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Public Works Agency <br />www.santa-ana.org/pw <br />Item # 23 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br />Staff Report <br />March 17, 2026 <br />TOPIC: Public Hearing to Consider Proposed Water and Sewer Rate Adjustments in <br />Accordance with Proposition 218 <br />AGENDA TITLE <br />Public Hearing to Consider Proposed Water and Sewer Rate Adjustments in <br />Accordance with Proposition 218 (Non -General Fund) <br />Legal notice published in the OC Reporter on March 6, 2026. Mailed notices sent on <br />January 23, 2026 <br />RECOMMENDED ACTION <br />Conduct a public hearing in accordance with the requirements of Proposition 218 and <br />adopt a resolution to adjust City water and sewer rates effective May 1, 2026; July 1, <br />2027; July 1, 2028; July 1, 2029; and July 1, 2030. <br />RESOLUTION NO. 2026-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF <br />THE CITY OF SANTA ANA ADJUSTING RATES FOR WATER AND SEWER <br />SERVICES PROVIDED BY THE CITY OF SANTA ANA <br />GOVERNMENT CODE §84308 APPLIES: No <br />EXECUTIVE SUMMARY <br />The proposed water and sewer rate adjustments are necessary for three primary <br />reasons: to ensure compliance with evolving legal requirements under Proposition 218, <br />to fund critical repairs and upgrades to the City's aging water and sewer infrastructure, <br />and to maintain the long-term financial stability of the City's utility enterprises. Without <br />adjustments, existing revenues will not keep pace with increasing operating costs, <br />regulatory requirements, and infrastructure investment needs required to maintain safe <br />and reliable service for the Santa Ana community. Furthermore, the inability to maintain <br />an infrastructure investment fund compromises our bond rating with Standard & Poor's <br />(S&P). <br />With the proposed rate adjustments, Santa Ana customers still will continue to pay <br />lower water and sewer rates on average compared to several neighboring Orange <br />