cu yd $11,423.07 $11,672.98 $11,906.44 $12,144.57 $12,387.46 $12,635.21 25 cu yd $12,978.30 $13,262.27 $13,527.52 $13,798.07 $14,074.03 $14,355.51 30 cu yd $15,570.35 $15,911.09 $16,229.31 $16,553.90 $16,884.98 $17,222.68 35 cu yd $18,162.41 $18,559.91 $18,931.11 $19,309.73 $19,695.92 $20,089.84 40 cu yd $20,754.45 $21,208.73 $21,632.90 $22,065.56 $22,506.87 $22,957.01 Solid Waste (Organics) Collections
68 gal $76.21 $77.63 $79.18 $80.77 $82.38 $84.03
1 cu yd $190.84 $194.77 $198.67 $202.64 $206.69 $210.83 2 cu yd $363.64 $371.35 $378.78 $386.35 $394.08 $401.96 3 cu yd $536.45 $547.94 $558.90 $570.08 $581.48 $593.11 Attachment 1

108 CITY OF WATSONVILLE
Table 6-27: Proposed Schedule of Solid Waste Rates for Temporary Services Charge per Temporary Service Current Proposed
FY 2027
Proposed
FY 2028
Proposed
FY 2029
Proposed
FY 2030
Proposed
FY 2031
Temporary Use Containers
1 cu yd $47.72 $48.70 $49.67 $50.67 $51.68 $52.71

1.5 cu yd $69.32 $70.77 $72.19 $73.63 $75.10 $76.60
2 cu yd $90.92 $92.84 $94.70 $96.59 $98.52 $100.49
3 cu yd $134.12 $136.99 $139.73 $142.52 $145.37 $148.28 4 cu yd $177.32 $181.14 $184.76 $188.46 $192.23 $196.07 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 8 cu yd $350.12 $357.72 $364.87 $372.17 $379.62 $387.21 On-Call Drop Box Service
20 cu yd (<1/2 full) $436.52 $446.02 $454.94 $464.04 $473.32 $482.79 20 cu yd $868.53 $887.49 $905.24 $923.34 $941.81 $960.65 25 cu yd $1,084.53 $1,108.22 $1,130.38 $1,152.99 $1,176.05 $1,199.57 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 35 cu yd $1,516.54 $1,549.69 $1,580.68 $1,612.30 $1,644.54 $1,677.43 40 cu yd $1,732.55 $1,770.43 $1,805.84 $1,841.96 $1,878.79 $1,916.37 50 cu yd $2,164.56 $2,211.90 $2,256.14 $2,301.26 $2,347.29 $2,394.23 On-call Compactor Drop Box Service
3 yd Compactor $393.32 $401.87 $409.91 $418.11 $426.47 $435.00 4 yd Compactor $522.93 $534.31 $545.00 $555.90 $567.01 $578.35 10 yd Compactor $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 12 yd Compactor $1,559.74 $1,593.84 $1,625.72 $1,658.23 $1,691.40 $1,725.22 15 yd Compactor $1,948.55 $1,991.16 $2,030.98 $2,071.60 $2,113.03 $2,155.30 20 yd Compactor $2,596.57 $2,653.37 $2,706.44 $2,760.57 $2,815.78 $2,872.09 22 yd Compactor $2,855.77 $2,918.25 $2,976.62 $3,036.15 $3,096.87 $3,158.81 25 yd Compactor $3,244.58 $3,315.57 $3,381.88 $3,449.52 $3,518.51 $3,588.88 30 yd Compactor $3,892.60 $3,977.78 $4,057.34 $4,138.48 $4,221.25 $4,305.68 40 yd Compactor $5,188.62 $5,302.19 $5,408.23 $5,516.40 $5,626.73 $5,739.26 Temporary Special Use Containers* (Wood Waste, Yard Trimmings, & Scrap Metal) 4 cu yd $177.32 $181.14 $184.76 $188.46 $192.23 $196.07 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 20 cu yd $868.53 $887.49 $905.24 $923.34 $941.81 $960.65 25 cu yd $1,084.53 $1,108.22 $1,130.38 $1,152.99 $1,176.05 $1,199.57 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 35 cu yd $1,516.54 $1,549.69 $1,580.68 $1,612.30 $1,644.54 $1,677.43 40 cu yd $1,732.55 $1,770.43 $1,805.84 $1,841.96 $1,878.79 $1,916.37 Temporary Recycling
3 cu yd $134.12 $136.99 $139.73 $142.52 $145.37 $148.28 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 15 cu yd $652.53 $666.75 $680.09 $693.69 $707.56 $721.71 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 109

7.Customer Bill Impacts

7.1.Monthly Bill Impacts
Section 7 includes sample monthly bill impacts for single family residential customers receiving water, wastewater, and solid waste service from the City. Sample bills are shown for two representative customers:
1) Low Volume Single Family Residential Customer:
» Representative of a small household with 1-2 persons
» Water service: 5/8-inch water meter using 6 CCF per month (median water use for residential customers) » Wastewater service: fixed monthly charge for one dwelling unit » Solid waste service: 32-gallon weekly cart service (smallest cart size) 2) Typical Single Family Residential Customer:
» Representative of an average family household with 3-4 persons » Water service: 5/8-inch water meter using 8 CCF per month (average water use for residential customers) » Wastewater service: fixed monthly charge for one dwelling unit » Solid waste service: 68-gallon weekly cart service (medium cart size) Monthly bill impacts for a low volume single family residential customer are shown in Table 7-1.

Table 7-1: Monthly Bills through FY 2031 for Low Volume Single Family Residential Customers Utility
Service
Current
Monthly Bill
(FY 2026)
Proposed
Monthly Bill
(FY 2027)
Proposed
Monthly Bill
(FY 2028)
Proposed
Monthly Bill
(FY 2029)
Proposed
Monthly Bill
(FY 2030)
Proposed
Monthly Bill
(FY 2031)
Water $54.59 $58.08 $60.98 $64.03 $67.23 $70.60
Wastewater $61.51 $70.42 $78.87 $83.60 $88.62 $93.94
Solid Waste $45.41 $46.16 $47.08 $48.02 $48.99 $49.97
Total $161.51 $174.66 $186.94 $195.66 $204.84 $214.50
Monthly bill impacts for a typical single family residential customer are shown in Table 7-2.

Table 7-2: Monthly Bills through FY 2026 for Typical Single Family Residential Customers Utility
Service
Current
Monthly Bill
(FY 2026)
Proposed
Monthly Bill
(FY 2027)
Proposed
Monthly Bill
(FY 2028)
Proposed
Monthly Bill
(FY 2029)
Proposed
Monthly Bill
(FY 2030)
Proposed
Monthly Bill
(FY 2031)
Water $65.35 $69.08 $72.53 $76.16 $79.97 $83.97
Wastewater $61.51 $70.42 $78.87 $83.60 $88.62 $93.94
Solid Waste $76.21 $77.63 $79.18 $80.77 $82.38 $84.03
Total $203.07 $217.13 $230.59 $240.53 $250.97 $261.93
Figure 24 summarizes combined monthly bill impacts for low volume and typical single family residential customers over the study period.

Attachment 1

110 CITY OF WATSONVILLE
Figure 24: Single Family Residential Monthly Bill Impacts

7.2.Monthly Bill Comparison with Neighboring Communities Figure 25 shows a comparison of typical single family residential combined monthly water, wastewater, and solid waste bills in the City of Watsonville with four neighboring communities. All bills are calculated based on the smallest meter size available, monthly water use of 8 CCF, and solid waste service comparable to the City’s 68- gallon weekly cart service. Monthly bills for other neighboring communities are based on rates currently in effect as of FY 2026. Estimated monthly bills based on the City’s current and proposed FY 2027 rates are significantly lower than current monthly bills in all four neighboring communities.

