Rate Planning
Rate Planning
SCV Water is Considering Rate Changes
SCV Water has a simple and straightforward mission: To provide responsible water stewardship that ensures the SCV Water service area has reliable supplies of high-quality water at a reasonable cost.
As part of that mission, the Agency regularly evaluates the cost of providing service, to confirm that expenses are balanced with revenue so that we can adequately address system operations, maintenance and updates, meet government regulations and maintain financial stability.
SCV Water is considering a five-year schedule of changes to water rates and charges that could affect your monthly bill. The Agency is proposing changes to: Water Usage Charges, Fixed Charges, Legacy Debt Charges and Private Fire Charges.
If approved, the proposed adjustments would be implemented on July 1 of 2025, 2026, 2027, 2028, and 2029.
Customers who may be impacted by these changes are invited to provide feedback that the Board of Directors will consider prior to voting on the proposal. All members of the public are invited to attend the public hearing.
Additionally, under California state law, all property owners and customers of record may submit a written protest to the proposed rate changes. Only one protest per parcel is permitted.
Please refer to the “How Can I Participate?” section of this website for instructions on submitting a formal written protest against the proposed action. All written protests will be verified. You may also appear at the public hearing at the date and time specified in this notice. Per Government Code Section 53759, any legal challenge to the proposed rate adjustments must be filed within 120 days of the date that the resolution adopting the proposed rate adjustments is adopted.
Prop 218 Notice
Below, you will find a copy of the Prop 218 Notice mailed to all property owners and customers of record. The Notice is also available in Spanish. Click the image(s) below to open the Notice.
Proposed Rates
- Proposed Variable Charges
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PROPOSED WATER USE CHARGES
NOTE: Water use Charge is per unit of water used (ccf). 1 ccf = 748 gallons
Class
($ per ccf)Effective 7/1/2025
Effective 7/1/2026 Effective 7/1/2027 Effective 7/1/2028 Effective 7/1/2029 Potable $2.77 $3.03 $3.29 $3.58 $3.89 Recycled* $2.21 $2.41 $2.62 $2.84 $3.08
*Recycled Water Use Charge. Recycled water is billed based on the amount of recycled water used and only charged to customers that have a recycled water meter.
- Proposed Fixed Charges
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PROPOSED FIXED CHARGES
(For potable and recycled)
Meter Size Effective 7/1/2025 Effective 7/1/2026 Effective 7/1/2027 Effective 7/1/2028 Effective 7/1/2029 5/8-in $17.10 $18.83 $20.65 $22.64 $24.82 3/4-in $23.60 $25.99 $28.50 $31.25 $34.26 1-in $36.60 $40.31 $44.19 $48.46 $53.13 1 1/2-in $69.09 $76.10 $83.44 $91.48 $100.30 2-in $108.08 $119.05 $130.53 $143.11 $156.91 2 1/2-in $127.58 $140.52 $154.07 $168.93 $185.22 3-in $199.07 $219.26 $240.41 $263.59 $289.00 4-in $329.04 $362.43 $397.37 $435.69 $477.70 6-in $653.99 $720.34 $789.79 $865.95 $949.45 8-in $1,043.92 $1,149.83 $1,260.70 $1,382.26 $1,515.54 10-in $1,498.84 $1,650.90 $1,810.09 $1,984.62 $2,175.99 12-in $2,798.61 $3,082.54 $3,379.77 $3,705.66 $4,062.97 - Proposed Legacy Debt Charges
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The legacy debt charge is billed separately as a monthly fixed charge to cover debt incurred by the Santa Clarita and Valencia Divisions prior to the formation of SCV Water, as outlined in Senate Bill 634. This ensures that infrastructure costs incurred for the benefit of each pre-merger service area are paid by those respective areas.
