Item 08 - Water and Sewer Rate Adjustments

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Water and Sewer Rate Adjustment Authorization January 20, 2026 Page 4 The following are key elements and recommendations of the Study. Caaital Improvement Plan Staff has determined that both the water and sewer utilities need significant investment in the repair and rehabilitation of its aging infrastructure. PWA has completed both a water and sewer infrastructure master plan which identifies critical projects that should be constructed over the next 15 years. The water and sewer systems are already showing signs of distress. In the past year alone, the systems experienced 23 water main breaks, 200 water service leaks, and 128 sewer lateral repairs. In addition, four (4) pump stations and 16 groundwater wells were downed due to mechanical and/or electrical failures. While PWA made cost-effective repairs, continued deferral of capital project investment will eventually result in system failure and loss of critical assets. The proposed rate plan allows for the City to invest an average of $8 million annually on water capital improvements and $5 million annually on needed sewer capital improvements over the next five (5) years. Proposed projects include (Exhibit 2): • Water Facilities o Garthe Pump Station Improvements o Walnut Pump Station Improvements o New Groundwater Wells o Crooke Pump Station Improvements Water Main Improvements o Fisher Park Neighborhood Water Main Improvements o Heninger Park Neighborhood Water Main Improvements o Thornton Park Neighborhood Water Main Improvements o Riverview West Neighborhood Water Main Improvements o Madison Park Water Main Improvements Sewer Main Improvements o Washington Square Sewer Main Improvements o Santa Ana Memorial Park Neighborhood Sewer Main Improvements o Wright Street and Old Grand Sewer Main Improvements o Warner-Garnsey Street Sewer Main Improvements o Casa Bonita Neighborhood Sewer Main Improvements o Riverview West Neighborhood Sewer Main Improvements Operations & Maintenance Plan The water enterprise's FY 2025/26 budget includes $73.5 million in operating expenses, of which $26.6 million is for the purchase of water supplies and $3.2 million is for the cost of electrical power to pump, treat, and distribute the water. Costs for wholesale water as well as electrical power are expected to continue climbing year over year.