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Ms. Barbara Orozco <br /> March 10, 2026 <br /> Page 2 <br /> fixed meter costs (costs associated with reading and maintaining meters); fixed <br /> infrastructure costs associated with capacity and delivery, and fixed infrastructure <br /> costs associated with delivering water through public hydrants. These include things <br /> like facilities repairs and replacements, meter capacity, and customer service. The <br /> variable rates, on the other hand, include water supply costs, and costs of managing <br /> water resources and distributing water. No variable costs are recovered through the <br /> fixed charges. <br /> 3. The pass-through adjustment mechanism is not self-executing. Rather, the City is <br /> carving out the authority to pass through rate increases adopted by wholesale water <br /> providers. The amount of the pass-through, if any, is limited by the actual rate <br /> increase, and will never exceed cost of service. <br /> 4. The pass-through authority will not exceed 5 years from adoption, as will be set forth <br /> in the resolution adopting the rates. <br /> 5. The City strives to establish rates that are affordable. However, while the City does <br /> consider all cost-saving mechanisms, it must also ensure that each utility is self- <br /> sufficient. Importantly, the City only recovers what it needs to provide the property- <br /> related service, and further, the City actually subsidizes water utility by nearly $1.5 <br /> Million from unrestricted revenues, which reduces rates by approximately$0.15 in Tier <br /> 1. This is not required under Proposition 218, but was implemented in order to provide <br /> savings to City water customers. <br /> 6. The Proposition 218 notice meets all legal requirements. Should you have any <br /> questions, please contact the City at (714) 647-3320. <br /> Sincerely, <br /> Rodolfo osas, P.E. <br /> Acting Executive Director of Public Works <br /> SANTA ANA CITY COUNCIL <br /> Valerie Amezcua David Penaloza Thai Viet Phan Benjamin Vazquez Jessie Lopez Phil Bacerra Johnathan Ryan Hernandez <br /> Mayor Mayor Pro Tem-Ward 6 Ward t Ward 2 Ward 3 Ward 4 Ward 5 <br /> vamezcua!ov7santa-ana.oro doenaloza af�san[a-ana.aM tphan(&.santa-ana.ora bvaz a uezei)Santa-ana.om iesslelooez(dsanta-ana.oro pbacerrano santa-ana om jryanhemandez(n)santa-ana.oi <br />