Your City Council has adopted pricing designed to penalize residents who conserve water and encourage water usage by residents who do not practice conservation of water, antithetical to the State of California history of drought. Excerpts of the Proposition 218 Notice follows:

The City’s water rate design is a two-part structure comprised of a “Fixed Meter Charge” that is assessed based on meter size and a consumption-based “Water Usage Rate” that is assessed based on the total amount of water that is used. Together, the two components of the City’s water rates are structured to recover the entire costs of providing water service and to proportionately allocate those costs among the City’s customers. 

The proposed water rates were developed by a comprehensive cost-of-service analysis and are designed to meet the Water Enterprise’s revenue needs over the next five years, including replacement of deteriorating infrastructure. If approved, there will be a modification to the City’s existing water rate structure to more closely reflect the water utility’s fixed versus variable costs. In addition to reflecting the City’s cost of providing service, the modified rate structure will stabilize revenue by increasing the proportion of revenue that is collected through the fixed charge. 

Rates need to be adequate to recover the expenses, while ensuring that costs are equitably allocated so that rates are fair and in proportion to the services received by the various customer classes. The rate study report will be available on the City’s website as of April 3, 2019. The rate study modeled the costs of operating and maintaining the water system for the next ten years. Current operating costs were based on recent actual and budgeted expenditures and those costs were inflated in order to forecast operating costs for future years. Capital expenditures were forecasted based on the City’s capital needs, which include a significant increase in aging water pipe replacements and rehabilitation of deteriorating reservoirs and wells. 

The proposed monthly rates for residents in the Fixed Meter Charge effective July 1 in each year as set forth in the table below.

Meter	2019	2020	2021	2022	2023
5/8”	$26.07	$29.72	$32.99	$34.64	$36.02
1”	$41.30	$47.08	$52.26	$54.87	$57.07
1 1/2″	$79.39	$90.50	$100.46	$105.48	$109.70

The proposed Water Usage Rates are set forth in the tables below (as measured in thousands of gallons or “TGAL” on a monthly basis and effective in each year starting July 1):

Tier	Allocation	2019	2020	2021	2022	2023
1	12,800 gal*	$2.28*	$2.60	$2.89	$3.03	$3.15
2	20,200 gal	$4.58	$5.22	$5.80	$6.09	$6.33
3	(no limit)	$4.96	$5.65	$6.28	$6.69	$6.85

1. Pursuant to California Government Code Section 53756, usage rates are also subject to additional annual adjustments in accordance with the following formulas which will pass-through increases in costs from wholesale water purveyors (as measured in thousands of gallons or “TGAL”)
2. * increase from 7,500 gallons and decrease from $3.21 so this encourages water usage.