HomeMy WebLinkAboutItem 07a- Public Hearing to adopt Water and Sewer RatesSTAFF REPORT
PUBLIC WORKS SERVICES DEPARTMENT
DATE: December 2, 2025
TO: Honorable Mayor and City Council
FROM: Paul Cranmer, Public Works Services Director
By: Rebecca Cardenas, Management Analyst
SUBJECT: RESOLUTIONS SETTING CITY WATER AND SEWER RATES FOR CALENDAR
YEARS 2026 THROUGH 2030
RESOLUTION NO. 7663 SETTING CITY WATER RATES AND FINDING
THE RATES WILL NOT EXCEED THE ESTIMATED AMOUNT
NECESSARY TO FUND THE OPERATION OF THE CITY WATER SYSTEM
FOR CALENDAR YEARS 2026 THROUGH 2030
CEQA: Exempt
Recommendation: Adopt
RESOLUTION NO. 7664 SETTING CITY SEWER RATES AND FINDING THE
RATES WILL NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO
FUND THE OPERATION OF THE CITY SEWER SYSTEM FOR CALENDAR
YEARS 2026 THROUGH 2030
CEQA: Exempt
Recommendation: Adopt
SUMMARY
On October 7, 2025, the City Council directed the Public Works Services Department
(“PWSD”) to follow Proposition 218 (“Prop 218”) balloting procedures to establish
water and sewer rates and conduct a public hearing. Proposition 218 requires the
mailing of a written notice detailing the proposed rate adjustment to all property
owners and tenants who are responsible for paying the utility bill. The City is
proposing to adjust its water and sewer rates for five years. If approved, the new
rates will become effective and operative for water use and all bills sent after January
1, 2026, and each January 1 thereafter, as set forth in the attached resolutions. All
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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necessary steps have been taken to comply with Prop 218 balloting procedures for
adjusting water and sewer rates.
It is recommended that the City Council conduct a public hearing and, if there is no
majority protest, adopt Resolution Nos. 7663 and 7664 authorizing the proposed rate
adjustments for calendar years 2026 through 2030.
BACKGROUND
The City provides water and sewer services to more than 56,000 residents and
maintains approximately 15,000 service connections, 10 active wells, 15 reservoirs,
168 miles of water mainline, and 135 miles of gravity sewer mainline. Utility rates
fund the operations, maintenance, and capital improvements of the water and sewer
system. Comprehensive water and sewer rate studies are necessary to determine if
water and sewer rate increases are needed to fund ongoing operations and
maintenance budgets, and the Capital Improvement Program. Additionally, rate
studies are needed to maintain an adequate Reserve Fund balance in case of a
natural disaster or emergency, and they provide working capital. Comprehensive
water and sewer cost of service studies not only develop rate schedules that ensure
the City can continue to fund all operating and maintenance costs but also verifies
that the rates associated with these utilities are defensible and comply with
Proposition 218 requirements. On July 16, 2024, the City Council awarded a
Professional Services Agreement to Raftelis to complete a Cost of Service Rate Study
and recommend new five-year water and sewer rate adjustments for calendar years
2026 through 2030.
The Rate Study completed by Raftelis was conducted using industry-standard
principles outlined by the American Water Works Association (“AWWA”) and the
Water Environment Federation (“WEF”). The process and approach Raftelis utilized in
the study to determine water and sewer rates aligns with the City’s policy objectives,
the current water and sewer systems and rates, and the legal requirements in
California, namely, Proposition 218.
DISCUSSION
The 2025 Rate Study relies on Arcadia’s financial and rate models, which were
developed for the City by Raftelis. These models include actual revenues and
operational expenditures, capital improvement costs, and customer usage data,
along with additional items that were necessary to develop financial projections for
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
Page 3 of 13
Effective Date
Revenue
Adjustment
Jan 1, 2026 12.0%
Jan 1, 2027 12.0%
Jan 1, 2028 10.0%
Jan 1, 2029 6.0%
Jan 1, 2030 6.0%
Fiscal Years 2025-26 through 2029-30. The following goals were identified for the
Rate Study:
• Meet the City’s water and wastewater enterprise fiscal needs for operation and
maintenance costs, capital replacement and refurbishment (“R&R”) costs to
maintain the system, reserve goals, and to improve the financial health of each
enterprise;
• Prepare a five-year schedule of water and sewer rates consistent with the cost
of providing service; and
• Allocate the actual costs of service so that various categories of ratepayers are
only required to pay for their proportional share of the cost.
