Sutter County Water Works District No. 1 held a June 16 public hearing on a proposed $594,985 FY 2026-27 budget, with staff telling the Board of Directors that the district’s current service rates do not generate enough revenue to cover ongoing operating costs.
The district is treated as an enterprise fund intended to be financially self-supporting, but the staff report says it has been running a structural operating deficit. The budget narrative says unrestricted net assets were expected to be depleted by July 1, 2026 and that, without additional revenue, the district’s resources would fund only about six months of operations.
The recommended budget is $324,690 higher than the prior adopted budget, largely because it includes a $400,000 capital expense for a backup generator at the water treatment plant offset by a $400,000 federal earmark. The packet also lists a $37,450 increase in charges for services and a $164,349 reduction in professional and specialized program administration to align spending with expected revenue.
In the staff report, County Administrator Steven M. Smith said the district will need to evaluate long-term revenue adequacy to keep the wastewater system financially sustainable. The report also notes the Board of Supervisors, sitting as the district’s Board of Directors, approved a Proposition 218 sewer rate study in August 2025, and that any recommendations from that study will return to the board for consideration.
The board is scheduled to return June 23 for formal adoption of the budget ahead of an Oct. 2 deadline.