Attachment 1

WATER, WASTEWATER, AND SOLID WASTE RATE STUDY 111
By FY 2031, a typical single family residential customer in the City will still stay pay considerably less compared to current monthly bills in all four neighboring communities shown. While customers in the City will experience monthly bill increases over the next five years under the proposed rate schedule, utility service will still remain affordable compared to other nearby communities
Figure 25: Single Family Residential Monthly Bill Comparison with Neighboring Communities Note: Figure reflects current rates for neighboring communities.

Attachment 1

Attachment 2

Attachment 2

Attachment 2

Attachment 2

Attachment 2

MCl.1 -i !R ,,-,..-0 c,1,•1· •~••JI' l Rle~~~ed I 1'( ,,:_ • ._,L W~tsonville
City Clerk
Objection to proposed Wastewater Fee Assessments July 2026 to July 2031.

This objection is to the lumping together of Single Family Residences and Multifamily Residences. This is an antiquated assumption in light of the building of multiple bedroom/multiple bathroom homes in the City during the past 20 years. At the webinar in late April the consultant for these proposed fees stated that ALL DWELLINGS are assessed the same fee, which is no longer a fair assumption.

Low water users (whether houses or MFRs) should be classified as low water users. Many local municipalities separate SFRs and MFRs when assessing wastewater fees. The City of Watsonville's current method of assessing these at the same rate means that low water users are_subsidizing high water users. The burden of higher taxes should not be placed on low water users.

Santa Cruz County separates condos, townhouses, ADUs and apartments from SFRs. MFRs are assessed at lower rates because they are lower water users! Monterey County does the same. As a matter of fact Santa Cruz County has had a low water use program for at least 30 years. Get with it Watsonville.

Age restricted properties should also be classified as low water users. On a section of my street there are 28 homes, 1 7 of which are occupied by a single person over 5 5 years of age. Chances are these occupants are not stressing the wastewater system as are occupants of 4+ bedroom/3+ bath homes. The City has these records and can readily determine which residences are low water users, say, dwellings which average under 7 CCFs per month.

Remedies for the current assessment methodology are:
# 1 to establish a low water use exemption/reduction program which can be applied for by the homeowner/renter
OR
#2 define a general class of low water users and reclassify those properties at lower wastewater rates.

Attachment 3

In closing, this objection is also to the 52% increase in wastewater assessment over the next 5 years.

Assessment years 2021 to 2025 show a rate increase of $224. It is now proposed that the rate increase over the next 5 years is to be $389. Current homeowners are not responsible for the City's failure in prior years to collect fees that were sufficient to create reserves to provide for repairs to aging infrastructure.

While an increase in rates is always expected, this 52% increase for every dwelling is exorbitant. Institute low water user rates beginning in July 2026 and lower the percentage of increase to 30%.
\p~~
Sandra Haven
RE: Parcel
Attachment 3

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

The City of Watsonville (“City”) provides this written response to timely written objections related to the City’s proposed approval of updates to water rates and wastewater rates (which may be collectively referenced as “rates”). This response is provided in accordance with “AB 2257” (Government Code Section 53759.1), and the City’s Utility Rate Setting Procedures (approved by City Council on March 24, 2026), as summarized in the Notice of Public Hearing posted on the City’s website. The City’s website included links to supplemental documents relevant to the proposed update to water and wastewater rates, including the City of Watsonville, Water, Wastewater, and Solid Waste Rate Study Report, dated April 7, 2026, prepared on behalf of the City by Raftelis (“Rate Study”).

Written Response to Hurtado Objection (Water Only)
First Objection:

First, the City has not provided a sufficiently specific, transparent, or complete explanation showing that the proposed rates are limited to the actual and lawful cost of providing service, as required by Proposition 218. The City's public messaging relies on broad claims about inflation, aging infrastructure, compliance costs, and capital needs, but broad claims are not the same as proof. I object because the City has not adequately demonstrated, with sufficient specificity, that the revenues to be derived from the proposed rates will not exceed the funds required to provide the property-related service.

Response to Objection 1: While the publicly presented materials focus on high level summaries and broader drivers for rate increases, also publicly available is a detailed report (Water, Wastewater, and Solid Waste Rate Study Report dated April 7, 2026) performed by the City’s contracted utility consulting firm, Raftelis. The rate study report details the need for the proposed annual rate adjustments by methodically stepping through the math of the City’s financial outcomes both with and without the proposed rate increases. The proposed utility rates are based on the costs of providing services which include operating costs, planned capital project costs, existing and planned debt obligations, and prudent cash reserves. The forecast of these costs are shown separately within the financial plan sections of the report for each utility.

The summary of these costs are shown in Tables 4-20, 5-13, and 6-14 for the water, wastewater, and solid waste utilities, respectively; with build-up to these summarized tables in preceding sections of the report.

More, the rate study report Figure 2 (Water), Figure 6 (Wastewater), and Figure 9 (Solid Waste), show the comparison between the two scenarios with and without rate increases.

Table 4-20 shows that without rate increases, the Water Enterprise will have a negative ending fund balance by the end of the study period in FY 2031. Similarly, Table 5-13 shows that without rate increases, the Wastewater Enterprise will have a negative ending fund balance by the end of the study period in FY 2030.

Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

For the Solid Waste Enterprise, Table 6-14 shows the net cash change by study end, showing the Solid Waste Enterprise is generating enough revenue to reasonably cover expenses and meet reserve target balances.

Second Objection:

Second, the City's explanation of the wastewater problem is too vague and internally inconsistent to justify the magnitude of the proposed increases. In the formal notice, the City states that "much of our wastewater plant is worn out," that it "was built in 1961," and that 60-year-old equipment is at risk of failure. On the City's public rate-adjustment webpage, however, the City says emergency repairs will occur when equipment "last updated nearly 40 years ago breaks down." Those are not the same description, and the City has not clearly identified which specific facilities, components, or systems are actually original 1961 infrastructure, which were added or upgraded later, and which specific assets are allegedly obsolete now. I object because the City is asking ratepayers to fund major increases without clearly identifying what portion of the wastewater system is truly at end of life, what portion reflects later additions or improvements, and what precise assets are driving this proposal.

Response to Objection 2: “While the City’s records indicate the author of this objection is not a customer of City wastewater service, and therefore the objection does not meet the requirements of a “written objection” under AB 2257, the City provides this response to the Second Objection. Table 5-6 of the Rate Study report details the capital projects funded by the proposed rate increases. The projects total $67.8 million over the rate setting period. This capital plan delineates the projects to be completed, and each project may contain several infrastructure components within it. A rate study does not track, account for, or analyze each individual facility or asset in service- for most utilities this is hundreds or thousands of individual items that have been capitalized, depreciated, repaired, and replaced over time. Rather, the rate study considers the long-term (10-year or greater) capital improvement program which itself is the result of staff and engineers evaluation of the condition of major assets. In the case of the wastewater utility the primary drivers are the treatment plant Headworks project and energy cogeneration projects. These two projects have been discussed in public at length including the cost, timing, financing, and history of the facilities.

Third Objection
Third, the City's own records show that rates were last studied in 2021, and that study covered fiscal years 2022 through 2026. The current notice now states that rates were last studied in 2021 and proposes yet another multi-year schedule beginning July 1, 2026 with annual adjustments through July 1, 2030. I object because the City has not adequately explained why another major round of increases is already being advanced so soon after the 2021 study, whether this is now expected to become the recurring norm every five years, and what concrete cost-control measures were implemented between 2021 and now to reduce the need for another rate increase cycle.

Response to Objection 3: As stated in Section 2.2 of the Rate Study Report, public water, wastewater, and solid waste utilities in California typically perform a cost of service (COS) analysis every five to ten years to Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

ensure that customers are appropriately charged for service commensurate with the cost to provide the service. The City last conducted water, wastewater, and solid waste rate studies in 2021, which established proposed rates over a five-year period from Fiscal Year (FY) 2022 through FY 2026, the current fiscal year.