Water Rates
Most of the Water Budget is devoted to operations and maintenance, with water
supply costs representing the largest single expense. The Rate Study financial model
was used to forecast water sales and expenditures. Included in the financial model
is the cost of current and future water supplies, as well as the rising cost of
replacement water and system operation costs. Raftelis, with the assistance of City
staff, conducted a status quo cash flow analysis to evaluate whether existing water
rates can adequately fund the City’s various water-related expenses over the study
period (Fiscal Years 2026 through 2034). The analysis projected annual revenues,
operation and maintenance expenses, and capital expenditures, through Fiscal Years
2026 through 2034. The study indicates that with no rate increases over the study
period, the City will fully deplete its reserves in 2028. As such, revenue adjustments
were developed over the five-year rate-setting period to make sure the Water
Operating Fund has sufficient funds to cover annual expenses, and to build reserves
to target levels by the end of the rate-setting period, in the Year 2030. As shown in
Table 1, the Rate Study recommends that the City increase water revenues by 12%
for Calendar Years 2026 and 2027; 10% for Calendar Year 2028; and 6% for Calendar
Years 2029 and 2030, to fund expected operations, maintenance, and CIP
expenditures, and to maintain a sufficient Reserve Fund balance.
Table 1: Proposed Water Revenue Adjustments
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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The operating reserve target is 25% of annual operating revenue. The rate
stabilization target is 10% of the volume revenue. The capital reserve target is the 5-
year average of cash-funded capital. The City is also starting a Regulatory Reserve,
with the aim to have it reach about $4 million in Fiscal Year 2030 to cover potential
water treatment projects.
The City’s current water rate schedule consists of a bi-monthly service charge, a
tiered volumetric rate for single-family customers (tier blocks change based on meter
size and season), a volumetric rate for multifamily customers with tiers per dwelling
unit, and uniform rates for commercial and other non-residential customers. The
current water rates also include a private fire service bi-monthly charge for those
customers with a dedicated fire service line. Starting in January 2026, the City plans
to switch to monthly water billing. As part of this change, a monthly service charge
was developed. Additionally, a simplified rate structure for the single-family
customer class was created.
The Proposed 2026 calendar year rates were calculated based on the results of the
cost-of-service analysis. Overall, calendar year 2026 rates are designed to collect 12%
more revenue than current rates. Beginning in calendar year 2027, proposed rates
are calculated by increasing the prior year's rates by the proposed annual revenue
adjustments. Table 2 shows the proposed five-year water rate schedule through the
year 2030, including the monthly service charge and the private fire line charge.
Table 2: Proposed Five-Year Water Rate Schedule,
Monthly Service Charge and Private Fireline Charge
Monthly Service Charge 12.0% 10.0% 6.0% 6.0%
Meter Size 2026 2027 2028 2029 2030
5/8" $21.31 $23.87 $26.26 $27.84 $29.52
3/4" $21.31 $23.87 $26.26 $27.84 $29.52
1" $26.54 $29.73 $32.71 $34.68 $36.77
1-1/2" $39.61 $44.37 $48.81 $51.74 $54.85
2" $55.30 $61.94 $68.14 $72.23 $76.57
3" $91.91 $102.94 $113.24 $120.04 $127.25
4" $144.21 $161.52 $177.68 $188.35 $199.66
6" $274.96 $307.96 $338.76 $359.09 $380.64
8" $431.86 $483.69 $532.06 $563.99 $597.83
10" $641.06 $717.99 $789.79 $837.18 $887.42
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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Monthly Private Fire Line Charge
Line Size 2026 2027 2028 2029 2030
5/8" $7.50 $8.40 $9.24 $9.80 $10.39
3/4" $7.50 $8.40 $9.24 $9.80 $10.39
1" $7.50 $8.40 $9.24 $9.80 $10.39
1-1/2" $7.50 $8.40 $9.24 $9.80 $10.39
2" $7.50 $8.40 $9.24 $9.80 $10.39
3" $16.66 $18.66 $20.53 $21.77 $23.08
4" $32.45 $36.35 $39.99 $42.39 $44.94
6" $89.13 $99.83 $109.82 $116.41 $123.40
8" $186.89 $209.32 $230.26 $244.08 $258.73
10" $333.93 $374.01 $411.42 $436.11 $462.28
As shown in Table 3 below, residential rates are tiered, and non-residential rates are
uniform. The residential rate tiers have been condensed from four to three, the tier
breakpoints are the same for all meter sizes, and the seasonal change has been
eliminated. These changes will provide more clarification and parity among water
customers. The multifamily customer class will continue to have a two-tier rate, but
the usage in the first tier is now based on up to 6 hundred cubic feet (“hcf”, or one
unit of water) monthly per dwelling unit, instead of up to 12 hcf bi-monthly per
dwelling unit. The other customer classes will continue to have uniform rates. The
first single-family residential tier provides basic indoor use; the second tier provides
the average summer use in the maximum use month of the year. Multifamily tiers
are similarly set to provide basic indoor use in Tier 1 and the remaining in Tier 2.
