City Council

10C. CONSIDERATION OF A RESOLUTION PROVIDING DIRECTION TO COMPLETE A WATER COST-OF-SERVICE STUDY AND DIRECT STAFF TO PREPARE A DRAFT PROPOSITION 218 NOTICE FOR A FUTURE PUBLIC HEARING Staff Recommendation 1. Receive a report, consider public comment and provide direction regarding inclusion the following components in the Cost-of-Service Study to be returned to City Council for further review and consideration: a. Develop a uniform rate for all customers. b. Increase the total fixed revenue recovery from 32% to 36% to continue improving revenue stability that is more aligned with the City’s fixed costs. c. Continue to utilize a pass-through approach to clearly distinguish (a) the external costs of imported water from (b) the City’s costs of treating, storing, and delivering that water. d. Include Municipal Water District of Orange County fixed costs in fixed meter charges. e. Institute new Demand Management Rates based on the six stages of water shortage levels ranging from 10%-50% water reduction. f. Develop a five-year rate increase. AND 2. Adopt Resolution No 25-140, which will direct staff and the consultant to complete the Water Cost-of-Service Study based on the City Council’s direction as to components to be included for further review and consideration and direct staff to prepare a draft Proposition 218 notice for consideration at the November 18, 2025 City Council Meeting.