2026 regular city council meeting to order. Will the city clerk please call the roll
councilmember dayhoff here. Council member pikus here. Deputy mayor mayeda here. Mayor
vohs here. Deputy mayor. Mayor, please lead us in the pledge.
and now, if you'd please join us for a moment of silence.
thank you. First up is public comment. In accordance with state law, an item not
scheduled on the agenda may be brought forward by the general public for comment. However,
the city council will not be able to discuss or take action on any issue not included on
the agenda. You may speak up to three minutes. You have one opportunity. I have two
speakers. First up, jim bonner. Good evening. First of all, I'd like to just give a shout out
to the poway high school girls cheer and dance team. I don't know how many of you know of
them or have watched them, but they're going to be heading for a national championship in
vegas next month. They do a very good job. If anybody's familiar with pop warner
football and cheer, they've had national championships over the years. So I'd like to bring a
little bit of attention to them. And I know, you know, in this world of city council issues
and traffic and this development and that development and this development and that council person and newspapers are full of publicizing, you know,
things like carols for candlelight and other events. Maybe some of you out there may
want to write a check to poway high, give it to doctor perniola at the poway high
school and help fund them. It's going to be an expensive trip, and any of these events for
such activities for the women's teams and these type of programs should be supported. I
know many of you have sons and daughters that have been cheered on by these girls over
the years and do a lot of hard work, and it's very tough and they do a great job, and it
would be nice once in a while if more people would participate and cheer them on
and give them the money. If you've got a business, if you've got money that you'd
like to support, give it to doctor pegula. Write a check. It's going to go to the school
only to help fund them. They didn't ask me to come up here and do that, but I'm familiar
with this program. I've been watching those programs for years. I've helped them out, raise money, and I'd just like to see something other than the usual promotion and events in
here and just, you know, give applause to them because they could be a national champion.
thank you. Tony rubino. Good evening. I just would like to stop by and say thanks from,
from on behalf of a lot of special needs parents, I want to thank the city and the staff
for doing a heck of a job on snow day a couple of weeks ago. It was windy as could be. I
spent the day holding our pop up tent from blowing off somewhere, but I think we
probably passed out about 225 wristbands for security purposes. It includes the
families and the parents and the children. But we every year we get compliments from people
around that come from carlsbad, oceanside, del mar, and they say, we sure wish our city had
something like this. So thanks again. Carrie sanchez did a super job with all of her staff.
thanks so much. Thanks, tony. That concludes public comment. Next on our agenda is the
consent calendar. Do we have any speakers on consent? No speakers on consent. I'm happy
to move approval of the consent calendar second. Second, from councilmember pikus, this is a
roll call vote. Will the city clerk please call the roll? Council member. Dull? Aye.
council member pikus. I deputy mayor maida I and mayor voss I. Item passes. Thank you. Moving
on to public hearings, next on the agenda is the public hearing for recycled water and
wastewater rates. Written protest must be received prior to the close of tonight's
public hearing. If you have a protest letter, please hand it in to the city clerk at this
time. This is the public hearing for the proposed five year water, recycled water and
wastewater rates. I will now open the public hearing. Director of finance greg
schmollinger will present the item along with the powerpoint. Take it away, craig. Thank you,
mayor and council members. So tonight as mentioned, we're going to go over and do a brief
review of the noted rate information for the five year water, recycled water in
wastewater rates. We did give a pretty lengthy, possibly two lengthy presentation on
november 18th where we went over all the details, including for the cost of service study
process involved in the rate making process that are included in this five year rate
study. The agenda report from that meeting is also attached to this staff report. So if
anyone's interested in getting that additional information, they're free to go in and look
at the attached materials. All right. So looking at the agenda which I'll go through briefly,
we'll kind of kick off with a brief review of the indirect cost allocation plan, which has
been completed and posted online. Pass through provisions. As this is the first time the
city is considering including those pass through provisions in this five year rate
structure. Go through the water and wastewater rate drivers and the proposed revenue
adjustments to each of those enterprises, and then look at the timeline and associated recommendations included there. So the indirect cost allocation plan, just high level review.
this was included in the finance work plan for fiscal year 2425. That was a very
in-depth process involving every city department working collaboratively to update this
plan. What that does is it benefits ratepayers significantly in the form of
splitting out costs for central service functions. Amongst all of those functions. And tonight
that's applicable to water and sewer and recycled water services. So instead of having
a water district, for example, paying for all of a finance department and it staff, city
council and so on, they're paying for proportional share. So they benefit in that way. So
this was called out in the current fiscal year 2526 budget to utilize the results of the
update for the cost allocation plan. In this cost of service study. The results of that
include a de minimis impact to the water enterprise, meaning not much of a change from our
current practice, and it did result in a reduction in cost in the sewer enterprise, which
you'll see reflected in the rate recommendations here shortly. And one last note we
did publish the completed cost allocation plan update on the finance department website or
web page. Excuse me, along with an accompanying memo, just kind of giving a high level overview
of how to go through that 100 plus page document. So pass through provisions have been
allowed under the the california government code since 2009. What that allows is
for the automatic pass through of wholesale costs outside of an agency's control, with 30
days written notice to customers as shown. That's the best practice utilized by the
vast majority of water providers here in san diego county, but not currently poway.