Table 3: Proposed Five-Year Water Volumetric Rate Schedule
Customer 2026 2027 2028 2029 2030
Residential
Tier 1: 0-8 $2.61 $2.93 $3.23 $3.43 $3.64
Tier 2: 9-26 $3.03 $3.40 $3.74 $3.97 $4.21
Tier 3: >26 $3.53 $3.96 $4.36 $4.63 $4.91
Multifamily
6 hcf/du $2.59 $2.91 $3.21 $3.41 $3.62
> 6 hcf/du $2.93 $3.29 $3.62 $3.84 $4.08
Governmental, Institution, & Irrigation Customer
All $3.18 $3.57 $3.93 $4.17 $4.43
Commercial
All $2.75 $3.08 $3.39 $3.60 $3.82
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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The proposed water rate adjustments will help ensure adequate revenue to fund
operating expenses, capital expenditures, and meet reserve targets, without
charging any customer classes greater than their proportional share of the cost of
service.
Pass Through Rates
Should the cost of over entitlement water increase at any time during 2026-2030, the
water rate will be adjusted to reflect a direct pass-through of the increase, over and
above the amounts projected in the rate model.
Sewer Rates
Raftelis conducted a status quo cash flow analysis to evaluate whether existing sewer
rates can adequately fund the City’s collection-system expenses. The analysis
projected annual revenues, operation and maintenance expenses, debt service
payments, and capital expenditures. Raftelis projects that with no rate increases over
the study period, the City will fully deplete its sewer reserves in the year 2032. As
shown in Table 4, the Cost Study proposes a six percent (6%) annual revenue
adjustment over the five-year rate-setting period, to ensure the Sewer Operating
Fund has sufficient funds to cover annual expenses and to maintain reserve levels
throughout the study period.
Table 4: Proposed Sewer Revenue Adjustments
The current sewer rate structure consists of a per dwelling unit (“DU”), bi-monthly
cost for residential and non-residential customers. Additionally, a volumetric rate is
applied to all non-residential customers. The proposed sewer rates will also go from
bi-monthly to monthly and will now include a per account (per dwelling unit for
multifamily) charge for all customers. Table 5 shows the proposed five-year schedule
of sewer rates. Rates for calendar year 2026 reflect the cost-of-service analysis. Rates
for calendar year 2027 and beyond equal the prior year rates multiplied by the
proposed six percent (6%) revenue adjustment.
Effective Date Adjustment
Jan. 1, 2026 6.0%
Jan. 1, 2027 6.0%
Jan. 1, 2028 6.0%
Jan. 1, 2029 6.0%
Jan. 1, 2030 6.0%
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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Table 5: Proposed Five-Year Sewer Rate Schedule
Customer Class 2026 2027 2028 2029 2030
Residential Single-Family, $/m $9.05 $9.60 $10.18 $10.80 $11.45
Multifamily Dwelling Units, $/mo $9.05 $9.60 $10.18 $10.80 $11.45
Residential Sewer Only, $/mo $9.05 $9.60 $10.18 $10.80 $11.45
Non-Residential Commercial, $/mo $9.05 $9.60 $10.18 $10.80 $11.45
Government, $/mo $9.05 $9.60 $10.18 $10.80 $11.45
City Accounts, $/mo $9.05 $9.60 $10.18 $10.80 $11.45
Volumetric, $/hcf $0.67 $0.72 $0.77 $0.82 $0.87
Drought Rates
As part of the Cost Study, a demand reduction surcharge (“drought surcharge”) was
also identified to recover revenue shortfalls that occur during demand reduction
water shortages. The Drought Surcharge, as shown in Table 6, may be imposed
during times of declared drought, when certain levels of reduction from the base
usage have been mandated. A drought surcharge is assessed on each unit of water
used and is calculated to recover costs resulting from a loss of volumetric revenue,
due to reduced water use. The amount of the drought surcharge at different levels
of usage reduction is based upon the City’s projected revenue shortfall, adjusted for
changes in costs.