Meter Size Santa Clarita
Water Division
Effective 7/1/2025*Valencia
Water Division
Effective 7/1/2025*5/8-in $5.26 $4.88 3/4-in $7.89 $7.32 1-in $13.14 $12.20 1 1/2-in $26.29 $24.40 2-in $42.06 $39.03 2 1/2-in $49.95 $46.35 3-in $78.87 $73.19 4-in $131.44 $121.98 6-in $262.88 $243.97 8-in $420.61 $390.34 10-in $604.63 $561.12 12-in $1,130.40 $1,049.05 *The Legacy Debt Charge will remain unchanged through the rate period (July 1, 2025 – June 30, 2030).
- Proposed Private Fire Service Charges
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Private Fire Service Charges are imposed on properties that have a separate private fire line. These costs are recovered through a monthly service charge, charged only to private fire service customers based on the size of the fire service.
Meter Size Effective 7/1/25 Effective 7/1/26 Effective 7/1/27 Effective 7/1/28 Effective 7/1/29 3/4-in $4.27 $4.70 $5.16 $5.65 $6.20 1-in $4.27 $4.70 $5.16 $5.65 $6.20 1 1/2-in $4.59 $5.05 $5.54 $6.07 $6.66 2-in $5.13 $5.65 $6.19 $6.79 $7.45 2 1/2-in $7.08 $7.80 $8.55 $9.38 $10.28 3-in $10.45 $11.51 $12.62 $13.84 $15.18 4-in $22.55 $24.84 $27.23 $29.86 $32.74 6-in $43.41 $47.82 $52.43 $47.48 $63.03 8-in $74.79 $82.38 $90.33 $99.04 $108.59 10-in $118.29 $130.29 $142.85 $156.63 $171.73 12-in $163.96 $180.60 $198.01 $217.10 $238.04 14-in $227.91 $251.03 $275.23 $301.77 $330.87 16-in $317.43 $349.63 $383.34 $420.31 $460.83 18-in $442.76 $478.68 $534.70 $586.26 $642.78 20-in $618.22 $680.94 $746.94 $818.58 $897.52 - Pass-Through Provision
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As part of the rate-setting process, SCV Water projects the revenue needed in future years based on assumptions and projections on cost increases including, among other things, inflation and construction. SCV Water conservatively projects such cost increases based on historical data and trends. The proposed annual increases for the water rates and charges are based on the following expense escalation factors:
Expense Escalation Factors FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 FY 2029/30 Overall Inflation Rate 3.80% 3.80% 3.10% 3.10% 2.69% Construction Inflation Rate 6.10% 6.10% 6.10% 6.10% 6.10% Expense Escalation Factors
It is possible that, due to factors outside of SCV Water’s control, overall inflation or construction inflation may increase in amounts that exceed those set forth in the table above. Pursuant to Government Code section 53756, SCV Water is proposing to pass-through such unforeseen inflationary increases directly to customers in future years as follows:
- Should the annual change in the Consumer Price Index (“CPI”), Los Angeles-Long Beach-Anaheim, measured from February to February exceed the “Overall Inflation Rate” listed in the table above for the applicable year, SCV Water proposes to pass through to its customers the difference by adjusting the Overall Inflation Rate upwards to match CPI; and
- Should the annual change in the Engineering News Record Construction Cost Index (“CCI”) measured from February to February, exceed the “Construction Inflation Rate” listed in the table above for the applicable year, SCV Water proposes to pass through to its customers the difference by adjusting the Construction Inflation Rate to match CCI; and
Collectively, the proposed adjustments described above are referred to as the “Pass-Throughs.” SCV Water may implement the Pass-Throughs at any time commencing July 1, 2025, through and including June 30, 2030, provided that should SCV Water determine it is necessary to implement a Pass-Through, SCV Water will mail notice of such adjustment to each impacted property owner and customer of record at least 30 days prior to implementation. The Pass-Throughs may be applied to the Fixed Charges, the Water Use Charges, or the Private Fire Service Charges as applicable, provided that the impacted proposed water rates and charges shall not increase by more than 10% in any fiscal year as a result of implementation of the Pass-Throughs, and in no event shall the Pass-Throughs cause the proposed rates to exceed the cost of providing water service.