however, we are including that in this recommended five year rate structure going through
your calendar year 2030. What that would include is wholesale water purchase costs that are
outside of poway's control from the san diego county water authority, wholesale recycled
water purchase costs that are outside of poway's control from the city of san diego, and
wholesale wastewater treatment and disposal costs that are outside of poway's control from
san diego metro joint powers authority. And there is a revision to the the volumetric
water rate structure that we're recommending. And that's tied to some recent court rulings,
including here in san diego county, which have successfully challenged the legal viability
of our current and what many agencies utilize, which is a tiered volumetric water rate.
again, so what the city is recommending is shifting gears from that uniform water rate
structure into a more equitable and legally defensible uniform volumetric rate across the
board. But we also affirm that our current tiered structure follows all of the provisions
of the state. Proposition 218 cost of service principles as well. All right. So looking at
what's driving the water rate adjustments. So the the two biggest drivers here are the
wholesale water costs that I mentioned slider two ago from the san diego county water
authority. That along with pumping costs. So energy costs make up a little over 60% of
the water operating costs. So it's a sizable chunk of the cost of doing business for the
water enterprise. Also included are the city capital improvement program projects,
which include the water infrastructure improvement program, which is the largest
suite of capital improvement program projects in the city's history, as well as other
capital improvement program projects to make sure we have safe and reliable delivery of
water to customers, on demand, ongoing operations and maintenance costs certainly
factor into rate adjustments as well. And then also meeting our legally required debt covenants
and payments on an annual basis. So to fund all of these costs, there is a proposal. We do have
a proposal for a five year rate adjustments, which are being proposed as shown here at the
bottom of this slide, which include a 9.9% adjustment in year one, and then flattening
out to a 4% annual adjustment for years two through five. So the shown adjustments are the
result of the cost of service study process. We went over at the november 18th, 2025 city
council meeting where we discuss working with industry experts raffaello's financial
consultants for the better part of the last year in consolidating that process. So
sudhir wallace here in the front as well, who we work closely with from raftilose. So
if there's any technical questions or any questions for the firm on their process, he
certainly here to answer any questions on that. I do want to note that these year one
adjustments include a 4.1% increase attributable to city of poway known cost, and the
remainder of that 9.9%. So 5.8% is attributable to the increase in imported water costs from
the san diego county water authority and as shown in the asterisks here, years two
through five do not include pass through adjustments from wholesale service providers,
including san diego county water authority. So switching gears, looking at wastewater,
the largest driver for wastewater services are treatment and disposal costs,
which are a contract through san diego metro joint powers authority. And of course, as
cost increase through them, those are passed through to retail providers such as poway.
the result of the cost of service study process in year one for poway is a 0%
adjustment for year one, 2026 and year 0% in 2027. So year two and then 3% adjustments for
years three through five. So I wanted to highlight briefly again that while there is a 0%
adjustment for year one because of those cost of service study provisions in, when you realign
the cost of providing service with the rates, it actually results in a net decrease to
residential customers of about 2%, with a corresponding increase to commercial
customers by a like amount. All right. In reflected here on this, this slide is the
combined household impact under different usage volumes in each of those columns there. So the
the current rate structure of tiered rates was industry standard, which helped meet state mandates for conservation efforts. As mentioned, there was court rulings that went
away with the conservation approach and is steering agencies towards a uniform rate
structure, which is exactly what poway is doing. Shown here is in the second column. So
kind of one over from the left, second one over is the average poway customer, which uses 29
units of water over a bi monthly billing period, which results in an increased cost
impact of 9.6% under the recommended rates. So that's the combined water and sewer
bill under those under those usage volumes in each one of those columns. So we took a
look at what one of our neighboring agencies. So city of san diego is pretty close to
us, wanted to look and see what their costs would be under that same scenario, that 29 units.
and I was actually pretty surprised by this. Their total bill would be $512.83. So just
about a dollar more than the proposed rates for city of poway. What that doesn't
include is proposed adjustments in outyears for city of san diego as well. So that analysis
will probably change in the next year or two. All right. So looking at the timeline, we're
looking at a couple of dates here, including setting the public hearing which is
happening tonight, which happen at the november 18th, 2025 city council meeting. The mailing of
the proposition 218 notices to all customers in poway, which includes 15,946 properties, and
that took place on november 21st. To make sure we hit that state, required 45 day noticing
period prior to tonight's public hearing. If a majority protest does not exist at the
conclusion of this public hearing, the proposed rates may be adopted by council. If
adopted, they would go into effect beginning tomorrow for year one and then each january
over the following four years. I do want to note that the rates that are included in the
notice are not to exceed rates. So what that means is, if there's positive financial
conditions for the city that result in some cost savings or some higher revenue than we
anticipate, then the city 4% component for water services in year two through five, or 3%
for wastewater for years three through five, we can implement something less than that. And
that's not a hypothetical that actually happened for ramona water district a few years ago
and city of carlsbad more recently than that. So we're certainly doing everything we
can as a city to kind of drive down costs, look for other revenue sources, and hopefully
realize those not to exceed values less than what we have noticed here tonight. All right.