Table 6: Drought Surcharge
The City Council shall maintain discretion to implement drought rates.
Neighboring Comparisons
Even with the proposed rate adjustments, Arcadia's water and sewer rates are
among the lowest in the area. Table 7 shows a comparison of a water bill for a typical
single-family customer (12hcf/mo) on a 3/4” meter with the City’s proposed 2026
rates and the current rates for neighboring agencies.
Drought Stage 1 2 3 4 5
Drought Reduction in Use Up to 10% Up to 20% Up to 30% Up to 40% Up to 50%
% Incr. on Monthly Volumetric Rates 0% 4% 10% 11% 18%
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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$59.54 $62.90
$81.18 $88.33
$96.69 $100.96
$109.00 $111.40
$129.68
$145.75
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
Arcadia
(Proposed)
Azusa Alhambra Monrovia El Monte Monterey
Park
Covina Sierra
Madre
Pasadena Glendora
(Zone A)
Commmercial Water Bill Comparison
$53.88 $54.31
$69.27 $76.76 $76.94
$90.60 $94.07 $94.77
$111.56
$124.47
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
SFR Monthly Water Bill Comparison
Table 7: Neighboring Comparisons – Water, Single-Family, 3/4” Meter, 12hcf
Table 8 shows a comparison of a water bill for a typical commercial customer
(12hcf/mo) on a 1” meter with the City’s proposed calendar year 2026 rates and the
current rates for neighboring agencies.
Table 8: Neighboring Comparison – Water, Commercial, 1” Meter, 12hcf
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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Table 9 shows a comparison of a sewer bill for a typical single-family customer
(12hcf/mo) on a 3/4” meter with the City’s proposed calendar year 2026 rates and the
current rates for neighboring agencies.
Table 9: Neighborhood Comparison – Sewer Single-Family
Table 10 shows a comparison of a sewer bill for a typical commercial customer
(12hcf/mo) on a 1” meter with the City’s proposed calendar year 2026 rates and the
current rates for neighboring agencies.
Table 10: Neighborhood Comparison – Commercial
$9.05 $9.77
$14.96 $16.15 $17.16
$22.36 $22.46 $22.97
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
Arcadia
(Proposed)
El Monte Monrovia Pasadena Azusa Sierra
Madre
Monterey
Park
Alhambra
SFR Monthly Sewer Bill Comparison
$14.85 $17.09
$20.94 $24.43 $26.94 $27.14 $28.90
$65.23
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
El Monte Arcadia
(Proposed)
Azusa Pasadena Sierra
Madre
Alhambra Monrovia Monterey
Park
Commercial Monthly Wastewater Bill, 12 hcf
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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Water Service Discounts
To assist single-family residential low-income customers, seniors, and veterans, the
City will implement new Water Service Discounts. Customers can apply to participate
in one of the following discount programs:
Low-Income - For single-family residential customers with household income
at or below 50% of the Los Angeles County Area Median Income Level (AMI),
up to three units of water each month will be provided at no cost, and the
customer will receive a full exemption from the City’s Utility Users’ Tax.
Senior Low-Income – For customers ages 62 years or older and whose
household income is at or below 50% of the Los Angeles County Area Median
Income Level (“AMI”), a 10% discount will be applied to water consumption
usage and meter service charges, and the customer will receive a full
exemption from the City’s Utility Users’ Tax.
Senior - For customers ages 62 years or older, a 10% discount will be applied
to water consumption usage and meter service charges.
Veterans - For customers that served in a branch of the US Armed Forces, a
10% discount will be applied to water consumption usage and meter service
charges.
PUBLIC COMMENTS/NOTICE
Prop 218 Notice and Implementation of New Rates
In accordance with Proposition 218, the City must engage in a customer notification
process when increasing rates for the “property-related” services of water and sewer.
These requirements include mailing a written notice detailing the proposed rate
adjustments to all property owners and tenants who are responsible for paying the
utility bill and conducting a public hearing, no less than 45 days after the mailing of
the notices, to consider any written protests to the proposed rate adjustments.
