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SUPPLEMENTAL MATERIAL 9 first two years and 8% for the last two years, uniformed water rate structure and proposed water rate increase, the City estimated increase cost of $150K annually for city’s consumptions and expenditures. The actual increase may be less when combined with reduction of water frequency proposed through the park maintenance budget reduction strategy and State water conservation requirement. Once the Prop 218 process is completed and the Council has approved the final rates, the budget will be updated to reflect the final revenue and cost. 16. CIP Budget, page 77 (Sewer Lift Station): Wording such as criticality and potential safety hazard was used for this project and other projects. Why is funding not allocated until later years if the projects are so critical? A. Staff acknowledges that several components of the City's sewer infrastructure are in critical condition. However, delivery for these projects has been deferred due to limited resources and competing priorities in other CIP deliveries (Major projects in 2024: Water Near Term Project, Alternative Water Supply, Costco Project, Hopyard Repaving Project, Water System Management Plan, Water Rate Study, etc.). At present, the City is still finalizing a fully developed Sewer System Management Plan (SSMP) supported by a comprehensive Capital Improvement Program (CIP), which is essential for identifying and prioritizing long-term infrastructure needs. In response to these challenges, the City has implemented enhanced operational practices and increased the frequency of maintenance activities to mitigate risks and ensure continued service reliability. In 2024, an independent audit was conducted to evaluate the deficiencies of the 2023 SSMP and provide recommendations for improvement. Staff anticipates presenting a revised and updated SSMP to the City Council by June 2025, followed by a detailed CIP and Operations and Maintenance Plan in Fall 2025. These foundational planning documents will inform a comprehensive sewer rate study, with recommendations for revised rates expected to be brought forward in Spring 2026. The updated rate structure will be designed to support the implementation of the revised SSMP, including the allocation of adequate resources to address critical infrastructure needs in a timely and fiscally responsible manner. 17. The Water and Sewer (Non-General Fund) budget proposes to add several new positions to support operations, deliver the capital projects identified in the Water Management Plan, and meet compliance requirements. Please describe in more detail the needs and how these positions will support the programs or impact service levels. Please also explain if certain activities/positions can be contracted out and the estimated costs.