Government Code Section 53756 authorizes the City to establish a schedule of annual rate adjustments for a period not to exceed five years. As the last study covered rates through FY 2026 (the current fiscal year), the City contracted with Raftelis to look forward to the next five years, and ensure that the utility was recovering sufficient costs to pay for inflationary pressure, planned capital projects, debt service, and other drivers, as the economic landscape has changed since the last study completed in FY 2021. Changes are detailed in the executive summary of the rate study report under Section 1.2.1 (Water), 1.3.1 (Wastewater), and 1.4.1 (Solid Waste), and include items like cost inflation, aging infrastructure, and planned capital projects.

Fourth Objection
Fourth, the City's reliance on "inflation" is not a sufficient explanation for the scale of these proposed increases.

Inflation may be one factor, but the City has not shown that inflation alone explains the present capital and operating burden. I object because the City has not adequately disclosed the relative contribution of inflation, deferred maintenance, project scope growth, reserve policy, financing choices, consultant costs, administrative overhead, staffing model decisions, procurement strategy, or prior management decisions to the proposed rates.

Response to Objection 4: All the aforementioned items are partial drivers of the proposed rate adjustments for the City. While the rate study report does not evaluate each of these drivers individually, inflation, planned capital improvements, debt service coverage requirements, and prudent cash reserves all drive the need for rate increases. It is not standard practice to evaluate individual pressures on a utility and how those components individually affect rate adjustments. Rather, the utility is evaluated holistically, and the combined effect of these costs are incorporated into a single revenue requirement, as derived in Sections

4.4, 5.4, and 6.3 for the three utilities respectively. The combined influence of inflationary pressure, operations and maintenance costs, capital planning needs from conception to construction, debt service requirements, and reserve targets are discussed in Section 4.1 (Water), Section 5.1 (Wastewater), and Section 6.1 (Solid Waste) of the Rate Study Report.

Fifth Objection
Fifth, the City has not sufficiently demonstrated that all lower-cost alternatives were fully evaluated before shifting more costs onto ratepayers. I object because the City has not adequately shown what projects were re-scoped, deferred, phased, resized, value- engineered, or redesigned; what equipment life was extended or could still be extended; what rehabilitation options were considered instead of replacement; what technology investments were made or considered to reduce labor-intensive work; what software, automation, metering, workflow, or customerservice tools were deployed or evaluated to offset operating costs; and what in-house capabilities were used or could have been used in place of outside consultants or vendors.

Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

Response to Objection 5: While a detailed outlay of the requested decisions in the historical and planned operation and maintenance of either the water system or wastewater system is not a valid legal basis for a Proposition 218 objection, City staff has considered these options vigorously and thoughtfully in the preparation of the 10 year CIP for all three utilities. For both water and wastewater, a detailed condition assessment of each system was completed in 2020 which reviewed all aspects of existing assets from a mechanical, electrical, and structural perspective, and was the nexus for the 10 year and beyond Capital Improvement Plan (CIP). The main CIP impacting water rates are Hexavalent Chromium treatment on five of the City’s eleven existing wells due to recently adopted maximum contaminant levels issued by the State of California. City staff has prioritized only the most essential components required to achieve treatment goals. The City also has it’s own water services crew which performs a majority of main line replacements in-house, resulting in significant savings to our customers versus needing to contract the work out. Staff are also constantly looking for grant funding opportunities, for example, the City received a $5 million grant to offset the cost of the recently completed $10 million Zone 2 reservoir construction costs. The same thoughtful consideration and seeking of grant opportunities is employed for the other two utilities as well.

Sixth Objection
Sixth, I object to the extent the proposed rates may include costs that have not been shown to be proportional, necessary, and properly attributable to the service provided to this parcel. Proposition 218 requires more than general claims of need. It requires a lawful and supportable nexus between the rate charged and the cost of service attributable to the parcel or customer class. The City has not sufficiently demonstrated that standard here.

Response to Objection 6: The rate study report methodically steps through the math from development of a long-range financial plan, the multi-year revenue requirements, the allocation of costs within technical cost of service analyses, and the rate design to recover costs from like customer classes. The approach used is utilized across California and the nation and is the standard of practice from the American Water Works Association. The results of the study are schedules of cost-justified rates for service by customer class and service type. The cost attributable to the parcel (total cost of service) is the cost-justified rates multiplied by the parcel’s specific requirements for water service. The rate structures are designed to correlate to usage behaviors of each class. Section 4.4 details how customer water connections and water use patterns affect the costs of providing services, and objectively apportion costs to classes of customers based on costs incurred and the burden placed on various system components. This multi-step process involves first functionalizing costs, objectively allocating those costs to system components, determining units of service for each system component, and distributing costs to customer classes in proportion to their benefit/burden on the system (the result shown in Table 4-39). Class costs are then used to derive cost-justified rates by class and sub-class, demonstrated in the extensive build up in Section 4.5.

Seventh Objection
Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

Seventh, I object because the City has not provided adequate visibility into what cost discipline has actually occurred before coming back to the public for more money. The public should not be expected to accept repeated rate studies and repeated increases without a clear accounting of what operating costs were cut, what costs remain subject to reduction, what consultant scopes were eliminated, what work could have been handled internally, and what management actions were taken to prevent predictable wear and tear from becoming another basis for higher rates.

Response to Objection 7: This objection is a repeat of the Third and Fifth Objections. Please refer to responses to Third and Fifth Objections.

Requests:

Request 1. Reject the proposed water and sewer rate increases, or substantially reduce them; Response to Request 1: City staff has provided its recommendation at the end of this Response.

Request 2. Continue the matter for further review and provide a more detailed written response to these objections before adopting any new rates;
Response to Request 2: City staff has provided its recommendation at the end of this Response.

Request 3. Identify with specificity which wastewater assets are original 1961-era assets, which were upgraded or added later, which assets are truly at end of useful life, and which projects are mandatory versus discretionary;
Response to Request 3: See Response to Objection 2 and 5, above.

Request 4. Provide a clear accounting of what has changed since the 2021 rate study, including what costs were mitigated, what efficiencies were achieved, and why another rate increase cycle is now being proposed;
Response to Request 4: See the Rate Study, and Responses to the First, Third, Fourth, Fifth, and Sixth Objections.

Request 5. Provide a project-by-project explanation of what was re-scoped, what was deferred, what alternatives were rejected, what technologies were deployed or considered to reduce operating costs, and what consultant-related expenses were reviewed against available internal talent; and Response to Request 5: See the Rate Study, and Responses to the First, Third, Fourth, Fifth, and Sixth Objections.

Request 6. Include this written objection and protest in the full administrative record and provide the City's written response for presentation to the City Council before any final vote.

Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

Response to Request 6: All written objections and written protests that were timely received by the City in accordance with the timeframe identified in the notice of public hearing will be made a part of the record of the public hearing at which the City Council will consider the water rates described in the Rate Study.

Haven Objection (Wastewater Only)
First Objection
(paraphrased) “Lumping together SFR and MFR for wastewater charges” Response to Objection 1: The proposed rates are proportional within the same class of Residential users.

The City and Raftelis use available data, observations from the community, and informed decision-making to estimate the cost responsibility of each class based on a robust cost of service analysis.

