Item 23 - Protests - Sewer & Water Rates

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Legal Objection--Proposed Water and Sewer Rate Changes a. Water: 9.0% (May 2026), 9.0% (July 2027), 9.0% (July 2028), 9.0% (July 2029), and 8.0% (July 2030). The compound cumulative increase over the five-year period is approximately 53%, not a simple sum of 44%. b. Sewer: 13.5%(May 2026), 13.5%(July 2027), 10.0% (July 2028), 10.0% (July 2029), and 10.0% (July 2030). The compound cumulative increase over the five-year period is approximately 71%. The purpose of Proposition 218's notice requirement is to provide affected property owners with sufficient information to evaluate the proposed rate changes and determine whether to file a protest. Presenting only the first-year dollar impact of a five-year compounding rate schedule, without stating the total cumulative increase in either dollar or percentage terms, undermines the informed participation that Article XIII D is designed to protect. Additionally, the pass-through adjustment policy described in the Rate Study permits additional annual increases of up to 15% on top of the scheduled adjustments, further compounding the actual rate impact beyond what the notice communicates. IV. THE TRANSITION TO MONTHLY BILLING OBSCURES YEAR- OVER.-YEAR COMPARISON The simultaneous transition from bi-monthly to monthly billing introduces a structural break in ratepayers' ability to compare their bills over time.A ratepayer who has historically tracked bi- monthly charges will find it difficult to evaluate whether their post-adjustment monthly bill reflects only the stated rate increase or also reflects changes in tier allocation,fixed-charge restructuring, or other rate-design modifications embedded in the new structure. While monthly billing may offer operational benefits, implementing it simultaneously with a major rate restructuring and class consolidation has the practical effect of making it substantially more difficult for ratepayers to detect disproportionate cost allocation which is the very outcome. Proposition 218 exists to prevent. V. SPECIFIC RELIEF REQUESTED In light of the foregoing, I respectfully request that the City Council: a. Decline to adopt the proposed rates as currently structured until the City can demonstrate, by substantial evidence, that the single-customer-class structure produces rates proportional to the cost of service attributable to each parcel, as required by Article XI1I D, Section 6(b)(3); b. Direct RDN or another qualified consultant to prepare and make publicly available a supplemental analysis that quantifies the cost-of-service by customer class under both the prior differentiated structure and the proposed consolidated structure, including verified data on peaking factors, return-flow ratios, and infrastructure demand by customer type specific to Santa Ana's system; Page 4