On October 7, 2025, the City Council directed the PWSD to follow Prop 218
procedures to establish water and sewer rates and conduct a public hearing on
December 2, 2025. A written notice was drafted and reviewed by the City’s legal
counsel to ensure Prop 218 compliance. The notice was then mailed on October 10,
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
Page 11 of 13
2025, to all property owners and tenants who are responsible for paying the utility
bill.
All written protests against the rate increases are to be considered during the public
hearing and, following the closure of the public hearing, if a majority protest exists,
the proposed water and sewer rates cannot be established. However, if there is no
majority protest, it is recommended that the City Council adopt the proposed water
and sewer rate adjustment schedule for calendar years 2026 through 2030. The City
currently has 14,282 active accounts and a majority protest would be equivalent to
at least 7,142 written protests. In order to facilitate submittal of written protests, the
City has set up a drop-box outside of the City Manager/City Clerk’s Office for property
owners or customers of record to submit written protests. Protests placed in the
drop-box will be accepted until the close of the public hearing, at which point, the
City will close the drop-box and collect all valid protests to determine whether a
majority exists. In accordance with Prop 218, public comments at the public hearing
will not qualify as formal protests unless accompanied by a written protest.
Each year, as part of the budgeting process, water and sewer operating budgets will
be reviewed and analyzed. Should it be determined that revenue projections don’t
require the full percent rate increase, the PWSD will recommend a lesser rate
increase. In addition, water and sewer rate adjustments will be brought to the City
Council for adoption each year.
ENVIRONMENTAL ANALYSIS
The proposed action is exempt from the California Environmental Quality Act
(“CEQA”) pursuant to Public Resources Code Section 21080(b)(8) and CEQA
Guidelines Section 15273(a) because the rates are for the purpose of meeting
operating expenses; purchasing or leasing supplies, equipment, or materials;
meeting financial reserve needs and requirements; and obtaining funds for capital
improvements necessary to maintain service within the City’s existing service areas.
FISCAL IMPACT
The proposed water and sewer revenue adjustments were selected to make sure the
Water and Sewer Fund can sufficiently cover annual expenses, and to build reserves
to target levels by the end of the rate-setting period. Table 11, the Proposed Water
Financial Plan, shows the proposed five-year water enterprise financial plan. Status
Public Hearing to Adopt Water and Sewer Rates
December 2, 2025
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quo revenue is shown by the solid line. Projected revenue is shown by the dashed
line. Annual expenditures are shown by the columns.
The green bars above the X-axis show the net cash used to build up the reserves,
while the bars below the X-axis show the withdrawals from reserves to fund costs.
Revenue adjustments are required to generate sufficient funds to cover annual
operating and maintenance costs as well as capital projects. At the conclusion of the
five-year rate period, the Water Fund will have sufficient reserve funding to meet
recommended target levels.
Table 11: Proposed Water Financial Plan
Table 12 below, the Proposed Sewer Financial Plan, compares existing (solid line) and
proposed revenues (dashed line) with projected expenses (stacked columns). The
expenses include operations and maintenance, capital, debt service, and reserve
funding.
The green bars above the X-axis show the net cash used to build up the reserves,
while the bars below the X-axis show the withdrawals from reserves to fund costs.
Projected revenue from existing rates, if continued unchanged, would not meet
future projected total expenses and this table illustrates the need for revenue
adjustments to maintain operations, accomplish the desired capital plan, and to
meet reserve targets.
($10)
($5)
$0
$5
$10
$15
$20
$25
$30
$35
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Mi
l
l
i
o
n
s
Financial Plan
Water Supply Costs O&M Expenses Capital Projects
Debt Service Reserve Funding Current Revenues
Proposed Revenues
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December 2, 2025
Page 13 of 13
Table 12: Proposed Sewer Financial Plan
RECOMMENDATION
It is recommended that the City Council determine that this item is exempt under the
California Environmental Quality Act (“CEQA”); and that the City Council conduct a
public hearing, and if there is no majority protest, adopt the following:
1. Resolution No. 7663 setting City Water Rates and finding the rates will not
exceed the estimated amount necessary to fund the operation of the City
Water System for Calendar Years 2026 through 2030; and
2. Resolution No. 7664 setting City Sewer Rates and finding the rates will not
exceed the estimated amount necessary to fund the operation of the City
Sewer System for Calendar Years 2026 through 2030.