How to Participate
Community Meetings
Please attend one of our scheduled public meetings to learn about SCV Water's rate setting process and the proposed water rate changes. Questions, concerns and comments will be addressed.
Community groups (including HOAs) can request a separate meeting for members by calling 661-297-1600.
Wednesday, February 5, 2025
Wednesday, March 5, 2025
6:00 p.m. - 7:00 p.m.
Virtually Only
Questions & Answers
Have a question about the proposed rate change? Use our online form to submit your questions. Responses will be provided by the Ratepayer Advocate.
NOTE: Official protests must be submitted in writing. Please read "The Protest Process" to see the requirements to submit an official protest.
Public Hearing
Tuesday, April 1, 2025 at 6:00 p.m.
at the SCV Water Regular Board Meeting
SCV Water
E. G. "Jerry" Gladbach Water Treatment Plant
27234 Bouquet Canyon Road
Santa Clarita, CA 91350
The Public Hearing Process
At the time of the public hearing, the Board of Directors will hear and consider all written protests and public comments. After the public hearing, if property owners or customers of record representing a majority of the impacted parcels submit written protests in opposition to the proposed rates, they will not be adopted.
If a majority written protest is not received, the Board may, but is not obligated to, adopt the proposed changes. If adopted, the new rates would take effect on July 1 of 2025, 2026, 2027, 2028 and 2029.
The Protest Process
Any customers or property owners may appear at the hearing to make comments regarding the proposed change. To file an opposition protest, property owners of real property who are directly liable to pay water bills may submit a written protest.
Written protests may be mailed to SCV Water, Attention: Board Secretary, 27234 Bouquet Canyon Road, Santa Clarita, CA 91350. Protests must include: your name, parcel number and/or service address, validation code (a unique ID # located on the front of this mailer with your mailing address) and your signature.
Protests submitted by email or other electronic means do not count as formal written protests. All written protests must be received prior to the conclusion of the public hearing on Tuesday, April 1, 2025.
Exhaustion of Administrative Remedies
Notice is hereby given that any person that wishes to challenge the proposed water rates and charges must first file a written legal objection as described below no later than April 1, 2025. Legal objections will only be considered valid if they meet the following procedural and substantive requirements:
- Legal objections must be in writing.
- SCV Water must receive your legal objections no later than the close of the public hearing on April 1, 2025.
- Legal objections must be mailed, or hand delivered to 27234 Bouquet Canyon Road, Santa Clarita, CA 91350, or alternatively, may be emailed to lutfi.kharuf@bbklaw.com
- Legal objections must include the following information:
- Your name, parcel number and/or service address.
- A statement that your communication constitutes a legal objection.
- A description of the nature of the legal objection, with sufficient specificity to allow SCV Water to respond in writing. A statement that the proposed water rates and charges violate Proposition 218, without an explanation as to the basis of your claim, will be insufficient to constitute a legal objection.
Failure to submit a legal objection, or to meet the requirements set forth above, will bar any right to challenge the proposed water rates and charges through a legal proceeding.
Understanding the Proposed Water Rate Structure
- Water Rate Structure Overview
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The proposed rate structure includes a monthly fixed charge (service charge), imposed upon all customers based on the size of the meter serving the property, and a water use charge determined by the amount of water delivered to each parcel, measured in one-hundred cubic-feet (CCF).
- Fixed Charges provide revenue stability for the Agency, helping recover essential costs like infrastructure improvements, water transmission, and distribution without over-relying on variable charges that fluctuate with consumption. While these types of costs are fixed, they can still vary with water usage. Fixed charges ensure that truly fixed costs are covered, while usage-driven costs are covered by the variable charge.
- The Water Use Charge (also known as a Variable Charge) covers expenses such as purchased water, treatment, pumping and other costs attributable directly to the amount of water used.
In recent years, SCV Water has shouldered these costs by using its reserve funds rather than implementing a rate change ahead of the outlined schedule. Combined with inflation, these costs are driving the need for rate changes.