and then staff recommends opening the public hearing, which already took place,
hearing any public comment and accepting all written protest provided during the public hearing and adding them to the the protest we've received to date. There's also a new
category of objections, which should be considered if there were any and there have not
been any. Upon conclusion of the public hearing, staff recommends adopting adopting
the resolutions if a majority protest does not exist and a majority protest would exist.
if 50% plus one of those customers did file a valid written protest, which would be
7973 active accounts. So this concludes today's presentation. We're happy to answer any
questions at this time. Thank you. Thank you craig I have two speakers jim bunner. How many
public comments was that? 7900. A written protest, 50% plus one would be 7973. Do we know how
many have been turned in? I think we're going to get to that in just a minute. Okay,
good. I'm here to talk about fairness, and I wish there were a bigger crowd. But I think a
lot of people realize where this vote will go anyways, so they didn't bother, but I will.
he spoke about conservation and many of us, myself included, took out my entire lawn all the
way around my house. Why? Because we're supposed to save water, correct? Okay, we're
doing that. The public is doing that now. We're trying to save money with that. Now we're
going to have to pay more for us doing our job. On trying to save water. I understand the
city has done a great job chopping down trees for developments, and that's
probably saving water. But that's not what is the driving force here. One other point
about fairness is I have my own home, but I feel sorry if I understand correctly, that
folks that live in the mobile home parks don't get a vote. Should they have to pay then
they should get a vote for this. But that's not fair. And is it sacramento's fault that they
don't get a vote? I don't think so. I think we could do something about that. Those
individuals have a right to be able to be counted, and there are a lot of them, and many of
them are seniors on fixed incomes, and they don't get a say. Think about that for a
minute. They don't get a say that is wrong. And I think if you would allow them to, you
wouldn't get your little cushy pat, little certain amount of people that answer to the to
the emails and to the letters, you'd probably get a lot more people speaking. I know that I
wrote to every one of you, and of course only one wrote back. And I think most of the public
can realize probably who was the only person on that council to give a darn about writing
back to their constituents, because I read a lot about people not getting any responses. And it's not surprising here. We've done our job as the as residents here.
we pay our taxes, we try to conserve, find the money elsewhere to pay for this,
maybe in compensation packages. Not everybody makes $500,000 a year or other salaries that can
pay that. Think of the people that can't do it. Those folks that may, you know, especially
the older seniors that are counting their pennies and now you want to take away water
from them or make it more expensive. You can find ways you're smart people. You have
no problem getting development past. You can figure this out. I know you can. It's not
sacramento's fault. Everything, sacramento's fault and the public in this town knows that
the taxpayers and the residents never win a thing. Prove me wrong. Final speaker is jerry
bohlen. Thank you, mayor voss. Members of the city council. I think I speak for many people
when I say nobody likes higher water rates, whether it's poway or san diego or anywhere in
california. But for those who might not be aware, if you voted in the state of
california in 1996, chances are you indirectly approved. Tonight's water rate increase
4,202,429 people voted yes on prop 218, the so-called right to vote on taxes initiative.
now, I've heard people I actually thought more people would be here tonight. But if
you listen to various social media next door and some facebook groups that claim to
be organizations, they often blame this council for every water rate increase. It's not
their fault. Now, I've said this in the past and I'll say this again prop 218 is
extremely flawed. It's inequitable. It should be reformed and amended on the
capital steps of sacramento to come in the form of a ballot. More people are likely to
circle a bubble, drop it off at a polling station. Then, rather than print their own pdf file
by a 78 cent, stamp an envelope and mail it to city hall, let alone drive down here. Now
there's an old saying if you want to enact change and you want to do something that's
going to make a difference, complain to the right people. In this case, that might very
well be the howard jarvis taxpayers association and the two authors of prop 218 from
1996, jon coupal and jack cohen. And I just happen to have the howard jarvis taxpayers
association's phone number for its president, john coupal. If you would like to call him and
leave him a message. It's area code 91644499 50 and express your feelings on how it should
be amended and reformed to be more fair and equitable to all the ratepayers. Thank you. That
concludes our speakers and I will now close the public hearing. City clerk, do we need
a continuance to count the number of written protests? No, we do not. I'll now ask the
city clerk to announce the number of written protests received. 7974. Valid protests
are needed to constitute a majority protest. 49 protests were received and verified as
valid by today's 12 noon deadline. Ten protests were received after today's deadline
and have not yet been verified. 59 total protests have been received. This does not
constitute a majority protest. Thank you. I will now ask the city clerk to announce the
number of objections received. Zero objections have been received. Thank you. We'll now
go to council discussion and questions. We'll start with mr. Dayhoff. Thank you, mr. Mayor.
