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Phone: 530-757-5686
Email: pwweb@cityofdavis.org
Address: Public Works Corporation Yard; 1717 Fifth Street, Davis, CA 95616
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Wastewater Rate Studies

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Wastewater Rate Studies

Sewer, Sanitary Sewer or Wastewater?

On the City’s utility bill, wastewater charges are labeled as “sanitary sewer.” Municipalities will often interchangeably call the service "sewer," "sanitary sewer" or a newer term, "wastewater." Changes in the wastewater industry in recent years have expanded the services provided by wastewater utilities, to include recycled water and other services, making the "sewer" terminology somewhat outdated. The City of Davis uses "wastewater" to refer to the programs and services of this utility.

In 2020, the City of Davis contracted with the consulting firm Bartle Wells Associates to prepare a comprehensive wastewater (also called sanitary sewer) rate study, to evaluate the utility's financial plan and ensure adequate revenue to support the utility's operations, capital programs and debt service. The wastewater utility is supported by an enterprise fund, meaning revenues are derived primarily from service charges.

The study determined that revenue from current wastewater charges will not be sufficient to meet future expenses. After a number of meetings with the City's Utilities Commission, staff proposed revisions to the City's wastewater rates and structure that were presented to City Council on August 29, 2023. The proposed wastewater rates were calculated to:

Fund current and projected increases in the costs of operations and maintenance of sanitary wastewater infrastructure
Fund utility repair, replacement and capital improvement costs
Distribute costs equitably between customer classes while minimizing the impact on ratepayers
Further refine the treatment costs to include the cost of treating ammonia

In addition, the following were also proposed rate changes:

Adjusting fixed to volumetric ratio of charges for residential customer classes
Larger “dormitory-style housing” specific rates
Consolidation of customer classes for multi-family and commercial customers respectively

More information on these proposed adjustments can be found in the City Council staff report (linked here) from August 29, 2023, and the Wastewater Rate Study (linked here).

City Council approved the mailing of Proposition 218 notices for the proposed rate adjustments at their August 29, 2023 meeting. On December 1, 2023, the Proposition 218 Notice of Public Hearing was mailed to all wastewater utility customers. A Public Hearing was held at the City Council meeting on January 16, 2024. The City Clerk did not receive the required number of protests against the rate increases, so City Council voted to implement the wastewater rate changes. The rate changes first appeared on the June 2024 customer utility bills.

December 2023 Proposition 218 Notice to Residential Property Owners of Proposed Wastewater Rate Increases and Public Hearing Proceedings (PDF)

December 2023 Proposition 218 Notice to Commercial Property Owners of Proposed Wastewater Rate Increases and Public Hearing Proceedings (PDF)

Rate Structures

Wastewater rates include a fixed base rate for all users, a flat per-unit charge for residential customers and volumetric charges based on estimated wastewater demand and strength for each customer class in hundred cubic foot (CCF) units. Demand is calculated based on average monthly winter water use (in CCF) from November – February of the prior year. These components appear as one charge on the City Services Bill (see sample below).

Adopted Rate Structures

Adopted WW Rates - Commercial

Adopted WW Rates - Residential

2020 Wastewater Cost of Service/Rate Study Background Documents

In December 2020, the Utilities Commission began a Wastewater Utility cost of service/rate study. Discussion items, agendas, meeting packets, presentations and meeting video links are included for each meeting below:

December 16, 2020

Wastewater Cost of Service Study – Short Utility Introduction.

Recommendation: Informational Item. Receive a short informational overview of the City’s Wastewater Division of the Public Works Utilities & Operations Department in anticipation of the first presentation of the Wastewater Utility financial plan. Topics will include: the components of wastewater and the collection system; an overview of system operations and maintenance; the wastewater treatment plant; wastewater quality information; and source control. Bartle Wells Associates will provide information on rate structures; a Capital Improvement Project overview; and an overview of additional costs as developed in preparation for the presentation of the financial plan next year.

Also included in the meeting:

Meeting Video: https://youtu.be/yemTWXBkTrE

January 20, 2021

Wastewater Cost of Service Study – Financial Plan Review.

Recommendation: Informational Item. Introduction to the development of the financial plan for the Wastewater Utility for current and future projections on revenue and costs of service for use in the rate setting phase of the cost of service study. Receive presentation from Bartle Wells Associates on financial plan development and key areas for discussion.

Also included in the meeting:

Meeting Video: https://youtu.be/WmzKJMjjUD4

April 21, 2021

Wastewater Cost of Service Study – Financial Plan Review.

Recommendation: Informational Item. Continued discussion on the development of the financial plan for the Wastewater Utility for current and future projections on revenue and costs of service for use in the rate setting phase of the cost of service study. Receive presentation from Bartle Wells Associates on financial plan development and key areas for discussion.

