SacSewer adopts $858m budget, cuts planned bond issuance by $50m following reuse grant

SacSewer adopts $858m budget, cuts planned bond issuance by $50m following reuse grantThe Sacramento Area Sewer District has approved a $372 million operating and $486 million capital budget for FY2026-27, balancing steep chlorine cost inflation with a major grant injection for its Harvest Water project.

The board unanimously approved the budget, which features a 10% operating increase driven heavily by rising liquid chlorine costs.

Planned bond revenues for the treatment system were reduced from $150 million to $100 million after the district secured a $52.1 million state grant adjustment.

The $597.2 million Harvest Water project, which will deliver recycled water to agricultural users, is now approximately 80% grant-funded.

The board also dismissed a bid protest to award a $3.4 million contract to Swierstok Enterprise for the rehabilitation of two secondary sedimentation tanks.

The Sacramento Area Sewer District (SacSewer) Board of Directors unanimously approved its final Fiscal Year 2026-27 budget on June 17, authorizing $372 million for operations and $486 million for capital expenditures. The operating budget represents an approximate 10% increase over the previous year, driven largely by a $24.2 million surge in the cost of services and supplies. The District Engineer noted during the meeting that chemical costs, specifically liquid chlorine, account for one of the most significant increases in the operating budget. The district opted against generating chlorine on-site, as the process would create a high-salinity waste stream that could threaten the utility's discharge permit limits and add salt to the Sacramento-San Joaquin Delta. To support the budget, previously adopted rate increases will take effect on July 1, 2026, adding $2.00 per month for collection system customers and $3.00 per month for treatment and resource recovery customers. On the capital side, SacSewer made a notable late adjustment to its financing strategy. The district reduced its planned bond issuance for the treatment system from $150 million down to $100 million. The $50 million reduction was made possible after the California Water Commission recently approved a $52.1 million supplemental funding adjustment for inflation for SacSewer's Harvest Water Program. The $597.2 million Harvest Water project—designed to deliver up to 32,500 acre-feet per year of recycled water to agricultural lands in southern Sacramento County—is currently at peak construction. During a quarterly update, staff reported that the project has now secured approximately 80% of its total funding through state and federal grants. The district has executed Phase 1 and 2 agreements for 84 on-farm connection assemblies, representing 94% of the program's delivery goal, with pipeline construction nearly complete and pumping station commissioning slated for early 2027. In separate business, the board voted 12-0 to award a $3.4 million contract to Swierstok Enterprise, Inc. (doing business as Pro Builders) for the rehabilitation of Secondary Sedimentation Tanks 10 and 16 at the EchoWater Facility. The board rejected a formal bid protest from Euro Style Management, the second-lowest bidder at $3.77 million. The protesting firm alleged Swierstok lacked the required five years of experience on municipal wastewater facilities. However, SacSewer staff and legal counsel determined the lowest bidder possessed the requisite licenses, had completed projects of similar magnitude, and met all responsiveness criteria.