I don't know how you do it. You're you've just remember all those numbers, you know, on the
fly off the top of your head. That's really amazing. I don't think I could do that. I
actually have some other numbers written down. I actually want to thank everybody who's come out tonight. You guys really represent, I think, the folks
who truly care about, you know, learning the what's actually going on, learning the the
truth about things, because you really have to come to these meetings and especially tonight
because it's kind of complicated to really get that whole story, because you really
can't get it anywhere else. There's not a whole lot of people that, you know, watch these videos either. And other places like social media aren't really there for facts. Okay.
and actually, you know, other places like the wastewater joint powers authority, I sit on the board there that has a chamber just like this, and we have the policymakers here.
it's a little bit slightly more policymakers, and it's filled not with the public. It's open
to the public, but it's filled with staff members because, you know, they know the same thing
that they need to show up here to actually understand what's really going on, you know, do
sidebars and to do their jobs. So thank you guys for showing up. You know, knowledge is
power. And, you know, with that comes some responsibility. But you guys are here and hopefully
I'll give you something worthwhile. So if I had to really sort of if I had to
summarize this whole process, this whole study in one word, I think that word would be
transparency. Because this study, this, this whole thing has been one of the most
transparent or led to one of the most transparent documents in powys history. With regard
to what I would like to thank staff, especially you, craig and and eric and and chris for
for making that happen. Because when you look at it, it, you know, in the past, in part
because I've been doing this for a long time out there in the past when paul said, you
know, these are our water rates. What's happening with them? Why are they, you know, going up?
and it's always said, you know, most of our water rates are being driven by our outside
water supplier. And the general critique has been, no, that's not true. You know, there's firetrucks, there's slush funds or whatever. But as we look at this study here, what we can
see, it's broken down really clearly. You know, we're looking at, you know, year over year rate increases of about 3% for sewer and about 4% for for water. And this is in the
context on the water side with the largest infrastructure project or largest, any kind of project in powys history. And both of those numbers are running around the cpi, which
is generally what you expect about inflation. And on the sewer side, what we're looking
at is effectively a refund like craig was talking about. You know, you've got like a 3% year
over year and you've got a 0%. And the difference there is a refund. And and that really
doesn't happen a lot in, in other municipalities. But it's happened here in poway before
with the water rates. And it's happening. You know, again I think it's you know, it's
really I think it it shows how poway is different than other places and in a good way. So,
you know, there have been a couple of things that were missed. We're not going to talk
about too much about that. But I do want to talk about what this what our studies really,
really show. And because our water rates are not going up, you know, we're not paying 4%
more or 3% more, whatever we're paying, you know, a fair amount more for, you know, our water
costs. And it's pretty clear those are coming from the san diego county water authority.
and I think we need to ask our, our, ourselves some pretty hard questions as to, you know,
what's actually going on there. And some of the stuff is known and and it's been discussed,
but there's actually some stuff that people aren't talking about. There's a political cost
or political burden, I'm sorry, that's showing up on the san diego county water side, and
it's coming from san diego city itself. And and the reason it's coming from the city of san
diego is because they basically control that board. You know, we've got our seat on the board,
and it's a weighted vote based pretty much based on how much money you spend or how much or
how much water you use. And san diego controls, like 40% of, you know, the vote there. But
there's this political burden coming from san diego, and it's being spread out across the
entire region, including us. And I want to talk about that because I think we need to
address this. And and what I'm talking about, I've talked about this on the wastewater
side before. And the issue is project labor agreements are coming to the san diego county
water authority. And they're they're really going to be a huge problem. And, you know,
rainbow and fallbrook, you know, they saw the writing on the wall for this and a couple
other things there. And they they detached from the agency a while ago. And that actually
really impacted us. But they're on the edge. They're they're on the northern side. They can
leave. They can, you know, get their water, you know, earlier in the pipe. But we can't. So
we have to deal with this. And I think they left in part because, you know, when you're
going with pla project labor agreements, you know, that current course that that we're all on now, you know, it's going to lead to like some pretty severe downstream
consequences because like it or not, we're sailing, you know, directly into what is a financial storm of our own making. And it's I think it's going to lead to this tidal
wave of costs that, that we haven't seen yet. But I think they're going to swamp us all
because fundamentally, plas, they reduce competition. They get rid of market rate
competition and result in what are true backroom deals. What are single bids effectively
single bids in name only or in actual practice, and they result in massive cost overruns.
and I've talked about this before. On the wastewater side, I talked about where there was a single bidder contract. You couldn't rescope it. It was for a project. There was, you know,
no, no opportunity to do that. It was a $55 million project on the books. And the single bid
came in at 100 and 110, $115 million. So a $60 million ballpark over overage on that.
and that was that's like on the scale of our entire water infrastructure improvement
project. And that was the overage. But, you know, these are coming to, you know, the,
the the water side. And that's going to be a big issue, actually. I'll tell you a quick
story about the pure water program, which is on the wastewater. I have a lot of insight on the wastewater side, because I sit on that board. The pure water program started
out without plas, but because of the political baggage on san diego's side, they started
implementing them, you know, not in the same name, but you know, all the components of the
pla. And they got sued and the the unions basically lost that lawsuit. But the unions were
very smart. And I don't blame them for this. You know, if I was in a union, you'd be
wanting to get as much money for your people. And that's understandable. But our job up here as policy makers, our job is to to make policy and to be the the guardians of the public
dollar. We're actually the last, you know, step in that process. And the folks here who are on
staff, their job is to execute the policy. Even if it's bad policy, their job is to do that
and to do it as well as they as well as they can. And sometimes, you know, some folks have lost
sight of, you know, what their role is when they when they, you know, say whatever is
necessary to get into office. But anyway, the unions, they were smart. They had they had
their guys in the, in the assembly, a bunch of folks there. But they had a point
person, really smart fella, you know, really slick, great smile, a lot of ambition, great
pedigree. Much better tailor than than I have. And back then 2019 ish, he passed an assembly
bill. He championed that it was ab 1290. And what that did is that forced plas onto the pure
water program. And and we and because of this, it actually gives us a really great insight
as to what their true costs are for plas, because the pure water program had a bunch of
contracts that were already made, they didn't have plas and suddenly now they did. And just
a couple examples. There's a bunch. I'll just give a couple. There was this is I think,
contract h176935. It was a $75 million project, you know, competitively bid without a pla.