- We are Efficient
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The Agency is actively pursuing cost-saving opportunities, such as installing solar panels to offset purchased power costs and seeking cell tower leases. In addition, several initiatives have been implemented, including having in-house staff manage tasks like PFAS testing, pipeline replacements, the Affordability and Cost of Service Study, and safety training. Further savings have been achieved through in-house improvements, including reduced fleet repair costs and consolidated procurement contracts.
You can see below how we stack up against other comparable water agencies. These rates reflect the average homeowner’s total water service fees when this notice was prepared. SCV Water’s number is based on our FY 2025/26 proposed rate.
- SCV Water - $62.42
- Glendale Water and Power - $74.08
- Torrance Municipal Water - $78.16
- Palmdale Water District - $87.04
- Las Virgenes Municipal Water District - $106.20
- Los Angeles Department of Water & Power - $149.42
(NOTE: This rate estimate is based on a 3/4-inch meter using 14 ccfs per month. It also excludes SCV Water’s Legacy Debt charge.)
- The Finance Connection: Bringing it All Together
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Did you know? As a public agency, SCV Water cannot earn a profit from the services it provides and must charge no more than the actual costs associated with providing services to its customers.
SCV Water Receives revenues (funding) from:
These revenue sources are used to meet SCV Water’s total revenue requirements. Revenue requirements are the total amount of revenues (funds) SCV Water must generate to cover all operating and financial obligations necessary for SCV Water to provide reliable water services to our community.
Ratepayer Advocate
The SCV Water Board of Directors selected consultant, Robert D. Neihaus, Inc. (RDN) as the Agency's Ratepayer Advocate. The Advocate is independent of SCV Water staff, and their purpose is:
- To advocate on behalf of SCV Water's Customers within service area boundaries
- To advise the SCV Water Board of Directors and provide information to the public before the adoption of the new wholesale and retail water service rates and charges
Frequently Asked Questions (FAQ)
This FAQ represents the Ratepayer Advocate’s earnest attempt to address ratepayer concerns in a simple, non-technical, language. Additional questions regarding the proposed rates should be directed to the Ratepayer Advocate by clicking on this link to: Ask a Question.
- Who decides what to charge?
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The proposed rates are based on detailed Cost of Service principles. The costs associated with different functions are allocated to customers based on their service requirements. Additionally, fixed and variable costs are allocated to fixed and variable rates based on industry standards for revenue recovery. Not all fixed costs can be recovered from fixed charges since this will create a huge financial burden on small users. Each customer’s water rates are based on a mathematical formula that finds the optimal rate (lowest- financial impact on customers) while the amount of revenue necessary to keep SCV Water working.
- Do I have any say in the ratemaking process?
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SCV Water contracted a third-party, objective, Ratepayer Advocate to represent the concerns of customers. Additionally, customers can make their opinion known at any Board meeting, workshop, or hearing. Before new rate schedule is passed, customers have a chance to protest any increases using the Proposition 218 process, which is mandated under California Law. Customers with any concerns should reach out to the Ratepayer Advocate and share their concerns throughout the process.
- What happens if proposed revenue adjustments are not implemented?
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If the proposed rates are not adopted, it is very likely that SCV Water will see revenue deficits in the coming years. At first, this will mean spending reserves to pay for daily operations, but as time goes on, necessary maintenance will be postponed, which will lead to a reduction in service and could possibly lead to catastrophic failures of the water system. All of the expenses which need to be recovered through rates are necessary expenses needed to maintain the water system to provide safe services for their customers. The Ratepayer Advocate reviewed all their expenses and ensured that no unreasonable expenses are included in the rate calculation.
- What do my rates pay for?
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Your rates pay for the day to day operation of the water system which includes: pumping, treatment, testing, and billing, as well as needed replacement and repairs of system infrastructure. Additionally, water rates pay for customer service costs, public outreach, and conservation programs.
- Will my rates go up?