Meeting Video: https://youtu.be/4ogHM6BXDPI

May 19, 2021

Wastewater Cost of Service Study – Rate Setting and Scenarios. (This is a presentation only)

Recommendation: Informational Item – Introduction for the Commission on the discussion of the wastewater rate setting and rate scenario phase of the Wastewater Utility cost of service study. Receive presentation from Bartle Wells Associates on rate setting and key areas for discussion.

Also included in the meeting:

Wastewater CIP Descriptions

Meeting Video: https://youtu.be/asHqt5isBTU

June 16, 2021

Wastewater Cost of Service Study – Rate Setting and Scenarios.

Recommendation: Informational/Action Item – Continued from the meeting on May 19, discussion of the wastewater rate setting and rate scenario phase of the Wastewater Utility cost of service study, with informational report on the City’s Wastewater Utility with responses to questions from Commissioners. Receive presentation from Bartle Wells Associates on rate setting and key areas for discussion. The Commission could consider recommendations on wastewater utility rates for City Council.

Also included in the meeting:

Consultant Presentation (BWA)

Meeting Video: https://youtu.be/HxxNfYfWM98

October 20, 2021

Wastewater Cost of Service Study – Rate Setting and Scenarios. (This is a presentation only)

Recommendation: Informational/Action Item – Continued from the meeting on June 16, 2021 - discussion of the wastewater rate setting and rate scenario phase of the Wastewater Utility cost of service study. Receive presentation from Bartle Wells Associates on rate setting and key areas for discussion. The Commission could consider recommendations on wastewater utility rates for City Council.

Also included in the meeting:

Consultant Presentation (BWA)

Meeting Video: https://youtu.be/c1mPg67Lbyw

December 15, 2021

Wastewater Cost of Service Study – Rate Setting and Scenarios.

Recommendation: Informational/Action Item – Continued from the meeting on October 20, 2021 - discussion of the wastewater rate setting and rate scenario phase of the Wastewater Utility cost of service study. Receive presentation from Bartle Wells Associates on rate setting and key areas for discussion, and answers to questions from October’s meeting. The Commission could consider recommendations on wastewater utility rates for City Council.

Also included in the meeting:

Consultant Presentation (BWA)

Meeting Video: https://youtu.be/FfLBXqjsYwM

August 29, 2023

Wastewater Utility Cost of Service and Rate Study; Initiate City Wastewater Utility Fee Proposition 218 Process

Recommendation: Informational/Action Item – Receive Wastewater Fee Report and presentation from City staff and Bartle Wells Associates on the Cost of Service Study and development of rate structure recommendations. Direct staff to initiate the Proposition 218 process and take necessary steps including the preparation of Notices for City and County Service Area customers to be mailed noticing a public hearing to be held on or after November 7, 2023 to consider implementation of rate adjustments by January 1, 2024.

Also included in the meeting:

• 06 Wastewater Rate Study Initiate Prop 218 Presentation

Meeting video

January 16, 2024

City Council Meeting: Wastewater Rate Protest Hearing

Recommendation: Informational/Action Item – Conduct the Public Hearing and conduct final count of written protests, including any written protests submitted prior to the close of the public hearing, and determine if there is a majority protest. If no majority protest exists, introduce the Ordinance amending Chapter § 33.04.050 of the Municipal Code and find the ordinance amendment exempt from environmental review pursuant to CEQA Section 15378. Approve the Resolution (Attachment 2) establishing the rates published in the Proposition 218 Notice of Public Hearing with the first increase to be effective beginning February 1, 2024.

Also included in the meeting:

• Wastewater Rate Protest Hearing Presentation

Meeting video

Previous Rate Adjustments

2017 Wastewater Customer Class Allocation Adjustment

In June 2015, the city of Davis contracted with the consultant firm NBS to prepare a comprehensive sanitary sewer rate study that included a model to evaluate the utility’s financial plan (revenue requirements) and provided recommendations for rates that would (while maintaining the revenue required to fund the City’s wastewater utility) adjust the cost allocation by user class (i.e. single family residential, commercial, etc.) The proposed adjustment by user class is to ensure each class is paying a proportionate share of system costs, based on updates to the method of treating wastewater over the last four years.

The cost allocation adjustment adopted by Council has a net effect of increasing average costs for some user classes and decreasing average costs for other user classes. The calculation methodology behind these rates is included in the report from NBS that is linked below.

The City of Davis held a Public Hearing on June 20, 2017, at 6:30 p.m., in the City of Davis Community Chambers, 23 Russell Blvd. in Davis, to consider adopting the proposed sewer rates, resulting from changes to the cost allocation for its sanitary sewer service, in compliance with Proposition 218 requirements.