and as soon as the pla came in, the first thing that happened was there was a $35 million
overage. And that's a 47% increase in that particular contract. And, you know,
another contract, h you know, 176955 that was a $45 million competitively bid contract. And
as soon as the pla came in, the first thing that happened was there was a $40 million overage
on that. So that was an 89% increase in costs. And, you know, that's a lot of money.
that's a lot of money. But it's really just the tip of the iceberg. And, you know, there
was a really good deal that they made, you know, and the the politician guy, you know,
is, is, you know, I you may or may not know him, but I think he's doing pretty well. He's
got a, you know, a great smile, his name. Let's see if I get this right. Maybe you guys have
heard of him. His name is todd. Rex. Gloria. And so and so he brought those costs on. And
we're actually taking it from both ways because of that. Because we pay into the pure
water program. And so we pay direct costs that are higher and that pure. When the pure
water program costs more money, it raises the cost. San diego residents pay for that water.
and and then they use less water. And that means our per unit water rates go up. So we
pay more, you know, on the front end and more on the back end by these things. And now
they're coming to the san diego county water authority. And our guy on the san diego on on the
board there, you know, eric, there is, is basically yelling and screaming about this, but
he's just one voice. And we're a very small voice on that, on that council. And so we need
more voices there. And I think a lot of the policy makers there really don't know what's
what's coming. They haven't seen this before. Most of them. I think a few of them know
what's going on. But but most of them haven't. And it's going to be really insidious there
because unlike the pure water program, it's not going to be there's a bunch of contracts and now they're switching over to pla. It's just going to be straight pla and they're just
going to be really high. And so you guys now know this. You've got some facts some new stuff.
and I'm hoping what we can do and this is including everybody here in this room who's from
poway and outside of poway. What I'm asking everybody to do is try to leverage your
networks, your folks who live in san diego, folks who live in carlsbad, in vista, in san
marcos, you know, santee national city, you know, el cajon, whatever it is, and call
them up and tell them they need to talk to their policymakers because their elected
policymakers, you know, need to know this. And who sit on that board, and they need to tell
the san diego county water authority that it needs to maintain real competitive
bidding, because you got to tell them that water is different because water is different, as jim is saying here, water is, you know, an essential component of life.
it's not like something that's optional. You have to, you know, you have to buy it. And it
demands because of this unique characteristic, it demands the most cost effective methods for
getting it. You know, as I said, we're carrying that message here, but we need need help
with that. And I'm not I'm telling you this to leverage these networks because it actually works. Okay. And now I've said we're the policymakers here, all right.
and and the staff there, they execute policies. I on the wastewater jpa. I raise hell
about single bitter contracts because that was not the only one that $60 million overage. I
see them on occasion and I asked some really tough questions. And I get and they're sometimes they're really uncomfortable questions. You know, some staff members
aren't aren't used to those kinds of questions. And, you know, the next project that was
on that site that came on that after, you know, I'm raising hell about this and other
things. The next project had seven bids. They were all competitive, and there was not
a project labor agreement in sight. So so it works. You know, staff does listen to
policymakers because that's their job. The job of staff is to listen to policymakers. The jobs of the policymakers is to listen to voters and the jobs of the voters. You know, the
job of the voters is really to speak up and and make your voice heard. So I'm hoping, you
know, some of you guys can can help take some action. I know I'm going to be trying to ask
other folks to, but I think, you know, if we all work together, there's a chance we
can actually have a meaningful impact on our future water rates. You know, move the move the dial a little bit. So with that, I will actually thank you for your time. I hope you got
something a little bit useful out of this. And I will move approval. Thank you.
councilmember. Councilmember pikus. All right. I think I'll start. Well, I guess I'll have
to ask, peter, if we use more water, would we have a bigger voice in the san diego water
board? Yes we would. We have to use a a lot more water, though. Just kidding. Okay. Questions
for craig. I guess I should have thought of this before, but in your presentation you
said they pass through has not been approved yet. I thought that was what was discussed back in 2024, when you were going to pass through the increase, or is that just a one
time thing? Yes. Thank you, councilmember pikus. That was just a one time adjustment to
rates, because those were far and beyond what we had forecasted in the last four year rate structure. So just passing on the one year adjustment for county water
authority rates, that went up 13.52%, and we forecast them to only go up 6%. So from now on,
we'll be doing this every year. The adjustment for the pass through, if approved, it would
be authorized to pass that through with a 30 day notice. Correct. Now, also in your
presentation, I guess I didn't realize this when I was reading the materials. Is that the the
4% increase over the next couple of years and the 3% for the sewer does not include
consumer cpi adjustments. I thought it did. Or was that broken out separate? So those
do include adjustments to all the rate classifications outside of wholesale cost. So
on the water side that would include the purchase water cost from san diego county water
authority on the recycled water. It would be the recycled water purchase cost from city of san
diego. And on the sewer side, that would be for the sewer treatment and disposal costs from metro jpa. Everything else beyond that, there's not a cpi included in there or anything
that's all factored into the city component, the 4% on the water side or the 3% on the
sewer side. So so I guess I so the 4% includes the cpi for the stuff that the 4% includes. Is
that what you're saying? Or it includes all adjustments outside of the wholesale cost.