The wastewater system is largely fixed cost. The costs that vary relate largely to power and chemicals and associated use of facilities at the treatment plant. The system (collection and treatment) must be operated, maintained, repaired, and replaced largely disconnected from the volume of wastewater generated. For these reasons (and more described below) service charges by a single Residential classification are costjustified and proportional to the cost of providing service. More specifically:
• The primary differentiator to class rates are the costs of treatment of different strengths (loadings) of wastewater. SFR (Single Family Residential) and MFR (Multi-Family Residential) generate the same strength of wastewater, so there is no difference between the two subclasses. Residential users, regardless of the dwelling unit type, utilize indoor water for the same purposes (e.g., cooking, cleaning, and sanitation). The latest data from the California Association of Sanitation Agencies (CASA) Flow and Loadings Study from Carollo Engineers supports this rationale and demonstrate the same strengths across SFR and MFR connections. • Beyond fixed costs and strengths, SFR and MFR have similar flow characteristics on a dwelling unit basis. This is supported by evaluation of US Census data on typical households occupancies (2.92 persons per household (pph) SFR and 3.37 pph MFR, which when rounded is on average 3 pph); as well as the City’s own billing data (average winter water use, a strong proxy for wastewater generation shows on average 6.51 HCF per month of water use for SFR versus 6.21 HCF per month of water use for MFR, an inconsequential difference in volumes.) Residential wastewater use is generally consistent throughout the year: contributions per household do not change in July versus January and this is true between types of residences (i.e., Single Family Residential (SFR) and Multi-Family Residential (MFR). Further, using water (metered) does not necessarily translate into more/less use of sewer facilities, which is supported by the City’s own customer billing data. For all of Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

these various reasons the single residential service charge is cost-justified and proportional to the cost of providing service.

The objection also contests that there should be different wastewater rates for high users and low users; and different rates for age-restricted properties. When the City analyzes and identifies the systems needed to provide wastewater service to residential customers, as summarized above, the age of residents being served does not impact that analysis. In fact, the City does not know the makeup of the individual households it serves. MFR connections are frequently master-metered water connections which means the City could not identify on a dwelling unit basis high water users from low water users even if it wished to do so.

Second Objection
Objection to the overall increase over the next 5 years Response to Objection 2: While the publicly presented materials focus on high level summaries and broader drivers for rate increases, also publicly available is a detailed report (Water, Wastewater, and Solid Waste Rate Study Report dated April 7, 2026) performed by the City’s contracted utility consulting firm, Raftelis. The rate study report details the need for the proposed annual rate adjustments by methodically stepping through the math of the City’s financial outcomes both with and without the proposed rate increases. The proposed utility rates are based on the costs of providing services which include operating costs, planned capital project costs, existing and planned debt obligations, and prudent cash reserves. The forecast of these costs are shown within the financial plan section of the report.

Rate Study Report Figure 6 (Wastewater) shows the comparison between the two scenarios with and without rate increases. Further, Table 5-13 shows that without rate increases, the Wastewater Enterprise will have a negative ending fund balance by the end of the study period in FY 2030.

Recommended Council Action for Submitted Objections
Therefore, City staff recommends that the City Council: (a) consider the substance of each timely written objection and the written response from City staff; and (b) determine the timely written objections do not result in any amendment to or alteration of the proposed water rates or sewer rates prior to closing the public hearing. This recommendation is based on the analysis included on the City’s website (notably including the Rate Study) and presented as a part of the public hearing on May 26, 2026, and which provides the substantive bases for the City Council’s approval of the water rates and sewer rates as proposed.

Attachment 4

Written Response to Written Objections for Proposed Update to Water Service Rates and Sewer Service Rates
(AB 2257 – Government Code Sections 53759.1 and 53759.2) for Public Hearing on May 26, 2026

Attachment 4

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date: 052626 SWZ ______ TV ______ PWU ______
1 RESOLUTION NO.__________ (CM)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

WATSONVILLE OVERRULING PROTESTS, AND ADOPTING UTILITY

RATES FOR WATER, WASTEWATER, AND SOLID WASTE SERVICES
EFFECTIVE JULY 1, 2026
WHEREAS, the City of Watsonville manages and operates three utility enterprises to provide Water Service, Wastewater Service, and Solid Waste Services to City customers, for which the City charges customers for the reasonable costs of providing those services through the establishment of rates, as set forth in this resolution, and the City manages expenditures of rate revenue through three segregated enterprise funds for water, wastewater, and solid waste services; and
WHEREAS, each of the City’s enterprise fund rates (for water, wastewater, and solid waste) are intended to generate revenues sufficient to adequately fund (for each enterprise) utility operations, maintenance, and capital replacement expenditures, meet debt service obligations, and maintaining a prudent level of reserves, while considering the reasonableness of the rates in comparison to similar or neighboring enterprises; and WHEREAS, under California law, the City is authorized to charge a fee to the property owners or property owners’ “tenants” (who may be collectively referred to as “ratepayers” or “customers”) for the proportionate cost of providing utility services (including water, wastewater, and solid waste services) to each customer in accordance with the procedural and substantive requirements of the voter-approved ballot measure known as “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been judicially interpreted by appellate court decisions). The City refers to those fees as rates (herein referenced as “water rates,” “wastewater rates,” “solid waste rates,” or “rates”); and

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
2 WHEREAS, Under Proposition 218, the City’s utility rates are considered to be a “fee” for a “property-related service” (also referred to as a “property-related fee”), subject to the particular requirements of Constitution Article XIII D, Section 6. A property-related fee is one imposed upon any parcel or person as an incident of property ownership. In general, the City may only increase its existing utility rates if the City (1) calculates the rates in accordance with Proposition 218, (2) conducts a public hearing before City Council, as described in this resolution, and (3) a “timely written protest” is not submitted by property owners representing a majority of the parcels served by the City; and WHEREAS, consistent with those legal requirements, the City is authorized to establish and update rates for utility services (including water, wastewater, and solid waste services) in amounts that do not exceed the estimated reasonable costs of providing the utility services to each customer class, based on the following findings:
1) Revenues derived from the proposed utility rates will not exceed the funds required to provide utility services; and2)Revenues derived from the proposed utility rates will not be used for any purpose other than that for which they were imposed; and 2) The amount of the utility rates imposed upon any parcel or person as an incident of property ownership will not exceed the proportional cost of the service attributable to the parcel; and
3) The utility rates are imposed for services that are actually used by, or immediately available to, the owner of the property in question; and 4) The utility rates are not being imposed for general government services; and
WHEREAS, consistent with those requirements, the City has previously established rates for utility services in accordance with Watsonville Municipal Code Section 6-3.301; and

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
3 WHEREAS, on May 5, 2021, the Council adopted Resolution No. 154-21 (CM), establishing fees, rates, and charges for water, wastewater (sewer), and solid waste services; and
WHEREAS, on July 8, 2025, the Council adopted Resolution No. 184-25 (CM), awarding contract to Raftelis Financial Consultants, Inc., to prepare a cost service analysis and rate study for the City’s Water, Wastewater and Solid Waste Enterprise Funds; and that analysis and study was documented in the “Rate Study” labeled “City of Watsonville / Water, Wastewater, and Solid Waste Rate Study Report / April 7, 2026”; and
WHEREAS, the overall purpose of the Rate Study was to develop a proposed fiveyear schedule of water, wastewater, and solid waste rates to cover the estimated projected costs of providing utility services for fiscal years 2027 through 2031; and WHEREAS, the analysis in that Rate Study supports the City proposing rate updates for its water, wastewater and solid waste utilities as set forth in this resolution, as necessary to meet current and future fiscal obligations, including debt service obligations, to properly operate and maintain critical infrastructure, to fund capital projects, to comply with new regulations, and to maintain the current level of service for the utility services; and
WHEREAS, on March 24, 2026, (a) the Council adopted Resolution No. 58-26 (CM) accepting the results of the financial analysis and utility rate recommendations supported by the Rate Study, directing staff to provide legally required public notice of public hearing to consider the proposed utility rates; and (b) the Council adopted Resolution No. 59-26 (CM) establishing utility rate setting procedures for water, wastewater, and solid waste rates under Proposition 218, and Assembly Bill 2257 (Government Code Sections 53759.1 through 53759.2). Resolution No. 59-26 (CM) may

