Final vote on sewer rate rules and reimbursement for owner-built sewer mains

In plain English

This is the final vote on Ordinance No. 2026-18, which changes the city's sewer rules in Municipal Code Chapter 16.12. It lets a property owner or developer pay for and build sewer improvements — such as sewer mains, lines, laterals, interceptor sewers and pump stations — and then sign a "reimbursement agreement" with the city so later property owners who benefit from that same sewer work pay back a share of the cost. A yes vote adopts the ordinance, which takes effect 30 days after final adoption; the council already approved it for publication on October 13, 2026, by a 6-0 vote with Vice Mayor Kalantari-Johnson absent.

Public Works says some city sewer facilities do not have enough capacity for expected development, so this sets who pays for upgrades: the builder fronts the full cost, and later property owners in the benefited area must pay their pro rata share before the city will issue them a building permit.

Key facts

• Amends Santa Cruz Municipal Code Sections 16.12.010 (Definitions) and 16.12.130, and adds new Section 16.12.140 "Reimbursement Agreement."
• The property owner "shall construct the sewer improvement and bear the entire cost," including design, engineering, construction and inspection.
• "No building permit shall be issued for any benefited property unless and until the property owner has paid his or her pro rata share."
• Each reimbursement agreement must be approved by city council resolution after a properly noticed public hearing, and ends when costs are fully repaid or 20 years after signing, whichever comes first.
• Completed sewer improvements become city property; the city is not liable if it fails to collect reimbursement costs. No impact to the General Fund.
• Takes effect 30 days after final adoption; passed for publication October 13, 2026 (5 councilmembers plus Mayor Keeley in favor, Vice Mayor Kalantari-Johnson absent).