so yes, every other cost that factors into the cost of providing service. So yes. All
right. Thank you for that. Councilmember said. Otherwise other ways it's 4%. It won't be
4% plus a cpi. The 4% is the 4%. And that's to not to exceed amount okay. So if the cpi is
less than that will be less or something. As craig mentioned earlier, if there's additional
revenues or cost savings along the way and there's a there's an ability to recommend a lower
increase, that's exactly what staff would be doing. But we cannot exceed that 4% without
going through an entire prop 218 process. Again, thank you for that. And these all, if we
pass this tonight, this all takes effect tomorrow morning. Is that but you know the bill
comes out every two months. Is it going to be prorated or are you just going to whoever gets
in the billing cycle. It would be effective with bills mailed after today. So beginning
tomorrow with bills mailed, it would include usage over that period. Thank you for that.
let's see. Well peter said a lot and I'm going to clip out most of my notes here. But I'm
just going to say that, you know, I remember a while back his words were the three things,
three things that people look for in a expect from their water system is safe, reliable,
and inexpensive in that order. And I think we've got the safety nailed down and the
reliability and trying to hold the lid on expenses. I had a big thing about all the cost
drivers, but craig already covered it, so I'm going to skip over those pages and
mention that, you know. With careful cost analysis, the city is holding it down to 9.9%. I
think that's pretty impressive and 4% in subsequent years. So very pleased by that. And let's
see, the split between the fixed and per unit costs breaks down to 28% fixed and 72% per
unit. Personally, I would have preferred it to be more per unit. You know, the per unit,
100 gallons used and less the fixed charge, but is you know, and I mentioned that months ago,
but craig pointed out is that you can't really sustain your system like that because if
people start conserving too much, then the system, the water system goes broke. So
this pretty much this model seems to work in most scenarios. And let's see, jim bonner did
mention about the tiered water rates and the fairness. And I sympathize with him because
those were my first words when we started talking about water many months ago was, you know
what? It'd be nice to have different tiers so that people that you know are careless
about their water use would be paying more, and people that are very, you know,
conservation minded would get a break there. But the courts have decided that that's not to
be the case anymore. So five, ten years ago, yeah, you could have done that, but now you
can't. And I realize it's unfair. It feels unfair to the, you know, the apartment dweller
who's paying the fixed charge in the same price per hundred gallon, 100 cubic feet, as, you
know, someone with a couple of acres to water. But that's that's the way proposition 218
was laid out. And unfortunately, we, the courts have said that's the way it's got to be. So
unfortunately, that is not fair. And it disappoints me to. Let's see, built into this cost study
which you didn't bring up, but you mentioned last november was that we do have ample reserves
built into this and but not excessive. So just, you know, at the, at the good levels of
good practice, which gives us permits us to retain our s&p bond rating of investment grade,
double a minus. So that'll help us if we ever need to borrow money again. So good for that.
and apparently for everybody is reevaluating water rates. And we are squarely in the middle
of the pack. They're just slightly below the median, as you had mentioned, a dollar
less than san diego. So per billing cycle. So that's pretty darn good. And. Let's see, our
cost allocation said that this is this is what it costs. So unfortunately this is what we
have to pay. And this is much must pass rulemaking here. Because if we don't pass it,
the water enterprise can't really cut costs. I mean, craig and his people have done
everything they could. And the only you know, if we don't pass this, we either stop doing
maintenance or we start reducing water service or depleting our reserves. And I
think peter showed me a graph of another jurisdiction that considered that and that the
you know, it's like a is like, you know, crash landing into the, the x axis there. So not a
good thing. And if we start cutting service and say, you know, let's just turn off the
water treatment plant between midnight and 6 a.m. Eventually we'd be running afoul of state
and federal law, not to mention fines and litigations from any accidents. So. Sadly, I know no
one's happy about this increase. I don't like passing on increases, but we got to do it.
and so I think most people understand that that's the way it is. And one final point. No.
never mind. No final points. I'll stop there. Thanks so much. And I also second that we adopt
these measures. Thanks. Thank you. Deputy mayor maeda. While some level of increase is
inevitable, I'm concerned about how this will impact our low volume and low income users.
