Sewer Rates

On Tuesday, July 6, 2021, the City Council will conduct a public hearing to consider increases to the City’s sewer service rates. The City Council held a study session on March 16 and April 20, 2021, to review the Study and proposed rates. On May 4, 2021, the City Council adopted Resolution No. R-2021-20 and directed Staff to initiate the Proposition 218 proceedings and set the public hearing date to consider the proposed rates. The City mailed out notices to all affected property owners on May 21, 2021. 

Background

The City operates and maintains 84 miles of gravity sanitary sewer pipelines that serve the majority of parcels within the 6.6 square mile City limits. Operations, maintenance, and repair activities include sewer line cleaning, root removal, manhole maintenance and repair, sewer line video inspection, and sewer lateral maintenance, repair, and replacement. The City’s wastewater collection system conveys untreated wastewater to Orange County Sanitation District’s (OCSD) trunk sewer system via 35 separate connections. OCSD conveys, treats, and disposes of the City’s wastewater flows via OCSD treatment plants. The City is responsible for maintaining the gravity sanitary sewer pipelines within its limits. 

Current Sewer Rates

On April 26, 2002, the Santa Ana Regional Water Quality Control Board ("RWQCB") issued Board Order ("Order") No. R8-2002-0014, which prohibited the discharge of untreated sewage to any surface water storm or drainage system. This Order included numerous provisions, including the requirement for every agency to prepare a Sewer System Management Plan (SSMP) to address all requirements of the Order by September 30, 2005. On March 15, 2005, the City Council adopted a sanitary sewer fee via Ordinance No. 2005-04 and established the Sewer Enterprise Fund to meet the increased costs and comply with the Santa Ana regulations RWQCB. These rates are based on a study prepared by Ray Miller Consulting Engineers in 2005. No additional rate increases were planned or have been implemented since 2005.  The existing sewer fee structure is based on the use of the sewer system as it correlates to the consumption of water by the different users of the sewer system. The user class fee per 100 cubic feet of water (ccf) is as follows:

Note: 1 CCF  = 748 gallons of water

Sewer Enterprise Fund: What does the City's Sewer Fee pay for? 

The City utilizes the revenues from the fees for the operation and maintenance of the City's sewer system in compliance with State and Federal regulations.  All revenue and expenditures related to the sewer services provided by the City are contained in the Sewer Enterprise Fund, which is separate from the City's General Fund and other funding sources. 

The City's Sewer Fee is separate from the charge that property owners see on their property tax bill. This charge is from the Orange County Sanitation District and is for treating the sewage collected by the City's sewer system.  None of that revenue goes to the City. 

2018 Sewer Master Plan  

In 2018, the City completed a Sanitary Sewer Master Plan (Master Plan) under a contract with Dudek Corporation. The Master Plan evaluated the capacity and condition of the City’s sanitary sewer system and outlined recommendations and improvements to provide adequate hydraulic capacity and improve the reliability of the collection system. The Master Plan identified a Sewer Capital Improvement Program (Sewer CIP) consisting of seven (7) capacity-related CIP projects, three (3) pipeline condition-related rehabilitation projects, and one (1) manhole rehabilitation project with an estimated cost of $15,972,000. A copy of this Master Plan can be accessed at the link below:

• 2018 Sanitary Sewer Master Plan

Current Condition of City's Sewer System

The City’s sewer system is aging and the majority of it is constructed of vitrified clay pipe (VCP) material. VCP is a fairly brittle pipe that is more prone to deterioration and leads to joint separation and cracks in the pipe. With the proposed rates, the City seeks to continue the safe operation of the City’s sewer system and will 1) fully fund operations and maintenance costs and 2) support necessary capital improvement projects to upgrade the City’s aging sewer system and meet the future system capacity needs of the City.  

Multiple Fractures	Broken Pipe
Joint Offset	Grease Deposits

2020 Sewer Cost Recovery Study

The operation and maintenance of the City’s sewer system are funded through the Sewer Enterprise Fund which is separate from the City’s General Fund. The City has not adjusted the sanitary sewer fee rates since March 2005 when the existing rates were first established. The cost to operate and maintain the City’s sewer system has increased over the past 16 years. Since March 2005, the cumulative annual price change has increased by a factor of 37.2% and revenues have not kept pace with the capital needs of the system. The current rates are insufficient to fund ongoing services.  Without a sanitary sewer service adjustment, the City’s Sewer Enterprise Fund will not have adequate revenues to cover operations and maintenance of the sewer system and conduct necessary capital improvements and repairs.