Attachments: Resolution No. 7663 (City Water Rates)
Resolution No. 7664 (City Sewer Rates)
1
RESOLUTION NO. 7663
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, SETTING CITY WATER RATES AND FINDING THE RATES WILL
NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE
OPERATION OF THE CITY WATER SYSTEM FOR CALENDAR YEARS 2026
THROUGH 2030
WHEREAS, pursuant to the Arcadia Municipal Code Section 7531.1, water rates
may be set and modified by resolution of the City Council; and
WHEREAS, it is the desire of the City Council to maintain flexibility so as to best
meet the needs of the City and water consumers; and
WHEREAS, proposed water rate changes for the period of Calendar Years 2026
through 2030, inclusive, were presented to the City Council at its October 7, 2025,
regularly scheduled City Council meeting; and
WHEREAS, the proposed water rate structure includes a fixed charge and a
volumetric rate, with the Volumetric Charge including four customer classes - (1)
Single Family Residential; (2) Multi-Family Residential; (3) Commercial; and (4)
Governmental, Institutional, and Irrigation (collectively “Institutional”); and
WHEREAS, the Monthly Service Charge is a fixed charge established on the
basis of the size of the water meter (in inches) serving a property and is calculated to
recover a percentage of the water utility’s annual fixed costs of providing water
service, such as utilities, equipment, materials, billing, collections, customer service,
meter reading, and meter maintenance; and
2
WHEREAS, the proposed water rates include revenue adjustments over the
five-year rate-setting period to make sure the Water Operating Fund has sufficient
funds to cover annual expenses and to build reserves to target levels by the end of
the rate-setting period, in the Year 2030; and
WHEREAS, the proposed water rates enable the City to increase water
revenues by 12% for Calendar Years 2026 and 2027; 10% for Calendar Year 2028; and
6% for Calendar Years 2029 and 2030, to fund expected operations, maintenance,
and CIP expenditures, and maintain a sufficient Reserve Fund balance; and
WHEREAS, a public notice concerning said rate changes was duly mailed to
residents in accordance with Proposition 218 noticing requirements on October 10,
2025, and a duly noticed public hearing concerning said rate adjustments was
conducted by the City Council on December 2, 2025; and
WHEREAS, the City duly gave notice of the period and means for submitting
written objections, and the City did not receive any written objections related to the
City’s compliance with the substantive limitations on fees and assessments imposed
by Section 4 or Section 6 of Article XIII D of the California Constitution; and
WHEREAS, the City Council finds that the proposed water and sewer rates do
not exceed the reasonable and proportional costs of providing services to the
ratepayers and the various categories of ratepayers; and
WHEREAS, the City Council has determined that, pursuant to Proposition 218,
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a majority protest does not exist and the City Council may therefore proceed to set
the water service rates.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA,
DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. RECITALS. The above-stated recitals and true and correct and
represent the findings of the City Council.
SECTION 2. RATES. The City Council hereby adopts the following rates for
water service:
(a) Monthly Meter Charge ($/Meter Size)
Meter
Size 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
5/8” $21.31 $23.87 $26.26 $27.84 $29.52
3/4” $21.31 $23.87 $26.26 $27.84 $29.52
1” $26.54 $29.73 $32.71 $34.68 $36.77
1 1/2” $39.61 $44.37 $48.81 $51.74 $54.85
2” $55.30 $61.94 $68.14 $72.23 $76.57
3” $91.91 $102.94 $113.24 $120.04 $127.25
4” $144.21 $161.52 $177.68 $188.35 $199.66
6” $274.96 $307.96 $338.76 $359.09 $380.64
8” $431.86 $483.69 $532.06 $563.99 $597.83
10” $641.06 $717.99 $789.79 $837.18 $887.42
(b) Single- Family Residential and Multi-Family Residential
Single-Family Residential and Multi-Family Residential rates consist of tiers which
4
impose higher rates per unit of water as the level of consumption increases, with
one unit equal to one hundred cubic feet of water.
