DATE: October 20, 2026
TO: Board of Supervisors
SUBMITTED BY: Steven E. White, Director
Department of Public Works and Planning
SUBJECT: Waterworks District No. 40
RECOMMENDED ACTION(S):
TITLE
Sitting as the Board of Supervisors:
1. Approve the use of $100,000 from funding in Org 2540 Interest and Miscellaneous Expenditures for District Priorities to pay Waterworks District No. 40 in District 5 for outstanding sewer-related debt, subject to confirmation of the final payoff amount for this purpose.
Sitting as the Board of Directors of Waterworks District No. 40:
2. Adopt a Budget Resolution increasing FY 2026-27 appropriations and estimated revenues for Waterworks District No. 40 - Shaver Springs Org 9360 in the amount of $100,000 (4/5 vote); and
3. Approve a corresponding reduction in sewer rates resulting from the debt payoff and direct staff to coordinate with Waterworks District No. 40 to implement the corresponding reduction in sewer rates resulting from the debt payoff, including determining the appropriate rate adjustment, effective date, and any required Board or District actions, and confirm that the use of County funds and resulting sewer rate reduction will not jeopardize existing State funding or subsidies available to Waterworks District No. 40.
REPORT
There is no increase in Net County Cost associated with the recommended actions. Approval of the recommended actions would authorize the use of $100,000 in District Priorities funding for District 5 in Org 2540 Interest and Miscellaneous Expenditures to pay off Waterworks District No. 40’s (WWD 40) outstanding sewer-related debt, subject to confirmation of the final payoff amount, and establish the necessary budget appropriations. Paying off this debt would allow a corresponding reduction in sewer rates, providing financial relief to District customers. Staff would implement the rate reduction through the required actions and confirm that it would not jeopardize existing State funding or subsidies. This item pertains to a location in District 5.
ALTERNATIVE ACTION(S):
Your Board may choose not to approve the expenditure to provide relief for sewer-related debt or may choose to direct the funds toward another eligible use to assist WWD 40. Staff has not identified a feasible way to use these funds to expedite the State-funded technical assistance evaluation or subsequent filtration plans. The evaluation is proceeding under a State-approved scope and timeline, which County staff does not control. It is intended to identify the appropriate long-term solution and provide the information needed to support engineering, design, and future State funding. Beginning design before the evaluation is complete could result in duplicative work or plans that require revision.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended actions. Sufficient appropriations are included in the Interest and Miscellaneous Expenditures Org 2540 FY 2026-27 Adopted Budget for District Priorities. Approval of the second recommended action will authorize a $100,000 increase to FY 2026-27 appropriations and estimated revenues in WWD 40’s Org 9360.
DISCUSSION:
WWD 40 was established in 1971 to provide community water and sewer for the Shaver Springs subdivision located east of Tollhouse Road, near the intersection of Tollhouse Road and Shaver Springs Road. There are 96 parcels, of which 69 are developed, 23 are undeveloped, and 4 parcels are tax exempt outlots. WWD 40 provides water to one out-of-district user.
The District relies on groundwater wells for its water supply and due to naturally occurring contaminants and the nature of hard rock wells, has experienced ongoing water quality and quantity issues. Over time, several wells have been removed from service due to water quality or production issues. The District's existing groundwater sources are also affected by naturally occurring contaminants. The County is currently coordinating with the State on potential short- and long-term measures to address these issues, including evaluation of additional water sources and treatment alternatives.
Following a Proposition 218 process, water and sewer rates increased effective July 1, 2025, to fund operations, repay District obligations, and begin rebuilding reserves, increasing customers’ bills.
On October, 6, 2026, in response to increased customer costs and ongoing water-quality concerns, your Board approved a $100,000 expenditure under Administrative Policy No. 75 and directed staff to identify the best use of $100,000 in discretionary funds to provide immediate relief to WWD 40 customers. Staff reviewed bottled water, water and sewer debt repayment, and filtration design. Bottled water provides temporary assistance and may be eligible for existing State funding. Staff anticipates that filtration design may also qualify for State funding after completion of the technical assistance evaluation, which must identify the appropriate solution before design proceeds. Applying the funds to water debt would not eliminate the outstanding balance.
Staff recommends using the funds to pay off the sewer debt, subject to confirmation of the final payoff amount. The current monthly sewer rate of $110.99 includes $26.63 for debt repayment.
The State is providing operations and maintenance (O&M) assistance to help reduce customers’ water bills by $38 per customer per month. Paying off the sewer debt and reducing the sewer rate would lower their bills by an additional $26.63 per month while work continues on solutions to the District’s water issues.
Approval of the recommended actions would provide customer relief through sewer debt payoff and a corresponding rate reduction.
REFERENCE MATERIAL:
BAI #6, October 6, 2026
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Budget Resolution
CAO ANALYST:
Maria Valencia