FY 2425 2526 Recommended Operating Budget

Water Operations (continued)

FY 2024 - 25 and 2025 - 26 Activity Goals • Complete the Supervisory Control and Data Acquisition (SCADA) application system upgrade, increase the size of Glen Ayre storage tank from 0.1 million gallons (MG) to 0.25 (MG), and utilize part - time help to assist with meter replacement and help identify and catalog lead pipes on the customer side as required by California Waterboard. • Complete the rehabilitation of Diana Well 3, security fencing at Woodland and Jackson Oaks booster stations, and the retaining wall at Woodland booster station. • Review the possibility of utilizing a third - party backflow inspection company to streamline customer support, increase efficiency, and free up staff to concentrate on other tasks. • Support water supply resiliency and redundancy by working with the Capital Project Team in constructing two additional wells for increased water supply and by constructing a mobile booster station on Condit and Main Avenue. Financial Comments The Santa Clara Valley Water District (SCVWD) Staff proposed to increase the groundwater extraction fees that it charges the City of Morgan Hill. A production fee increase by the SCVWD is automatically built into the City ’ s water rate structure which was approved by the Council. Therefore, the City will pass on that increase to its water customers. The proposed pass - through charge is approximately $0.14 per unit Hundred Cubic Foot (HCF) of water consumed. For the average customer who consumes 14 units per month, the increase will be an additional $1.96 per month. These pass - through charge and Council - approved rate adjustments in June 2022 are necessary to keep the operations viable and fund the water capital improvement program (CIP).

232 PUBLIC SERVICES