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
4 be referred to herein as the “Procedural Resolution,” and it establishes a process for considering written protests for all three utilities (water, wastewater, and solid waste) and a process for considering written objections for water rates and wastewater rates; and WHEREAS, consistent with the requirements of Proposition 218, the City mailed a Notice of Public Hearing to property owners and tenant customers on April 1, 2026, regarding the proposed water, wastewater, and solid waste collection rate changes; and the notice was posted on the City’s website at https://watsonville.gov/2577/ProposedUtility-Rate-Adjustments, along with other information posted on that website relevant to the updated utility rates set forth in this resolution, including the Rate Study, an identification of the public hearing on May 26, 2026, as well as the deadline for filing written objections to water rates and wastewater rates on May 20, 2026, at 5:00 p.m.; and WHEREAS, on Tuesday, May 26, 2026, at the 6:30 p.m. session, the City Council conducted a public hearing on the new proposed rates for water, wastewater, and solid waste more than 45 days after the April 1, 2026, Notice was mailed. The public hearing was held at the meeting place of the City Council, located in the City Council Chambers, 275 Main Street, (4th) Fourth Floor, Watsonville, California, to take testimony and for hearing protests in relation to the proposed fees, rates, and charges, for tabulation of protests, notices of which hearing were mailed as required by law; and WHEREAS, consistent with the Procedural Resolution, prior to the close of the public hearing on May 26, 2026, the City Council considered any timely written objections, and City staff’s written responses thereto, and the City Council incorporated into the water rates and wastewater rates on Exhibit A any reduction, alteration, or clarification to the water rates that were warranted by those written objections and written responses; and WHEREAS, at the close of the public hearing on May 26, 2026, the City Council considered all timely written protests to the proposed update to utility rates and

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
5 determined that the City did not receive a majority protest for any of the utility rates since the number of timely written protest from owners (or qualified tenants) represented less than a majority of the total parcels served for each of the utility services for: City water services 14,748 parcels, City wastewater services 11,480 parcels, or City solid waste services 10,027 parcels; and, therefore, a majority protest was not received before the close of the public hearing, and the City Council overruled any protests that were received; and
WHEREAS, this Resolution is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Public Resources Code Section 21080(b)(8), and California Code of Regulations Section 15273 (of the “CEQA Regulations”) because it establishes, modifies, structures, or restructures, and approves rates and charges for the purposes of:
(1) meeting operating expenses; (2) purchasing supplies, equipment and materials; (3) meeting financial requirements; and (4) obtaining funds for capital projects necessary to maintain service within existing incorporated City limits.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS:

1. Findings. The above findings are true and correct and incorporated herein.

2. No Majority Protest; Protests Overruled. It is hereby determined that, upon the conclusion of the public hearing, and after tabulation of the written protests received prior to the close of the public hearing, there is no majority protests against the utility rates set forth on Exhibit “A”, because the written protests received in opposition to the utility rates did not exceed (50%) fifty percent of the parcels served by City utility services.

3. Utility Rates for Water, Wastewater, and Solid Waste. The City Council hereby approves the utility rates for water, wastewater, and solid waste services, as

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
6 described in Exhibit “A”, attached hereto and incorporated herein by reference. The utility rates shall be implemented in accordance with this Resolution. Upon the effective date of the utility rates, they shall supersede any and all previously approved fees, rates, and charges inconsistent therewith. The utility rates are approved based on the City Council’s determination that the recitals set forth in this Resolution are true and correct and, accordingly, are incorporated as a material part of this Resolution. a. Effective Date of Utility Rates. The Utility Rates (for water, wastewater, and solid waste services) set forth on Exhibit “A” shall be effective July 1, 2026, for all rates under the columns labeled “Proposed / Propuesta para 2027” for each of the respective Utility Rates for Water Rates, Sewer (Wastewater) Rates, and Solid Waste Rates.

Thereafter, the City Manager (or authorized designee), is authorized to administratively adjust the rates on an annual basis without additional action by City Council; provided, however, the effective date of each such annual adjustment shall be no sooner than the last to occur of: (i) 30 days after written notice is provided in accordance with Government Code Section 53756, and (ii) July 1 of each year between 2027 and 2030. The amount of each annual adjustment shall correspond to the fiscal year identified on Exhibit “A.” Thus, as examples, the rates for July 1, 2027 are under the columns labeled “Proposed / Propuesta para 2028”; and the rates for July 1, 2030 are under the columns labeled “Proposed / Propuesta para 2031.
b. For each Utility Rate, the City Manager (or authorized designee) shall determine, based on the analysis set forth in the Rate Study, this Resolution, and the Watsonville Municipal Code: (i) the applicable rows of rates for the utility services provided to each customer; and (ii) any applicable measurement of variable services provided (for example: determining the volume of water provided for the Consumption Charges of Water

Reso No. (CM)
Reference: Reso No. 154-21 (Rescind)
Meeting Date:
7 Rates; and determining the flow and strength of discharges for Commercial Charges and Industrial Charges for Wastewater Rates.
c. The Utility Rates shall not be set in an amount that exceeds those set forth in this Section 2 unless the City Council first conducts a noticed public hearing in accordance with the requirements of law including Proposition 218. d. The Utility Rates established by this Resolution are fixed by the City Council in accordance with Watsonville Municipal Code Section 6-3.301, and shall be paid by all customers of City utility services for water services, wastewater services, and solid waste services under Watsonville Municipal Code Title 6 (Sanitation and Health) Chapter 3 (City Utilities).
********************************