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Operating cost increases along with projected customer conservation have or will cause a revenue shortfall for SCV Water in the long term. In order to continue serving their customers at the same level, SCV Water must increase rates to bridge the difference between income and expense. Customer rates reflect the actual cost of service, so if costs increase, so will rates.
- How did you decide what needs to be repaired or replaced?
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SCV Water has detailed master plans and CIP plans which were developed by engineering experts with an extensive knowledge of the water and recycled infrastructure. The system components have service lifespan estimates that have been developed through years of trial and error and engineering experience. SCV Water uses these lifespan estimates to predict which parts of the system will need to be replaced at what time, or if the infrastructure is better off being repaired.
- Why are you taking out loans, isn't that more expensive?
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Financing capital projects allows the costs to be spread between current customers and future customers. Without loans, current customers would have to pay for all CIP up front with cash which would lead to significant rate increases. Additionally, in order to build up enough cash to pay for larger projects, replacements would likely need to be deferred far longer than is advisable.
- Why do I have to pay for infrastructure that only new customers benefit from?
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Infrastructure that benefits new customers is actually paid for by Facility Capacity Charges (FCFs) and Regional Capacity Charges; one time fees that developers pay when they build a new community. FCFs are calculated to collect enough revenue to pay for all new system development, so that current customers don’t share the burden. The capital budget included in the rates is only for projects that benefit current customers.
- If I use less water, will I pay less?
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Yes. A portion of every water bill is based on metered water use. If you use less water, this portion of your bill will decrease. Because of the limited supply and tendency for drought, it is in the best interest of everyone to use less water. This is one case where doing the right thing will put more money in your pocket.
- How did you decide what should be fixed vs. variable charge?
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Fixed costs are costs that don’t change based on the amount of water customer uses, whereas variable costs fluctuate based on water use. Examples of fixed charges include administrative costs, billing costs, wages, supply costs, and maintenance. Examples of variable costs include pumping power, PFAS treatment, chemicals, and purchased water. A perfect rate structure would have all fixed costs, which represent 77 percent of all costs, recovered by fixed charges; however, this design would reduce conservation signals in the rates and would have a huge impact on customers that use small amount of water. It is therefore necessary to have a balance between fixed and variable charges which reward a customer for saving water and recovers enough revenue to fund operations.
- How often will my rates increase?
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If the current rate study is adopted, it allows for one rate adjustment per year for the next five years. If rate increases end up not being needed (more revenue than expected was collected or expenses don’t increase as quickly as projected), the Board of Directors can decide not to increase rates or introduce lower rate increases during a particular year. Customers can also lower the overall impact of rate increases during this period by reducing water use.
- Who approves the rates?
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The Board of Directors must vote on the proposed rates and rates can only be adopted after a public hearing. If more than 50 percent of all customers protest the rates, then no rate changes can be adopted.
- What were the considerations used in the rate design?
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When setting rates, four most important elements of rate setting practices should be considered; Revenue Sufficiency: Rates should recover the annual cost of service and provide revenue stability. Rate Impact: While rates are calculated to generate sufficient revenue to cover operating and capital costs, they should be designed to minimize the impacts on customers. Equitability: Rates should be fairly allocated among all customers based on their estimated demand characteristics. Practicality: Rates should be simple in form and, therefore, adaptable to changing conditions, easy to administer, and easy to understand.
- What does SCV Water do to keep water rates as low as possible?
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SCV Water has significantly cut expenses through economies of scale. Individual expenses are now spread among more customers due to the merger. Additionally, there were three redundant administrative structures before the merger, now there is just one. In order to maintain service at the current, optimal level, SCV Water must continue to diligently monitor its water supply. Testing and treatment make up a considerable expense as does the pumping.
Why the proposed rates?
Like other water utilities, SCV Water is facing increased costs to comply with increasingly stringent federal, state, and local mandates related to water quality, conservation, and the sustainability of groundwater and imported water supplies. At the same time, SCV Water must balance the availability of revenue with the economic and environmental risks associated with aging facilities in need of replacement, while also adapting our water supplies to the anticipated impacts of climate change and other factors.