Single-Family Residential Proposed Five-Year Water Volumetric Schedule
The amount of water allotted for Multi-Family Residential customers is based on
allotments per dwelling unit. The multifamily customer class will have two allotment
rates, as follows:
Multi-Family Residential Monthly Allotments (Per Dwelling Unit)
HCF x
Per Dwelling Unit
Allotment 1
6 hcf/du/mo
Allotment 2
>6 hcf/du/mo
Multi-Family Residential Monthly Water Rates
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
Allotment 1 $2.59 $2.91 $3.21 $3.41 $3.62
Allotment 2 $2.93 $3.29 $3.62 $3.84 $4.08
(c) Commercial and Institutional
2026 2027 2028 2029 2030
Tier 1: 0-8 $2.61 $2.93 $3.23 $3.43 $3.64
Tier 2: 9-26 $3.03 $3.40 $3.74 $3.97 $4.21
Tier 3: > 26 $3.53 $3.96 $4.36 $4.63 $4.91
5
Commercial and Institutional rates for the Volumetric Charge are uniform, but
the amount of the charge imposed varies based on the number of units of water
delivered to a property (institutional rates shall include Government and Irrigation
customers), with one unit equal to one hundred cubic feet of water.
Commercial Monthly Water Rates
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
$2.75 $3.08 $3.39 $3.60 $3.82
Governmental, Institutional, and Irrigation Water Rates
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
$3.18 $3.57 $3.93 $4.17 $4.43
SECTION 3. FIRE HYDRANT SERVICE FOR CONSTRUCTION, OUTSIDE
CITY, AND PRIVATE USE. Fire hydrant meters, eddy valves, and water sold for
construction, to outside City agencies, and for private use, shall be subject to the
following charges:
Meter Installation $159.29
Meter Relocation $79.65
Meter Reread $142.41
Meter Rental $91.91/month
Eddy Valve Rental $25.00/month
Hydrant Rental $32.45/month
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Hydrant Permit $46.06
Water Usage $3.18/100 cubic feet
Deposit (Refundable) $1,681.26
All water consumption is to be charged at the rate of three dollars and
eighteen cents ($3.18) per full one hundred (100) cubic feet registered on the
consumer’s meter.
Unmetered water use will be charged at a flat rate determined by the Water Section
of the Public Works Services Department based upon type of use.
SECTION 4. FIRE LINE SERVICE (NO CHARGE FOR WATER USED FOR FIRE
SERVICE). The current water rates also include a private fire service bi-monthly
charge for those customers with a dedicated fire service line. The table below shows
the proposed five-year water rate schedule for the private fire line charge through
the year 2030. The following rates are established for monthly charges for fire
protection service:
Monthly Private Fire Line Charge
Line Size 1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
5/8” $7.50 $8.40 $9.24 $9.80 $10.39
3/4” $7.50 $8.40 $9.24 $9.80 $10.39
1” $7.50 $8.40 $9.24 $9.80 $10.39
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1 1/2” $7.50 $8.40 $9.24 $9.80 $10.39
2” $7.50 $8.40 $9.24 $9.80 $10.39
3” $16.66 $18.66 $20.53 $21.77 $23.08
4” $32.45 $36.35 $39.99 $42.39 $44.94
6” $89.13 $99.83 $109.82 $116.41 $123.40
8” $186.89 $209.32 $230.26 $244.08 $258.73
10” $333.93 $374.01 $411.42 $436.11 $462.28
SECTION 5. DROUGHT SURCHARGE. The Drought Surcharge, as shown in the
table below, may be imposed during times of declared drought, when certain levels
of reduction from the base usage have been mandated. A drought surcharge is
charged on each unit of water used and is calculated to recover costs resulting from
a loss of volumetric revenue, due to reduced water use. The amount of the drought
surcharge at different levels of usage reduction is based upon the City’s projected
revenue shortfall, adjusted for changes in costs.
The City Council shall maintain discretion to implement drought rates.
SECTION 6. Should the cost of over entitlement water increase at any time
during 2026-2030, the water rate will be adjusted to reflect a direct pass-through of
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the increase over and above the increase projected in the rate model.
SECTION 7. All rates set forth in this Resolution shall be effective and
operative for water use and bills sent after January 1, 2026.
SECTION 8. Annually adjusted rates shall take effect for all water use and
service appearing on water bills issued on or after January 1, 2027, and each January
1 thereafter, including January 1, 2030. Prior to implementing the rates, however,
the City Council will review its projected costs for each year to determine the
maximum amount of any rate increases that are necessary.
SECTION 9. The City Council hereby finds that the rates specified in this
Resolution will not produce an amount in excess of that necessary to fund the
operation of the City of Arcadia Water System.