when you're struggling to make ends meet, you reflexively start cutting back on expensive
expenses. So it seems a bit cruel to impose such a high meter service charge and create
a situation where even cutting back to zero gallons won't help you much. I would like to make
a friendly amendment to decrease the bimonthly water meter service charge for single
family utility customers by 25%, and increase the commodity per unit charge by 12%, while
maintaining the yearly rate of increase. This would generate about the same level of revenue, assuming the average residential customer uses 29 units every two months, as
referenced in table two on page five of the report. Do we have a second for that friendly
amendment? I want to hear from craig as to what would a 25%? I guess that would be a 21% fixed
in a. Was it an 89% of variable cost? Yeah. I'm not sure what those numbers would pencil out
to be. We need to go through and kind of scrub what that would look like. But that would
obviously reduce the amount of revenue we bring in on the fixed component as we're trying
to balance out or more balance out where we recover our fixed costs for. So we do have a
significant number of fixed costs, which is why we want to have at least a significant or
somewhat significant amount of revenue brought in from that fixed charge. So we'd have an
imbalance between what our fixed charges are and our fixed revenue sources are. So if
there ever was any kind of drought or lower volume usage, there'd be an imbalance there. It could kind of spiral us downward and we'd have some financial issues. Is there any
mechanism or we can help out those of lower income or have a hard time making these paying
these water bills? Would be alan, chris or craig? I mean, from a legal perspective, I'm
aware of some programs about, you know, not being, you know, certain limitations on forcing
collections of water bills if people can't pay. But, you know, those are state laws. I, I'm
not aware of any other sort of city programs. Can I just say something real? All right. Yeah.
just piggybacking on what alan was just mentioning. There would be concerns using rate
revenue to offset other users costs. So you couldn't use rate revenue to subsidize one class
of users versus the other? There was recently a case up in la for la department of water
and power, where there was a finding against them doing exactly that. So I would I would have some concerns about doing that. Just really quick. There is the san diego or
something we pay into, which is a two on one program which has services for covering costs for
utilities. I think there were like a handful of, I think like 1 or 2 residents in poway who
took advantage of that. So the services are there. They're just not they're not in
practice actually needed in our in our city. Hearing no second for that friendly amendment. I
do wonder if. We're doing enough good enough job of promoting the 211 opportunities
that could be there for those who are less fortunate. It might help backfill some of the
need that's there. I'd like to see if we can do better. Making people aware of that in those
circumstances. It's really uncomfortable to raise rates. We all pay them. You all pay
them. I don't like high water bills any more than anybody else. But wishing doesn't
change the math or the realities that we're dealing with. And to give some context
to those realities, our neighbor, the city of san diego, recently already approved
nearly a 30% increase in water rates, and now they're looking at another 44% increase in the
very near future just to stay solvent. That's frightening. Against that backdrop, what's
before us tonight is measured. It's transparent, and it's responsible, designed to
maintain safe, reliable service, not just now, but for generations to come, while
avoiding the kind of dramatic spikes that other cities are now facing. So with my comments
reflected, hopefully on the 211 thing I will be supporting this. We have a motion from
councilmember dayhoff and a second from councilmember pikus. Since the majority protest does
not exist, a motion to adopt the resolutions establishing water service charges and rates
and sewer services, charges and rates as enclosed as attachments a and b within the
agenda staff report. This is a roll call vote. Will the city clerk please call the roll?
councilmember dayhoff aye. Council member pikus I deputy mayor maita. No. Mayor voss I.
item passes. Moving on to item five. General plan amendment 25 0001 and zone change 25 0001. A
request to change the general plan, land use designation and zoning classification of
parcels or portions thereof to the open space resource management or natural open
space zoning designation at various locations citywide, and determine the project is
categorically exempt from sequa. I will now open the public hearing assistant planner
jasmine sanchez will present the item along with a powerpoint. Welcome, jasmine.
good evening, honorable mayor and members of the council. My name is jasmine sanchez,
assistant planner here on staff this evening I'm presenting a general plan amendment and zone
change to update the city's general plan and zoning land use map for 32 parcels, or
portions of a parcel that currently have biological conservation easements or are
preserved as open space. This item represents a significant milestone towards achieving the
vision of the poway subarea habitat conservation plan, also known as the hcp. In 1996, the
city council adopted the hcp. It is a long term plan designed to preserve threatened and
endangered plant and animal species, as well as their habitats. It covers about
13,000 acres, which is more than half. The city requires that land under a biological
conservation easement, also known as the bce, be rezoned as open space resource management,
also known as osm, to reflect its permanent preservation status. The 32 parcels
identified in the agenda report are all located within the hcp boundaries. With this action,
more than 311 acres would be rezoned for permanent preservation. When a property
owner develops land within the hcp area, they are required to mitigate any loss of natural
habitat caused by that development. In most cases, this is done by permanently
preserving a portion of their property as open space through a bce. A bce ensures that the
protected land will remain undeveloped in the future. For 25 of these 32 parcels, only
the portion of the property under a bce will be rezoned to osm. As shown in the example
above, you can see individual homes that have been developed on the outside of the home is a
green hatched area showing the previously dedicated bce. Only this green area is proposed to
be rezoned, and the remaining portion will continue to be zoned residential. The proposed
rezone will not affect the owner's existing property development rights. The
remaining seven parcels have been acquired by the city for the purpose of preservation.
habitat. In lieu fees have been used to fund all or a portion of these parcels. About 205
acres will be rezoned to osm for permanent preservation. In the example shown above, about
165 acres of land on van dam peak and about 39 acres of land on twin peaks will be rezoned
and remain as open space in its natural condition. The parcels to be rezoned are outlined in
red. The bce and properties acquired by the city have established a large contiguous
open space area. This reflects the city's substantial progress in building the preserve and
achieving the goals of the hcp. This item was duly noticed and was published in the powys news
chieftain on january 8th, 2026. A notice was also mailed out to all property owners and
occupants within 500ft of the 32 parcels being rezoned. Staff recommends the following.