During the last two (2) fiscal year reviews of the City’s Comprehensive Annual Financial Report, the City’s Financial Audit Oversight Committee has noted that the Fund has a structural deficit. The Committee also noted that actions should be taken by the City to ensure there are sufficient funds to properly administer the City’s sewer system. In 2019, the City contracted with SCI to conduct a cost recovery study of the City’s Sewer Maintenance Enterprise Fund.  The study is a comprehensive analysis of the City’s costs of operating and maintaining its sewer system and providing sewer service. The rate study addresses several key factors, such as the financial plan and revenue requirements, funding of capital projects to fix the City’s aging sewer system, meeting recommended reserve targets for operations and capital replacement, and accounting for the cost of inflation. 

• 2020 Sewer Cost Recovery Study

Proposed Increases to Sewer Rates

The study recommends the implementation of an updated sewer service fee structure that includes two (2) separate fees: maintenance fee and capital fee. The maintenance fee will fund the operating and maintenance costs of the sewer system. The capital fee will fund sewer replacement, rehabilitation, and capacity enhancement improvements through a series of capital projects that are necessary to replace and upgrade the sewer system. The capital rate was developed utilizing the City's Sewer Master Plan. In addition, the study recommends the adoption of a five-year rate schedule to address the cost of inflation on items needed to inspect, repair, operate, maintain, and perform capital improvements. 

Currently, the City charges a per hundred cubic feet (ccf) volumetric fee for all customers. This fee is based on a customer’s water usage and it is included in your monthly water bill from Golden State Water Company or Yorba Linda Water District. The proposed rates will continue to be a volumetric fee for all customers based on how much water is used. The following tables provide a summary and breakdown of the proposed sewer fee rates for Fiscal Year (FY) 2021-22 and the Five-Year Sewer Rate Schedule. The proposed rates after FY 2021-22 would increase annually by 3% through FY 2025-26. 

Table 1: Proposed Rates for FY 2021-22

Note: 1 CCF  = 748 gallons of water

Table 2: Proposed Five-Year City Sewer Rate Schedule 

How will the proposed rates impact residents and businesses?  

The City estimates that for a typical single-family residential customer using 16 ccf of water per month, their monthly sewer fee will increase by $5.81. For a typical multi-family residential customer using 152 ccf of water per month, their monthly sewer fee will increase by 65.29. Below is a table that summarizes the monthly bill impact for the various customers based on average water consumption. 

Public Hearing on July 6, 2021

In November 1996, California voters approved Proposition 218. As a result, California agencies such as the City of Placentia must comply with its requirements when setting or adjusting utility rates. Proposition 218 requires the City to provide written notice by mail to the owner of each parcel upon which the sewer rate will be imposed. The Proposition 218 notice contains the following:

1. The proposed amount of the sewer rate charges;
2. The basis upon which the sewer rate charges were calculated;
3. An explanation of the need for the new or increased sewer rate charges; and
4. The date, time, and location of the public hearing at which the City Council will consider the increased sewer rate charges.

On May 4, 2021, the City Council authorized City Staff to send out the Proposition 218 notice to Placentia property owners to inform them of the proposed sewer rates. Proposition 218 requires a 45-day comment period before the City Council may act on the proposed rates and finalize the tabulation of any protests received. The City Council set the public hearing for the proposed sewer rates for Tuesday, July 6, 2021. If adopted, the new sewer rates will go into effect on August 6, 2021. To view the Proposition 218 notice, click here.

City Council Documents & Presentations

City Council Study Session: March 16, 2021 

• City Council Staff Report
• PowerPoint Presentation

City Council Study Session: April 20, 2021 

• City Council Staff Report
• PowerPoint Presentation
• Overview of the 2020 Sewer Cost Recovery Study 

City Council Meeting: May 4, 2021

• City Council Staff Report: Setting of Public Hearing
• Resolution No. R 2021-18: Setting of Public Hearing 

Additional Resources:

• 2018 Sanitary Sewer Master Plan
• 2020 Sewer System Management Plan Volume I
• 2020 Sewer System Management Plan Volume II

Contact Information

If you have any questions about the proposed rate changes or would like more information, please contact Elsa Robinson, Management Analyst at (714) 993-8189 from 7:30 a.m. to 6:00 p.m., Monday through Thursday.