SECTION 10. The City Council hereby finds that the City duly provided a
written objection period from October 10, 2025, through November 24, 2025,
inclusive, pursuant to Assembly Bill 2257. The City did not receive any objections
concerning the City’s compliance with substantive limitations on fees and
assessments imposed by Section 4 or 6 of Article XIII D of the California Constitution.
SECTION 11. The City Council finds that this Resolution is exempt from the
requirements of the California Environmental Quality Act as specified in Public
Resources Code Section 21080(b)(8) and Title 14 Section 15273 of the California
9
Administrative Code.
SECTION 12. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this 2nd day of December 2025.
________________________
Mayor of the City of Arcadia
ATTEST:
_____________________
City Clerk
APPROVED AS TO FORM:
______________________
Michael J. Maurer
City Attorney
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RESOLUTION NO. 7664
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, SETTING CITY SEWER RATES AND FINDING THE RATES WILL
NOT EXCEED THE ESTIMATED AMOUNT NECESSARY TO FUND THE
OPERATION OF THE CITY SEWER SYSTEM FOR CALENDAR YEARS 2026
THROUGH 2030
WHEREAS, pursuant to the Arcadia Municipal Code Section 2696, sewer rates
may be set and modified by resolution of the City Council; and
WHEREAS, it is the desire of the City Council to set sewer rates in a reasonable
amount and so as to meet the capital improvement and service needs of the City
and its sewer service consumers; and
WHEREAS, proposed sewer rate changes for the period of Calendar Years
2026 through 2030, inclusive were presented to the City Council at its October 7,
2025, regularly scheduled City Council meeting; and
WHEREAS, a public notice concerning said rate changes was duly mailed to
residents in accordance with Proposition 218 noticing requirements on October 10,
2025, and a duly noticed public hearing concerning said rate adjustments was
conducted by the City Council on December 2, 2025, for Calendar Years 2026, 2027,
2028, 2029, and 2030.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA,
DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
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SECTION 1. RECITALS. The above stated recitals are true and correct and
represent the findings of the City Council.
SECTION 2. RATES. The following sewer rates are established and shall
supersede rates heretofore adopted for the following categories of sewer service:
(a) Single Family Residential, Multi-Family Residential Dwellings, and
Residential Sewer Only Charges per Month
(b) Commercial, Government, and City Accounts Charges per Month
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
$9.05 $9.60 $10.18 $10.80 $11.45
(c) Non-Residential Volumetric Charges per HCF (Hundred Cubic Feet) of
water
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
$0.67 $0.72 $0.77 $0.82 $0.87
(d) Premises where sewer connections are not available or are not connected
shall be exempt from said monthly charges.
SECTION 3. All rates set forth in this Resolution shall be effective and
operative for sewer use and bills sent after January 1, 2026.
SECTION 4. Annually adjusted rates shall take effect for all sewer use and
1/1/2026 1/1/2027 1/1/2028 1/1/2029 1/1/2030
$9.05 $9.60 $10.18 $10.80 $11.45
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service appearing on bills issued on or after January 1, 2027, and each January 1
thereafter, including January 1, 2030. Prior to implementing the rates, however, the
City Council will review its projected costs for each year to determine the maximum
amount of any rate increases that are necessary.
SECTION 5. The City Council hereby finds that the rates specified in this
Resolution will not produce an amount in excess of that necessary to fund the
operation of the City of Arcadia Sewer System.
SECTION 6. The City Council hereby finds that the City duly provided a written
objection period from October 10, 2025, through November 24, 2025, inclusive,
pursuant to Assembly Bill 2257. The City did not receive any objections concerning
the City’s compliance with substantive limitations on fees and assessments imposed
by Section 4 or 6 of Article XIII of the California Constitution.
SECTION 7. The City Council finds that this Resolution is exempt from the
requirements of the California Environmental Quality Act as specified in Public
Resources Code Section 21080(b)(8) Title 14 Section 15273 of the California
Administrative Code.
SECTION 8. The City Clerk shall certify to the adoption of this Resolution.
[SIGNATURES ON THE NEXT PAGE]
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Passed, approved and adopted this 2nd day of December 2025.
________________________
Mayor of the City of Arcadia
ATTEST:
_____________________
City Clerk
APPROVED AS TO FORM:
______________________
Michael J. Mauer
City Attorney