conduct a public hearing. Find that the project is categorically exempt from sequa
approved general plan amendment 25 0001 and adopt the resolution and introduce the
ordinance for zone change 25 0001 for first reading. This concludes staff's presentation
and I'm available for any questions. Thank you. Jasmine. We have no speakers on this
item. I will lead it off. I just want to note with some pride that in recent years
we've continued. Yeah, you all heard me say I close the public hearing, right? Sorry about
that. In recent years we've continued to grow highways, open space holdings. We have
more open space as a percentage of our landmass than any other city in the county. I think,
she said. Right around 50% of the city is open space. That doesn't happen by accident. It
reflects long term discipline, respect for our natural assets and decisions like this one
tonight that lock in preservation for generations to come. So for those that suggest
that we're no longer the city in the country, the facts thousands and thousands of
acres already preserved, augmented now by these 311 acres, say otherwise. The
country, part of the city and the country is alive and well and growing, and I am happy to
move this item. Deputy mayor maida. Any comment? No. Mr. Pikus, I think you've said
everything I would have said. Thanks, mr. Dayhoff. Thank you, mr. Mayor. This is, I think, a
really great opportunity to, you know, secure the open space for generations to come. I saw
a picture of a gnatcatcher there. I like that catcher's eye. They sound like a little
cat's meow when they're when they're little chirps. I have a question, though. So to jasmine,
I noticed here there's a couple of pcs, four and seven and an rs seven property that are
getting zone two open space of some kind, open space. Does this basically put them under
prop control? You know, moving away from that to like if you people wanted to rezone it,
they'd have to go to a vote. Is that an accurate assessment? Yeah. I'm sorry. No problem.
yeah. Yeah I would say short answer is likely. Yes. And all of these, just to be clear, are
already restricted by easements. So I mean as a as a functional matter, they can't really be
developed regardless. But but yes okay. That's great. I thought as much I guess more of
a trivia thing because apparently that doesn't matter. I do appreciate all of these being done at once. You know, every time anything is brought before council, it takes a
reasonable chunk of resources and staff time and money. And so by doing these all in a
block, I think it makes a lot of sense to to save money and improve cost efficiency. So I
believe I will. Am I the second to approve this? Thank you. So we have a motion from the mayor,
a second from council member dorff to approve the resolution and make the determination. The
project is categorically exempt from california environmental quality act sequa as a class
eight categorical exemption pursuant to section 15308 of the scl guidelines. This
project also qualifies under the common sense exemption set forth in ceqa guidelines 1506
one b3, because it can be seen with certainty that it has no possibility of resulting in
significant impact on the environment, and introduce the ordinance for first reading by
title only. Waive further reading and schedule the adoption of the ordinance for
the february 3rd, 2026 regular city council meeting again. Motion by the mayor, second by
council member dayhoff. Will the city clerk please title the ordinance for introduction and
follow the roll call? Vote an ordinance of the city council of the city of poway,
california. Changing the zoning classification of certain properties to open space
resource management os or natural open space os, z 25 0001 council member dayhoff.
aye. Council member picus I. Deputy mayor maeda I and mayor voss I. Item passes. Thank you.
moving on to committee reports and all that stuff. This is an opportunity to briefly share
regional committee assignment updates and or briefly highlight city and community events coming up in the next few weeks, or that you've attended. Council member
dayhoff, thank you. Just really quick. Last year, late last year, I spent I had a dinner at
the fire firefighter station. Thank you, chief mitchell. It was a great experience, you
know, for my family to sort of get the nuance, see the how they actually operate. Very
educational. They're a note for the public is while I was there, you know, they did have an
emergency, as typically happens during the middle of dinner. And, you know, a couple of
folks had to head out. And so they head out and they, you know, did their work and they
came back because the the person calling in who needed help declined to go to the
hospital. And then subsequently, they they got called again by the same person who eventually
got taken to the hospital. And so I just really would encourage the public to
understand that when the paramedics show up at your door, if they have to, they're there
as professionals. They understand your situation a lot better than you do,
particularly because, you know, you're really stressed about having this emergency. Do your best to seriously consider listening to them. They're not cutting corners. They're going
to spend a lot of time at that hospital to make sure you're there safely, and the folks
there at the hospital are going to be able to take care of you. And I think this lady made it
out. But thank you guys for the work that you do. Council member picus I have nothing.
deputy mayor rader. Last week we had the annual breakfast for our senior volunteer patrol in
poway, and it's a great event every year and some stunning stats out of that breakfast.
our senior volunteer patrol last year conducted 9546 patrols. 48,000. Let me get
this right, covering a total of 48,000 miles. They did 3672 vacation checks and 6067
security checks at houses of worship. That's an incredible gift to the city. These
volunteers, day in and day out, augmenting the work of the sheriff's department and
helping with fire situations, too. We are in their debt. It's always great to celebrate with
them and appreciate being able to have breakfast with them. So I wanted to share that. Chris
allen nothing for me. We will stand