Additional factors the Agency must consider include development and weather, as they relate to customer conservation and water use, and inflation.
To learn more about the reasons for the rate change, please click on a topic below:
- We must continue to invest in our Capital Program.
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Delaying the investment into critical infrastructure introduces significant risks that may lead to higher costs and challenges in the long run. The initial savings by deferring maintenance will be eclipsed by much larger replacement costs down the road.
Click here to visit our Capital Improvement Projects page. - We must continue to prepare for emergencies.
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Ensuring we have the necessary resources in place gives us the ability to respond to unforeseen circumstances while keeping the Agency financially sustainable.
- We must comply with various mandates.
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New water regulations have emerged, reflecting a growing emphasis on sustainability, public health, and resource management which require increased operational costs.
- Per- and polyfluoroalkyl (PFAS)Substance Regulations. Increased regulation of per- and polyfluoroalkyl substances (PFAS) has been prominent. California, along with other states, set limits on PFAS in drinking water that require continual treatment, testing and reporting. Click here to visit our PFAS page.
- Conservation Long-Term Framework. In early 2024, the State Water Resources Control Board adopted the “Making Conservation a California a Way of Life” regulation (AB 1668 and SB 606). Under the new state mandate, urban retail water suppliers, including SCV Water, will need to meet an individualized water efficiency goal for our service area, and implement performance measures and new reporting requirements. Click here to visit our Conservation Requirements page.
- Weather, customer conservation and water use.
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Due to extreme changes in the weather in recent years, ranging from extreme drought to extreme precipitation, as well as significant efforts to educate our customers on water use efficiency best practices, water usage (for a ¾-inch meter) has decreased by 29%, resulting in lower than anticipated revenues.
- Inflation.
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On a broader scale, economic factors, such as inflation and shifts in consumer behavior have slowed growth in the SCV Water service area. The demand for development has declined because of higher labor, material, and service costs due to these conditions. Additionally, the water treatment process has gotten more expensive due to the increased costs of required water treatment chemicals.
Rate Case Process and Timeline
Date | Meeting Type | COS Project Phase | Agenda # and Packet Item |
---|---|---|---|
7/15/2024 | F&A Committee | Phase 1 - Project initiation and Data Collection | Item #6 - Presentation |
8/19/2024 | F&A Committee | Phase 2 - Revenue Requirements | Item #6 - Presentation |
9/19/2024 | F&A Committee | Phase 3 - Cost of Service Study | Item #5 - Presentation |
10/1/2024 | Regular Board of Directors | Phase 1-3 Cost of Service Review | Item #7 - Presentation |
10/21/2024 | F&A Committee | Phase 4 - Rate Design Analysis | Item #4 - Report and Presentation |
11/19/2024 | Regular Board of Directors | Phase 4 - Approve Cost of Service and Rate Design (Scenario 3) |
Item #7.3 - Report (Includes a copy of the presentation) |
12/9/2024 | F&A Committee | Phase 5 - Review Prop 218 Notice | Item #4 - Report (Includes a copy of the presentation) |
12/17/2024 | Regular Board of Directors | Phase 5 - Approve Prop 218 Notice | Item #7.2 - Report (Includes a copy of the presentation) |
2/5/2025 | Community Workshop | Understanding SCV Water's Proposed Water Rate Change (FY 25/26 - FY 29/30) |
Via Zoom - Presentation Only |
3/5/2025 | Community Workshop | Understanding SCV Water's Proposed Water Rate Change (FY 25/26 - FY 29/30) |
Via Zoom - Presentation Only |
3/17/2025 | F&A Committee | Phase 6 - Communication | Item #TBD - Presentation |
4/1/2025 | Regular Board of Directors | Phase 7 - Public Hearing and Rate Adoption | Item #TBD - Report and Presentation SCV Water Resolution #TBD |