City Council

10C.\nCONSIDERATION OF A RESOLUTION PROVIDING DIRECTION TO\nCOMPLETE A WATER COST-OF-SERVICE STUDY AND DIRECT STAFF TO\nPREPARE A DRAFT PROPOSITION 218 NOTICE FOR A FUTURE PUBLIC\nHEARING\nStaff Recommendation\n1. Receive a report, consider public comment and provide direction regarding\ninclusion the following components in the Cost-of-Service Study to be\nreturned to City Council for further review and consideration:\na. Develop a uniform rate for all customers.\nb. Increase the total fixed revenue recovery from 32% to 36% to\ncontinue improving revenue stability that is more aligned with the\nCity’s fixed costs.\nc. Continue to utilize a pass-through approach to clearly distinguish\n(a) the external costs of imported water from (b) the City’s costs\nof treating, storing, and delivering that water.\nd. Include Municipal Water District of Orange County fixed costs in\nfixed meter charges.\ne. Institute new Demand Management Rates based on the six\nstages of water shortage levels ranging from 10%-50% water\nreduction.\nf. Develop a five-year rate increase.\nAND\n2. Adopt Resolution No 25-140, which will direct staff and the consultant to\ncomplete the Water Cost-of-Service Study based on the City Council’s\ndirection as to components to be included for further review and\nconsideration and direct staff to prepare a draft Proposition 218 notice for\nconsideration at the November 18, 2025 City Council Meeting.