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January 12, 2026 <br />Armando Fernandez <br />Acting Deputy Public Works Director <br />City of Santa Ana <br />20 Civic Center Plaza <br />Santa Ana, CA 92701 <br />Subject: 2026 Water and Sewer Rate Study <br />Dear Mr. Fernandez, <br />Robert D. Niehaus, Inc. is pleased to provide this Financial Planning, Revenue Requirements, Cost of <br />Service, and Rate Setting Analysis report to the City of Santa Ana for its Water and Sewer services. <br />This rate study includes a financial plan to determine the revenue requirements for the next five years <br />and a comprehensive review of the City's current rates based on the cost of service principles. This <br />report outlines the approach, methodology, findings, and recommendations of the study. Each of the <br />components of this study has enhanced the equitability of the rates we propose. <br />The proposed rates were developed utilizing the City's customer usage data, billing records, <br />accounting, operating and management records, capital plans, and reserve policies. Based on the City - <br />provided data, key assumptions were made for the study using appropriate resources and our <br />econometric and financial expertise. We are confident that the rates proposed in this report are cost - <br />based and are fully compliant with Proposition 218 and other legal requirements. <br />It has been an absolute pleasure and honor to work with your city. We thank you and all additional staff <br />who helped complete this report. <br />Respectfully submitted, <br />Robert D. Niehaus, Ph.D. <br />Anthony Elowsky M.A. <br />Managing Director/Principal Economist - RDN Project Manager - RDN <br />