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Please note that there is a 120-day statute of limitations for challenging all water rates should the proposed adjustments be adopted. Page 6 of 8 Drought Surcharge Rates – All Customers Demand Surcharge Rate (per HCF) Stage Reduction 1/1/2026 1/1/2027 1/1/2028 0 0% $0.00 $0.00 $0.00 1 10% $0.38 $0.40 $0.42 2 20% $0.85 $0.90 $0.95 3 30% $1.45 $1.54 $1.62 4 40% $2.25 $2.39 $2.51 5 50% $3.38 $3.58 $3.76 6 60% $5.07 $5.37 $5.64 PASS-THROUGH ADJUSTMENT The proposed rates for the water use charges are based on SFPUC’s actual wholesale water rates effective July 1, 2025 and projected wholesale water rates effective July 1, 2026 and July 1, 2027. Currently, SFPUC’s wholesale water rate is projected to be $5.86 per HCF for July 1, 2026, and $5.93 per HCF for July 1, 2027. Pursuant to California Government Code Section 53756, the City is proposing to pass through any variations to the projected SFPUC wholesale water rates through the City’s water rates. A pass through will be implemented by increasing or decreasing the City’s proposed water use charges by the amount of the SFPUC wholesale water rate increase or decrease in cents per HCF in excess or below the projected SFPUC wholesale rates for July 1, 2026 and July 1, 2027. For example, if the SFPUC raises its wholesale water rate to $5.96 per CCF on July 1, 2026 (instead of the projected $5.86 per HCF), the City may increase its water usage charge by an additional $0.10 per HCF on or after July 1, 2026. Prior to implementing a pass-through increase of the SFPUC wholesale water rates, the City will send written notification to all customers at least 30 days prior to the effective date. PUBLIC HEARING ON PROPOSED RATES At the November 10, 2025 public hearing, the City Council will consider oral and written testimony, as well as written protests and written objections submitted by property owners and customers of record against the proposed water rates. Property owners or customers of record may file a written protest or a written objection to the proposed water rates. The requirements for filing a protest or objection are detailed below. While the same person or entity may file both a protest and an objection, to be valid, protests and objections must be submitted separately, as clearly labeled, distinct documents. How to Participate, Protest, or Object to the Rates The proposed water rates are considered property related fees and charges governed by section 6 of Article XIII D of the California Constitution, Government Code sections 53751 et seq. and 53759 et seq., and other applicable laws. There are multiple ways that property owners and customers of record, as well as any other interested members of the public, may participate in the water rate adoption process. • Learn About the Proposed Rate Change - Information on the proposed water rates and the written basis for the rates, including the 2025 Water Rate Study, are available at ATTY/RESO.0072/CC RESO INITIATING PROP 218 PROCESS TO ADOPT WATER RATES - EXHIBIT A REV: 07-09-25 MI