EXHIBIT A
Water Rate Tables (Current 2026 and Proposed 2027 to 2031) Meter Size Availability Fee
($/Month)
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Inside City
5/8" $29.93 $32.16 $33.77 $35.46 $37.23 $39.09
3/4" $29.93 $32.16 $33.77 $35.46 $37.23 $39.09
1" $59.43 $65.01 $68.26 $71.67 $75.26 $79.02
1-1/2" $108.61 $119.75 $125.74 $132.02 $138.63 $145.56
2" $167.61 $185.45 $194.72 $204.46 $214.68 $225.42
3" $324.96 $360.64 $378.67 $397.61 $417.49 $438.36
4" $501.98 $557.73 $585.62 $614.90 $645.64 $677.92
6" $993.70 $1,105.20 $1,160.46 $1,218.48 $1,279.41 $1,343.38 8" $1,583.78 $1,762.16 $1,850.27 $1,942.78 $2,039.92 $2,141.92 Outside City
5/8" $35.15 $38.92 $40.87 $42.91 $45.05 $47.31
3/4" $35.15 $38.92 $40.87 $42.91 $45.05 $47.31
1" $72.48 $81.92 $86.02 $90.32 $94.83 $99.57
1-1/2" $134.71 $153.58 $161.26 $169.32 $177.79 $186.68
2" $209.39 $239.57 $251.55 $264.13 $277.33 $291.20
3" $408.51 $468.88 $492.32 $516.94 $542.79 $569.93
4" $632.52 $726.86 $763.20 $801.36 $841.43 $883.50
6" $1,254.80 $1,443.46 $1,515.63 $1,591.41 $1,670.99 $1,754.53 8" $2,001.52 $2,303.37 $2,418.54 $2,539.47 $2,666.44 $2,799.76 Consumption Charge
($/CCF)
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Residential and MultiResidential
1 of 6 Page 719 of 735
Tier 1 (0–6
CCF/Month)
$4.11 $4.32 $4.54 $4.76 $5.00 $5.25
Tier 2 (7–12
CCF/Month)
$5.38 $5.50 $5.78 $6.06 $6.37 $6.69
Tier 3 (over 12
CCF/Month)
$8.33 $7.58 $7.96 $8.36 $8.77 $9.21
Non-Residential
Uniform $4.91 $5.08 $5.33 $5.60 $5.88 $6.17
Industrial
Uniform $3.91 $4.20 $4.41 $4.63 $4.86 $5.11
Irrigation
Uniform $7.02 $6.89 $7.23 $7.60 $7.98 $8.37
Fire Service Availability
Charge ($/Month)
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Inside City
2" and smaller $18.23 $18.42 $19.34 $20.31 $21.32 $22.39 4" $39.06 $40.31 $42.33 $44.44 $46.66 $49.00
6" $86.38 $90.04 $94.54 $99.27 $104.23 $109.44
8" $168.00 $175.82 $184.61 $193.84 $203.53 $213.71
10" $290.77 $304.84 $320.08 $336.09 $352.89 $370.53
Outside City
2" and smaller $18.23 $18.42 $19.34 $20.31 $21.32 $22.39 4" $39.06 $40.31 $42.33 $44.44 $46.66 $49.00
6" $86.38 $90.04 $94.54 $99.27 $104.23 $109.44
8" $168.00 $175.82 $184.61 $193.84 $203.53 $213.71
10" $290.77 $304.84 $320.08 $336.09 $352.89 $370.53
2 of 6 Page 720 of 735
Sewer (Wastewater) Rate Tables (Current 2026 and Proposed 2027 to 2031) Wastewater Service
Rates
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Residential Monthly
Fixed Charge
Residential (SFR &
MFR)
$61.51 $70.42 $78.87 $83.60 $88.62 $93.94
Commercial Minimum
Monthly Fee
All Commercial
Accounts
$33.93 $35.04 $39.24 $41.60 $44.10 $46.74
Commercial Charges
per CCF of Water
High Strength ($/CCF) $7.90 $8.50 $9.52 $10.09 $10.70 $11.34 Low Strength ($/CCF) $4.56 $5.31 $5.95 $6.30 $6.68 $7.08 Industrial Charges
Flow ($/MG) $3,194.97 $4,359.89 $4,883.08 $5,176.06 $5,486.63 $5,815.82 BOD ($/1,000 LB) $318.28 $528.20 $591.58 $627.08 $664.70 $704.59 TSS ($/1,000 LB) $765.91 $592.23 $663.30 $703.10 $745.28 $790.00 Solid Waste Rate Tables (Current 2026 and Proposed 2027 to 2031) Weekly Pickup
Service ($/Month)
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Cart Service
32 gal $45.41 $46.16 $47.08 $48.02 $48.99 $49.97
68 gal $76.21 $77.63 $79.18 $80.77 $82.38 $84.03
95 gal $99.32 $101.24 $103.26 $105.33 $107.44 $109.59
Container Service
1 cu yd $190.84 $194.77 $198.67 $202.64 $206.69 $210.83

1.5 cu yd $277.23 $283.06 $288.72 $294.50 $300.39 $306.39 3 of 6 Page 721 of 735
2 cu yd $363.64 $371.35 $378.78 $386.35 $394.08 $401.96 3 cu yd $536.45 $547.94 $558.90 $570.08 $581.48 $593.11 4 cu yd $709.24 $724.53 $739.02 $753.80 $768.88 $784.25 6 cu yd $1,054.85 $1,077.71 $1,099.26 $1,121.25 $1,143.67 $1,166.55 8 cu yd $1,400.47 $1,430.88 $1,459.50 $1,488.69 $1,518.46 $1,548.83 Drop Box Service
20 cu yd $3,474.10 $3,549.94 $3,620.94 $3,693.36 $3,767.22 $3,842.57 25 cu yd $4,338.12 $4,432.88 $4,521.54 $4,611.97 $4,704.21 $4,798.29 30 cu yd $5,202.14 $5,315.82 $5,422.14 $5,530.58 $5,641.19 $5,754.01 35 cu yd $6,066.16 $6,198.76 $6,322.74 $6,449.19 $6,578.17 $6,709.74 40 cu yd $6,930.18 $7,081.70 $7,223.33 $7,367.80 $7,515.16 $7,665.46 Compactor Drop Box
Service
3 cu yd $1,573.26 $1,607.47 $1,639.62 $1,672.41 $1,705.86 $1,739.98 4 cu yd $2,091.68 $2,137.23 $2,179.97 $2,223.57 $2,268.05 $2,313.41 10 cu yd $5,202.14 $5,315.82 $5,422.14 $5,530.58 $5,641.19 $5,754.01 15 cu yd $7,794.20 $7,964.64 $8,123.93 $8,286.41 $8,452.14 $8,621.18 20 cu yd $10,386.24 $10,613.45 $10,825.72 $11,042.23 $11,263.08 $11,488.34 22 cu yd $11,423.07 $11,672.98 $11,906.44 $12,144.57 $12,387.46 $12,635.21 25 cu yd $12,978.30 $13,262.27 $13,527.52 $13,798.07 $14,074.03 $14,355.51 30 cu yd $15,570.35 $15,911.09 $16,229.31 $16,553.90 $16,884.98 $17,222.68 35 cu yd $18,162.41 $18,559.91 $18,931.11 $19,309.73 $19,695.92 $20,089.84 40 cu yd $20,754.45 $21,208.73 $21,632.90 $22,065.56 $22,506.87 $22,957.01 Solid Waste
(Organics)
Collections
68 gal $76.21 $77.63 $79.18 $80.77 $82.38 $84.03
1 cu yd $190.84 $194.77 $198.67 $202.64 $206.69 $210.83 4 of 6 Page 722 of 735
2 cu yd $363.64 $371.35 $378.78 $386.35 $394.08 $401.96 3 cu yd $536.45 $547.94 $558.90 $570.08 $581.48 $593.11 Temporary/On-call
Services ($/Pickup)
Current
2026
Proposed
2027
Proposed
2028
Proposed
2029
Proposed
2030
Proposed
2031
Temporary Use
Containers
1 cu yd $47.72 $48.70 $49.67 $50.67 $51.68 $52.71

