For Water Subcommittee Meeting July 24, 2025
TO: Water Subcommittee Members
FROM: John Rossi, Interim Utilities Director
AUTHOR: Toyasha Sebbag, Assistant to the City Manager
Title
Staff request that the Water Subcommittee provide feedback on the proposed Water and Wastewater/Sewer Rate Study Schedule.
(ACTION)
Body
RECOMMENDATION
Staff recommends that the Water Subcommittee provide feedback on the proposed Water and Wastewater/Sewer Rate Study Schedule.
BACKGROUND
On July 23, 2024, the City Council/Rialto Utility Authority (RUA) Board adopted a one-year rate adjustment, effective January 1, 2025, for water and wastewater/sewer services. The one-year rate was based on a five-year financial projection. Staff was directed to return in 2025 with an updated rate analysis for Council/RUA Board reevaluation.
ANALYSIS/DISCUSSION
On April 7, 2025, staff released RFP No. 25-039 for Financial Consulting Services for a Water and Wastewater/Sewer Rate Analysis. Three proposals were received: Bartele, Raftelis, and Water Resources Economics.
An evaluation committee consisting of John Rossi, Interim Utilities Director; Toyasha Sebbag, Assistant to the City Manager; and Rod LeMond, CPA, RUA Financial Consultant, reviewed the proposals and ranked Water Resources Economics (WRE) as the most qualified firm to conduct the analysis.
A tentative schedule for implementation of a new rate structure, effective January 1, 2026, is as follows:
1. Kick-off Meeting with staff and RWS/Veolia - July 2, 2025
2. Presentation to Water Subcommittee - August 28, 2025
3. Presentation to Utility Commission - September 16, 2025
4. City Council Presentation (includes Technical Memorandum) - September 23, 2025
5. Proposition 218 Mailing - September 26, 2025
6. Public Hearing - November 18, 2025
7. Rates Effective - January 1, 2026
To meet the above schedule, WRE recommends a two-phase approach: Phase I - Update Financial Plan Only; Phase II - Cost of Service & Rate Design.
Phase I will develop an updated financial plan to ensure revenue sufficiency and Concession Agreement coverage requirements. The resulting rate adjustments would be applied to the existing rate structure and implemented by January 1, 2026.
Phase II, to follow within approximately one year, would address cost-of-service refinements and rate design updates.
Staff is requesting feedback from the Water Subcommittee on this two-phase approach for the Water and Wastewater/Sewer Rate Analysis.
ENVIRONMENTAL IMPACT
The proposed action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
Approval of the proposed action also complies with the following City of Rialto Guiding Principles, General Plan Goals and Policies: Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed the staff report.
FINANCIAL IMPACT
Operating Budget Impact
Funds are available in the Concession Agreement Contract Services Account.
Capital Improvement Budget Impact
There is no impact on the Capital Improvement Budget.
ATTACHMENT(S)
Water Resources Economics (WRE) Memo Re. Options for Future Water and Wastewater Rate Adoption