A view of the blue Pacific Ocean crashing into rocks at the glass beach in Fort Bragg, California.
A view of the blue Pacific Ocean crashing into rocks at the glass beach in Fort Bragg, California. Photo by Zahid Lilani on Unsplash

Problem: The City of Fort Bragg’s rate structures required revision to adapt to COVID-19’s impacts and ensure funding for capital improvement projects and asset replacement in upcoming years.

Solution: Rural Community Assistance Corporation (RCAC) is undertaking a rate study and preparing several rate adjustment options to meet the city’s strategic objectives.

Fort Bragg is a city in Mendocino County, California, on the state’s North Coast. The geographically isolated rural community has a population of roughly 7,500. The town hosts a thriving tourism industry and is an economic hub for Mendocino County’s coastal and inland communities. Fort Bragg has been designated a California Historic Landmark and is famous for its natural beauty, towering redwood forests and rugged coastline. There is a large retired population, and most employment opportunities are in service and hospitality. The median household income is less than 60 percent of the statewide average, making it a severely disadvantaged community. The City of Fort Bragg’s primary revenue source is transient occupancy taxes collected from the town’s many vacation rental properties.

The city provides water service to nearly 3,000 connections and sewer service to about 3,700 connections. The prospect of water shortages is a top concern. In 2020, the State Water Board awarded the city a grant to install a water desalination-reverse osmosis system. As a result of good management of reserve accounts, the city now has about $5 million in water replacement reserves and $1.9 million in wastewater replacement reserves. The city plans to spend approximately $50 million on water system projects and $14 million on sewer system projects over the next five years. Many grant programs have been available to Fort Bragg due to its status as a severely disadvantaged community; however, the city must often match the grants.

The city faced new challenges following the COVID-19 outbreak. Transient occupancy taxes precipitously declined at Fort Bragg due to shelter-in-place orders and major water users such as the local craft brewery slashed production, affecting revenue for the city. Economic conditions resulting from the pandemic meant that some low-income households could not pay their water rates. At the same time, the state’s emergency consumer protections prevented local officials from shutting off the water for customers with past due accounts. COVID-related problems such as disruptions in supply chains and inflation continue to plague the city.

RCAC completed a wastewater rate study for the City of Fort Bragg in 2016. The city requested a water rate study and new wastewater rate study in early 2020, but the onset of the pandemic interrupted the studies. On Jan. 5, 2022, the city asked RCAC to resume its work. Since then, RCAC Rural Development Specialist Mary Fleming has worked with city officials to analyze the city’s complicated customer coding and rate schedule to collect water usage and wastewater strength information and translate it into a usable format. RCAC continues to analyze the city’s rate structure and is developing various adjustment options to meet the city’s needs.

“Our city can rely on RCAC for accurate rate studies that give us an analysis and options that we can take to our decision-makers. Mary Fleming has done a tremendous job walking us through this process,” said Isaac Whippy, Assistant Finance Director at the City of Fort Bragg. “We really appreciate the work RCAC is doing for communities like Fort Bragg because it goes a long way in helping us to continue operating our enterprise funds, fund our capital improvements and our operations as well. Thank you, RCAC.”