AGENDA ITEM NO. 10
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AGENDA STAFF REPORT
City of West Covina | Office of the City Manager
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| DATE: | July 21, 2026 |
TO: |
Mayor and City Council |
FROM: |
Milan Mrakich, City Manager |
SUBJECT: |
PUBLIC HEARING REGARDING THE WEST COVINA CITYWIDE SEWER SERVICE CHARGE COLLECTION METHOD AND ASSOCIATED REPORT |
RECOMMENDATION:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. 2026-67 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, APPROVING THE SEWER SERVICE CHARGES TO BE COLLECTED ON THE FISCAL YEAR 2026-27 TAX ROLL
RESOLUTION NO. 2026-67 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, APPROVING THE SEWER SERVICE CHARGES TO BE COLLECTED ON THE FISCAL YEAR 2026-27 TAX ROLL
BACKGROUND:
From 1968 to 1978, the City of West Covina funded the costs of sewer maintenance and operation through the Improvement Act of 1911 ("1911 Act"), which provided an ad valorem (according to value) levy used to pay for these costs. With the passage of Proposition 13, the revenues generated from the 1911 Act were reduced considerably, which made it necessary to find an alternative method of funding sewer maintenance and operation costs. In Fiscal Year 1978-1979, the City Council established the Citywide Sewer Service Charge pursuant to Section 38902 of the Government Code as that alternative method.
The Sewer Service Charge funds the maintenance and operation of the City’s sewer system, assuring that lines are clear and flowing properly. This includes routine video inspections, jetting, and cleaning of sewer lines. The fees also fund capital improvements, including rehabilitation/replacement of sewer mainlines and appurtenances and purchase of sewer maintenance equipment.
The Sewer Service Charge is based on general land use categories: residential and non-residential. A fixed fee is charged for each dwelling unit for residential property and every 667 square feet of floor area for other types of non-residential developments. Additionally, properties not connected to the sewer main lines are exempt from the charge.
The Sewer Service Charge funds the maintenance and operation of the City’s sewer system, assuring that lines are clear and flowing properly. This includes routine video inspections, jetting, and cleaning of sewer lines. The fees also fund capital improvements, including rehabilitation/replacement of sewer mainlines and appurtenances and purchase of sewer maintenance equipment.
The Sewer Service Charge is based on general land use categories: residential and non-residential. A fixed fee is charged for each dwelling unit for residential property and every 667 square feet of floor area for other types of non-residential developments. Additionally, properties not connected to the sewer main lines are exempt from the charge.
DISCUSSION:
State law requires that a specific procedure be followed to collect the Citywide Sewer Service Charge on the annual property tax bill. The initial step is to adopt a resolution setting a date for a public hearing on the proposed rates and method of collection. At the July 7, 2026 City Council meeting, the City Council adopted Resolution No. 2026-66, declaring its intention to collect the Citywide Sewer Service Charge on the County tax roll for Fiscal Year 2026-27 and setting a public hearing for July 21, 2026.
The purpose of the public hearing is to give property owners an opportunity to voice their concerns on the method of collection. The most efficient and least costly method of collecting the Citywide Sewer Service Charge is to place it on the annual property tax bill. The Citywide Sewer Service Charge will then be collected at the same time and in the same manner as the general property taxes. If the City Council finds that a majority protest is made by the owners of a majority of separate parcels of property described in the report, then the City Council cannot adopt the report and the sewer service charges must be collected separately from the tax roll.
The proposed Sewer Service Charge will remain the same as Fiscal Year 2025-26 at $82.02 per unit. To view the Sewer Assessment Roll and other documents pertaining to the Sewer District, please visit the City website's Engineering Division page, labeled Landscape Maintenance Districts.
The purpose of the public hearing is to give property owners an opportunity to voice their concerns on the method of collection. The most efficient and least costly method of collecting the Citywide Sewer Service Charge is to place it on the annual property tax bill. The Citywide Sewer Service Charge will then be collected at the same time and in the same manner as the general property taxes. If the City Council finds that a majority protest is made by the owners of a majority of separate parcels of property described in the report, then the City Council cannot adopt the report and the sewer service charges must be collected separately from the tax roll.
The proposed Sewer Service Charge will remain the same as Fiscal Year 2025-26 at $82.02 per unit. To view the Sewer Assessment Roll and other documents pertaining to the Sewer District, please visit the City website's Engineering Division page, labeled Landscape Maintenance Districts.
LEGAL REVIEW:
The City Attorney's Office has reviewed the resolution and approved it as to form.
OPTIONS:
The City Council has the following options:
- Approve Staff's recommendation; or
- Provide alternative direction.
ENVIRONMENTAL REVIEW:
The collection of the sewer service charges is statutorily exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15273 (Rates, Tolls, Fares, and Charges) of the CEQA Guidelines, in that the proceeds of the charges are to be used for the maintenance and operation of the City’s sewer system. The collection of the charges is exempt from CEQA pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, in that it can be seen with certainty that there is no possibility that the collection of the charges to fund the maintenance and operation of the City’s sewer system will have a significant impact on the environment
Prepared by:
Robert Ortega Cip Project Manager
Fiscal Impact
FISCAL IMPACT:
For Fiscal Year 2026-27, the Citywide Sewer Service Charge rates are proposed to remain at $82.02 per unit per year. The projected fund balance for end of Fiscal Year 2025-26 is $18,980,189. The projected revenues for FY 2026-27 inclusive of $3,875,299 in assessments, $339,870 in interest income and $447,600 in ad valorem is $4,662,769. Therefore, total funds available for FY 2026-27 are $21,021,840, there are $2,621,117 adopted budgeted expenditures.
The Preliminary Financial Report for Fiscal Year 2026-27 contains the following components:
There are no legal requirements or formal guidelines for the amount of reserves.
The Preliminary Financial Report for Fiscal Year 2026-27 contains the following components:
- Budget and Revenue Summary
- Capital Improvement Project Fund
- Proposed Assessment Rate
- Revised Projected Reserve (Fiscal Year 2026-27)
- Preliminary Sewer Charge Roll
There are no legal requirements or formal guidelines for the amount of reserves.
Attachments
- Attachment No. 1 - Resolution No. 2026-67
- Attachment No.2 - Financial Report for FY 2026-2027
- Attachment No.3 - 10-Year Projection
CITY COUNCIL GOALS & OBJECTIVES:
Achieve Fiscal Sustainability and Financial Stability
A Well-Planned Community
Enhance City Image and Effectiveness
A Well-Planned Community
Enhance City Image and Effectiveness