1.5 cu yd $69.32 $70.77 $72.19 $73.63 $75.10 $76.60
2 cu yd $90.92 $92.84 $94.70 $96.59 $98.52 $100.49
3 cu yd $134.12 $136.99 $139.73 $142.52 $145.37 $148.28 4 cu yd $177.32 $181.14 $184.76 $188.46 $192.23 $196.07 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 8 cu yd $350.12 $357.72 $364.87 $372.17 $379.62 $387.21 On-call Drop Box
Service ($/Pickup)
20 cu yd (<1/2 full) $436.52 $446.02 $454.94 $464.04 $473.32 $482.79 20 cu yd $868.53 $887.49 $905.24 $923.34 $941.81 $960.65 25 cu yd $1,084.53 $1,108.22 $1,130.38 $1,152.99 $1,176.05 $1,199.57 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 35 cu yd $1,516.54 $1,549.69 $1,580.68 $1,612.30 $1,644.54 $1,677.43 40 cu yd $1,732.55 $1,770.43 $1,805.84 $1,841.96 $1,878.79 $1,916.37 50 cu yd $2,164.56 $2,211.90 $2,256.14 $2,301.26 $2,347.29 $2,394.23 On-call Compactor
Drop Box Service
($/Pickup)
3 yd Compactor $393.32 $401.87 $409.91 $418.11 $426.47 $435.00 4 yd Compactor $522.93 $534.31 $545.00 $555.90 $567.01 $578.35 5 of 6 Page 723 of 735
10 yd Compactor $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 12 yd Compactor $1,559.74 $1,593.84 $1,625.72 $1,658.23 $1,691.40 $1,725.22 15 yd Compactor $1,948.55 $1,991.16 $2,030.98 $2,071.60 $2,113.03 $2,155.30 20 yd Compactor $2,596.57 $2,653.37 $2,706.44 $2,760.57 $2,815.78 $2,872.09 22 yd Compactor $2,855.77 $2,918.25 $2,976.62 $3,036.15 $3,096.87 $3,158.81 25 yd Compactor $3,244.58 $3,315.57 $3,381.88 $3,449.52 $3,518.51 $3,588.88 30 yd Compactor $3,892.60 $3,977.78 $4,057.34 $4,138.48 $4,221.25 $4,305.68 40 yd Compactor $5,188.62 $5,302.19 $5,408.23 $5,516.40 $5,626.73 $5,739.26 Temporary Special
Use
Containers(Wood
Waste, Yard
Trimmings, & Scrap
Metal) ($/Pickup)
4 cu yd $177.32 $181.14 $184.76 $188.46 $192.23 $196.07 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 20 cu yd $868.53 $887.49 $905.24 $923.34 $941.81 $960.65 25 cu yd $1,084.53 $1,108.22 $1,130.38 $1,152.99 $1,176.05 $1,199.57 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 35 cu yd $1,516.54 $1,549.69 $1,580.68 $1,612.30 $1,644.54 $1,677.43 40 cu yd $1,732.55 $1,770.43 $1,805.84 $1,841.96 $1,878.79 $1,916.37 Temporary Recycling
($/Pickup)
3 cu yd $134.12 $136.99 $139.73 $142.52 $145.37 $148.28 6 cu yd $263.73 $269.43 $274.82 $280.31 $285.92 $291.64 15 cu yd $652.53 $666.75 $680.09 $693.69 $707.56 $721.71 30 cu yd $1,300.54 $1,328.96 $1,355.54 $1,382.65 $1,410.30 $1,438.51 6 of 6 Page 724 of 735
1 CITY COUNCIL AGENDA REPORT
MEETING DATE: Tuesday, May 26, 2026
TO: CITY COUNCIL
WRITTEN BY: ASSISTANT FINANCE MANAGER NOLASCO
RECOMMENDED BY: ADMINISTRATIVE SERVICES DIRECTOR DURAN
APPROVED BY: TAMARA VIDES, CITY MANAGER
SUBJECT: AMENDMENTS TO THE CITY’S PURCHASING ORDINANCE
RECOMMENDATION:

Staff recommend that the City Council:

Introduce, for first reading only, waiving full reading of the text, amendments to Chapter 5 (Purchasing Procedures) of Title 3 (Finance) of the Watsonville Municipal Code related to the City’s purchasing procedures.

BACKGROUND:

The City’s purchasing ordinance establishes the City’s procedures and framework for the procurement of goods and services, including bidding thresholds and procedures, award authority, and signing authority for contracts. For public works projects, the ordinance outlines contract signing authority, while the formal bidding requirements are governed by the California Uniform Public Construction Cost Accounting Act (CUPCCAA), which the City has adopted to ensure compliance with state standards. The ordinance is intended to ensure that public funds are expended in a manner that promotes transparency and fiscal responsibility.

Council last approved changes to the ordinance in 2020; at that time, the Council repealed the existing Chapter 5 and added a new Chapter 5. Staff has now identified opportunities to improve, simplify and align Chapter 5 with how we are conducting business today while maintaining appropriate oversight and accountability.

Public Works purchasing is controlled by Chapter 14 of Title 7 of the City’s Municipal Code. The proposed updates to the purchasing ordinance do not make any changes to Chapter 14 (Public Works) but do

2 incorporate a reference to Chapter 14 and a section establishing contract signing authority related to Public Works contracts.

DISCUSSION:

As good practice, periodic review of the purchasing ordinance is necessary to determine if the ordinance is 1) easily understood and interpreted, 2) remains in line with best practices, and 3) meets the City’s need for transparency and accountability 4) the current authority for contract expenditures up to $100,000 is consistent with existing authorization provided to the City Manager under the Purchasing Procedure Policy in Section 3-5.530.

While most of the changes are minor and administrative in nature, some major changes are being recommended. The recommended changes are consistent with the City Manager’s existing purchasing authority. These changes include:

1. Adding the following (sections b and c) to Article 1, Sec. 3-5.170 Contract Changes:
 The City Manager may approve monetary changes to contracts or purchase orders previously approved by the Council under the following circumstances: 1) the total amount of funds added to the contract does not exceed $99,999; and 2) the Director of Finance or her designee determines the additional funds are available in the budget and the request complies with the procedural requirements of this Code and any applicable City policies or procedures. Any changes to contracts or purchase orders in excess of $99,999, cumulative, require Council approval, regardless of amount.  The City Manager may approve extensions of the end date of contracts or purchase orders previously approved by Council. All other non-monetary contract amendments to contracts originally approved by Council shall require Council approval.

2. Adding the following sections to 3-5.196, Contract Execution:
 Contracts for Public Works Projects, as defined in Chapter 14 of Title 7, must comply with the bidding procedures and bidding thresholds established by the California Public Contract Code 22032, as revised from time to time. The following provisions apply to contracts for Public Works Projects:
(1) Contracts for less than Ten Thousand and no/100ths ($10,000.00) Dollars may be approved and signed by the Department Head;
(2) Contracts for Ten Thousand and No/100ths ($10,000.00) Dollars to Two Hundred Twenty Thousand and No/100ths ($220,000.00) Dollars may be approved by the City Manager; and
(3) Contracts over Two Hundred Twenty Thousand and No/100ths ($220,000 must be approved by Council

3  Revising Section 3-5.196(a) to be consistent with the above revision.

Next Steps:

The Municipal Code allows the City Manager to promulgate administrative regulations to implement the Municipal Code. The Administrative Services Director may recommend forms and regulations to the City Manager from time to time for adoption to implement this ordinance. It is also recommended that the proposed changes to the ordinance be implemented in the City’s Administrative Rules and Regulations.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION:

The proposed project is not a “project” as defined by CEQA guidelines as it involves fiscal planning that does not have the potential to result in a reasonably foreseeable change in the environment.

STRATEGIC PLAN:

Efficient and Well-Performing Government – The proposed changes to the purchasing ordinance supports this goal by improving our purchasing policy and promoting an efficient purchasing process Fiscal Health – The proposed changes also contribute to the City’s strategic goal of fiscal health by providing a purchasing policy that is clear, transparent, and mitigates risk for the City.

FINANCIAL IMPACT:

There is no direct fiscal impact associated with the adoption of the proposed changes to the ordinance.

These changes are administrative in nature and intended to improve efficiency and clarity in the City’s purchasing processes.

ALTERNATIVE ACTION:

NONE
ATTACHMENTS AND/OR REFERENCES (IF ANY):
1) Non-Public Works Contract Change Order form

Change Orders up to $99,999 in cumulative changes must be approved by City Manager & Admin Services Director for contracts previously approved by Council Department:

Contract/ PO Number: Change Order No.

Vendor Name City Project No:

Description of Work: (change order) Fund Org Object Project Amount The Contract/PO Sum will be increased by this change Order(s) in the Amount of $0.00 Original Contract/PO Amount
The New Contract/PO Sum Including this Change Order will be $0.00 Percent Increase: #DIV/0!
Approved Budget Amount
Requested: Approved:

City Staff Date Department Director Date
Approved: Approved:

Director of Administrative Services Date City Manager Date CITY OF WATSONVILLE - Change Order Request
Non Public Works Change Order limits:

If the cumulative result of the Change Overs goes from under $100,000 to over $100,000 it MUST be approved by Council Change Orders over $99,999 in cumulative changes MUST be approved by Council If this is a Public Works project, use Public Works Change Order Request form Attachment 1

1 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626 SWZ ______ TV ______ Finance ______ ORDINANCE NO. Introduction (CM)
AN ORDINANCE OF THE CITY OF WATSONVILLE AMENDING CHAPTER 5 (PURCHASING PROCEDURES) OF TITLE 3 (FINANCE) OF THE

WATSONVILLE MUNICIPAL CODE

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. FINDINGS
The City Council of the City of Watsonville finds that the above referenced recitals are true and correct and incorporated into this Ordinance.

