The Board of Public Utilities on Monday recommended permanently closing the city's discounted agricultural water rate program to new customers after determining the program is nearing its financial cap, while also approving a five-year environmental consulting contract for the city's three power plants.
The board voted 6-1 to recommend that the City Council formally close the WA-12 Agricultural Service Water Rate Schedule to new applicants, with Vice Chair Peter Wohlgemuth casting the lone dissenting vote after arguing the city should instead explore expanding the program.
The recommendation formalizes a decision Utilities General Manager David Garcia made in September 2025 to stop accepting new customers into the WA-12 program after it approached its annual subsidy limit.
Brian Seinturier, Assistant General Manager of Finance and Administration, told the board the discounted rate was created in 2019 after a 16-member Agricultural Water Rates Task Force spent more than a year developing a replacement for the city's previous agricultural water rates.
Unlike traditional agricultural rates, WA-12 discounts only water used to irrigate qualifying crops. Household, commercial and ornamental landscape water use is billed at standard residential or commercial rates through a water allocation formula based on Riverside's climate, crop type, planted acreage and irrigation efficiency.
When the program was established, officials capped annual financial assistance at $684,000 — roughly the amount the utility had historically under-collected from earlier agricultural rate programs.
According to the staff report, the subsidy is funded through non-rate revenue to comply with Proposition 218, which requires water rates to reflect the actual cost of providing service.
As of May 31, the program served 245 customers — 206 residential and 39 commercial — with approximately $597,000 of the annual allocation already committed. Staff projected that existing customers alone will consume nearly the full $684,000 cap by 2028 as scheduled water rate increases take effect.
Because the program is approaching that limit, staff recommended permanently closing it to new applicants while allowing existing participants to remain enrolled.
Two speakers urged the board to reconsider ending new enrollment.
Kevin Dawson, who said he participated in several meetings of the original agricultural water task force, said the program deserves another review rather than being effectively frozen.
"I think that it's been…six years going on seven [since the last task force] and it would be a good time for a review – and maybe to that end, a new task force empaneled and given a much shorter time period to do the work, say like three to six months to review the program," said Dawson.
Gurumantra Kalsa, who served as the Ward 2 representative on the former task force, criticized the city for limiting a program intended to support agriculture.
He questioned the city's reliance on Proposition 218 and argued infrastructure costs should be allocated differently rather than limiting agricultural customers.
"I'm dismayed that after 10 years of Grow Riverside, all we've done is virtue signal and we have nothing virtually to show for it for the effort," Kalsa said. "Your best guess is $684,000 of undercollected monies. This is a perfect example of decision debt. The city lost its general fund transfer lawsuit because it violated Prop 218 and now you're using Prop 218 to cut off access to the folks in the city charter, which says agriculture is the primary use for our water supply."
Wohlgemuth questioned staff about how the funding cap was established and whether it reflected the original intent of the task force.
He noted that staff previously estimated roughly 12,800 parcels within Riverside's sphere of influence could potentially qualify for the agricultural rate if they met acreage and crop requirements, yet only 245 customers currently participate.
"It strikes me as somewhat unfair that the program is now being limited by what seems to be an arbitrary cap," Wohlgemuth said.
He asked whether the City Council could increase the subsidy if additional non-rate revenue became available.
Assistant City Attorney Susan Wilson said the rate schedule allows the City Council to increase the program limit through a resolution if it identifies additional non-rate revenue that complies with Proposition 218.
Wohlgemuth said he hoped the City Council would explore expanding the program rather than permanently limiting participation.
"If the intent of the original program was to support and promote agriculture within the city of Riverside, I don't think it said, 'but only up to a cap of $684,000,'" he said.
Despite his objections, the board approved staff's recommendation on a 6-1 vote. The proposal now heads to the City Council for final consideration.
The board also on Monday unanimously recommended a five-year, $1.72 million consulting agreement with Ontaris USA for emissions testing and environmental compliance services at Riverside Public Utilities' three natural gas-fired power plants.
Utilities Resource Analyst Jessica Spiking said the city's Springs, Clearwater and Riverside Energy Resource Center plants together provide up to 260 megawatts of generating capacity and must comply with extensive federal, state and local air quality regulations.
The contract covers required emissions testing for all nine generating units and preparation of more than 3,300 regulatory reports each year.
Spiking said Ontaris — formerly known as Montrose — is uniquely positioned because it provides both emissions testing and environmental consulting under a single contract and has supported Riverside's generating facilities for more than 20 years.
She said the company negotiated annual price increases capped at 5% and offered testing costs well below prevailing market rates. The utility also expects additional savings by consolidating multiple required emissions tests into single site visits, reducing annual testing costs by more than $50,000.
Board member Tom Evans asked whether the contractor carried sufficient professional liability insurance and whether the utility had experienced any significant errors during the company's two decades of service.
Principal Resource Analyst Jim Perez said the city has never needed to file an insurance claim against the consultant and that any minor mistakes had been promptly corrected.
Wohlgemuth said the company's long track record and competitive pricing justified continuing the relationship despite the absence of a competitive bidding process.
"It seems that this is a no-brainer," he said. "Why would we change horses at this stage and go with somebody else when we have a proven track record of people who have done the job successfully?"
The board unanimously recommended that the City Council approve the agreement, which would run from July 1, 2027, through June 30, 2032.
Before adjourning the item, utilities staff recognized Perez, who is retiring this week after 17 years with Riverside Public Utilities.
The WA-12 vote comes as Riverside Public Utilities navigates a broader set of water rate pressures. A judge ruled in April that the city had billed water ratepayers unconstitutionally for years, a case that could require more than $46 million in refunds. Separately, the City Council in June hired Carollo Engineers to study future water rates ahead of the current five-year rate plan's expiration in 2028.
