Wastewater Rate Adjustment


In 2017, the City Council approved a Sewer System Master Plan (PDF) for future repairs and improvements to the City’s wastewater system. The Master Plan identified $57 million in expansion and capacity related improvement projects (impact fee funded) and $52 million in improvements necessary to repair the City’s existing system (ratepayer funded). City staff have determined the impact fee funded projects can likely be funded through the projected impact fees and/or financed through bonding against future impact fees. However, staff have identified a significant shortage in funding to make the needed repairs and improvements to the existing system, which is the primary factor in moving forward with a rate study.  

Rate Study

The City of Morgan Hill engaged NBS Government Finance Group to develop a sustainable wastewater utility financial plan and make recommendations on rate changes necessary to meet ongoing operational and maintenance needs of the City’s aging sewer infrastructure. For years, the City was able to effectively maintain the sewer infrastructure without significant rate increases. However, it is now necessary for the City to make the legally required upgrades to the existing system to prevent any significant malfunctions/failures in the future.



The City conducts a thorough and transparent public process prior to implementing any rate adjustments. The rate study and the financial analysis has been prepared by the independent financial consultant (NBS) to determine true costs of service and what rate adjustments are needed. 

February 6, 2019 - City Council receives background information on the City's wastewater system needs and proposed a rate study schedule. (Completed)

February 8, 2019 - 2019 Wastewater rate study made available. (Completed)

February 20, 2019 - The rate study is introduced at the City Council meeting and general policy direction is provided. (Completed)

February 25, 2019 - Public meeting to review rate study with community members, answer questions, receive feedback. (Completed)

March 6, 2019 - Staff to return to City Council with any proposed changes from February 20th meeting, and present any feedback received from the February 25th public meeting. Council is expected to finalize the proposed rates at this meeting, and direct staff to commence Proposition 218 noticing and setting May 1st as the Public Hearing for adoption of rates.(Completed)

March 11, 2019 - Staff will initiate Proposition 218 noticing during this week and commence the 45-day protest period. (Completed)

May 1, 2019 - Public Hearing - City Council will review Proposition 218 protests, conduct public hearing, and consider adoption of rates.

July 1, 2019 - New adopted rates go into effect.