SECTION 2. ENACTMENT
Sections 3-5.170 (Contract changes), 3-5.196 (Contract execution), 3-5.210 (Exemptions from Chapter 5), 3.5-410 (Bids – Notice of invitation and submission) of Chapter 5 (Purchasing Procedures) of Title 3 (Finance) are amended as shown in Exhibit A, attached hereto and incorporated herein by reference. Additions are reflected by underline, and deletions are reflected by strikethrough.

SECTION 3. ENVIRONMENTAL REVIEW
Enacting amendments to this Ordinance is not subject to review under the California Environmental Quality Act (CEQA) pursuant to Public Resources Code section 21000, et seq. and the CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et. seq.), including without limitation, Public Resources Code section 21065 and California Code of Regulations 15378 as enacting said amendments is not a “project” that may cause a direct, or reasonably foreseeable indirect, physical change in the environment as it is an administrative change in the limitations on campaign funding contributions.

SECTION 4. SEVERABILITY

2 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626
If any section, subsection, sentence, clause or phrase or word of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance.

SECTION 5. PUBLICATION
This ordinance shall be published in the Watsonville Register-Pajaronian and/or Santa Cruz Sentinel in compliance with the provisions of the Charter of the City of Watsonville.

SECTION 6. EFFECTIVE DATE
This Ordinance shall take effect thirty (30) days after passage by the City Council. *****************************

3 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626

EXHIBIT A
3-5.170 Contract changes.

All contract changes (e.g., amendments to contracts, amended contracts, addenda, additive or deductive change orders, changes in scope of work or changes to contract expiration date) shall reasonably relate to the scope of the original contract and be based on post-award information that requires modification of the contract based on unforeseen conditions or by mutual agreement of the parties and must return to the original signing authority for approval unless:
(a) The cumulative result of changes pushes the total contract or purchase order amount into the next level approver’s authority; i.e., if the cumulative result of the changes goes from under One Hundred Thousand and no/100ths ($100,000.00) Dollars to over One Hundred Thousand and no/100ths ($100,000.00) Dollars, it must be approved by Council, even if the original contract was not required to be approved by the Council.
(b) The City Manager may approve monetary changes to contracts or purchase orders previously approved by the Council under the following circumstances: 1) the total amount of funds added to the contract does not exceed $99,999; and 2) the Director of Finance or her designee determines the additional funds are available in the budget and the request complies with the procedural requirements of this Code and any applicable City policies or procedures. Any changes to contracts or purchase orders in excess of $99,999, cumulative, require Council approval, regardless of amount. (c) The City Manager may approve extensions of the end date of contracts or purchase orders previously approved by Council. All other non-monetary contract amendments to contracts originally approved by Council shall require Council approval. (b d) An emergency requires that action be taken immediately, in which case approval by the signing authority should occur at the next possible date. (Ord. 1403-20 (CM), eff.

May 28, 2020)

4 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626
3-5.196 Contract execution.
(a) Other than contracts noted in subsection (c) below, only the City Manager and, in the City Manager’s absence, the Assistant or Deputy City Manager authorized by the City Manager, may sign contracts on behalf of the City. No other employee is authorized to sign a contract binding the City, and may make such contract voidable. (b) Before a contract is signed by the City Manager or placed on a City Council agenda for approval, the contract must:
(1) Include appropriate insurance and indemnification provisions reviewed by and approved by the City’s Risk Manager or City Attorney; (2) Be approved as to form by the City Attorney;
(3) Be approved as to budget availability and purchasing procedural compliance by the Finance Director; and
(4) Be executed by the other party (except in the instance of a public entity). (Ord. 1403-20 (CM), eff. May 28, 2020)
(c) Contracts for Public Works Projects, as defined in Chapter 14 of Title 7, must comply with the bidding procedures and bidding thresholds established by the California Public Contract Code 22032, as revised from time to time. The following provisions apply to contracts for Public Works Projects:
(1) Contracts for less than Ten Thousand and no/100ths ($10,000.00) Dollars may be approved and signed by the Department Head; (2) Contracts for Ten Thousand and No/100ths ($10,000.00) Dollars to Two Hundred Twenty Thousand and No/100ths ($220,000.00) Dollars may be approved by the City Manager; and
(3) Contracts over Two Hundred Twenty Thousand and No/100ths ($220,000.00) must be approved by Council.

5 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626
3-5.210 Exemptions from Chapter 5.

Purchases are exempt from the requirements of this chapter if:
(a) An emergency requires that an order be placed with the nearest available source of supply, service or equipment;
(b) Reasonable attempts have been made to obtain informal bids or proposals, and less than three (3) proposals can be obtained.
(c) Equipment, supplies or nonprofessional services are unique, available only from one (1) source, or sought to match existing equipment or supplies already in use (also known as a sole source purchase);
(d) Equipment, supplies or nonprofessional services have been uniformly adopted or otherwise standardized in the City. In this case, evidence for the standardization shall be documented and maintained as a public record and approved by the Purchasing Officer before the purchase and then at least once every five (5) years; (e) The purchase is made cooperatively with one (1) or more other units of government through cooperative purchasing programs substantially the same as the City of Watsonville’s and the purchase is consistent with the terms of a written agreement between the City and the vendor;
(f) When in the opinion of the Purchasing Officer the equipment, supplies and nonprofessional services are available from a vendor who has been selected as the lowest bidder within the prior twelve (12) months by another public entity using competitive bidding procedures substantially the same as those used by the City for the acquisition of such equipment or supplies (sometimes called “piggybacking”); (g) The purchase of used supplies or equipment;
(h) Contracts for professional witness services if the purpose of such contracts is to provide for professional advice services or testimony relating to an existing or probable judicial proceeding in which the City is or may become a party, including contracts for special investigative services for law enforcement purposes;

6 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626
(i) Agreements negotiated and/or prepared by the City Attorney or special counsel in connection with the settlement of a dispute, claim, or matter of litigation or threatened litigation;
(j) Contracts to commission original works of art, and for fine art or entertainment; (k) The purchase of books, magazines, newspapers, subscriptions, online library reference services, film, videos, and assorted materials for which contracts by competitive bid solicitation are not practical;
(l) Specialized seminar, training, and educational classes; (m) Contracts for election services;
(n) Contracts for legal services;
(o) Franchise agreements; and
(p) Contracts for procuring and maintaining insurance policies. (Ord. 1403-20 (CM), eff. May 28, 2020)
3-5.320 Quotations—Submission in writing—Recordkeeping.

Written quotations, received via mailed letter, fax or email or submitted electronically are required, and a record of open market quotations and orders shall be kept in accordance with the City’s record retention policy after the receipt of such quotations. (Ord. 1403-20 (CM), eff. May 28, 2020)
3-5.410 Bids—Notice of invitation and submission.
(a) Notices inviting bids or requesting proposals shall include, but not be limited to, the following:
(1) General description of the equipment, supplies or nonprofessional services to be purchased;
(2) Location where bid form blanks and specifications may be obtained; (3) Time and place assigned for the opening of sealed bids; (4) Type and character of bidder’s security required, if any;

7 Ord. No. ______ (CM)
Reference: Ord. No. 1403-20 (Amend)
Meeting Date: 052626
(5) Location and deadline for submission of bids;
(6) Form of contract; and
(7) Insurance requirements.
(b) Notices inviting bids or requesting proposals shall be published on the City’s web site, eBid or other recognized bidding sites or list serves. (c) Sealed bids or proposals shall be identified as such and submitted by the closing date and time. (Ord. 1403-20 (CM), eff. May 28, 2020)