TRUCKEE, Calif. — The Truckee Donner Public Utility District on Wednesday adopted an ordinance establishing new water rates for fiscal years 2026 through 2030, approving annual increases capped at 6.5%.

According to the district’s revenue requirement analysis, failing to adjust rates would leave TDPUD facing a 37% funding shortfall over the next five years — a gap that would prevent the district from breaking even, covering annual expenses, or maintaining the financial stability needed to operate and improve the water system.

During Wednesday’s public hearing — the final step in the Proposition 218 approval process — officials explained that the increases were developed through a comprehensive cost-of-service study to ensure rates remain proportional and tied directly to the cost of operating, maintaining and upgrading Truckee’s water infrastructure.

For many residents, however, the rising rates underscore the increasing financial strain of living in the region.

“A rate increase for seniors on Social Security is unsustainable with limited income,” wrote resident Karen F. Mayer in a formal protest letter. “Seniors will be forced to choose between utilities and basic necessities.”

More than 200 people submitted formal objections to the proposed rates. The Board of Directors ultimately voted to resolve and reject those objections, determining that the concerns raised did not warrant clarification or changes to the proposal.

“Affordability matters. A 6.5% annual increase may not sound like much, but compounded year after year it becomes a major burden,” one community member said during public comment. “For families, retirees on fixed incomes, small-business owners — this is not sustainable.”

Several residents questioned the district’s internal efficiency and called for an audit before turning to ratepayers for more funding. Board member Jeff Bender responded that the district’s capital improvement plan, available online, includes a full breakdown of the system’s capital structure and an engineering analysis outlining what is required to maintain the infrastructure.

Under Proposition 218 — the “Right to Vote on Taxes Act” — water rates must be based on the actual cost of service. Agencies must mail notices to parcel owners, wait at least 45 days before holding a hearing and provide an opportunity for formal protests. To meet those requirements, the district held two public workshops, mailed notices to all parcels receiving water service, and published the hearing notice in the Sierra Sun. The new water rates will take effect with the first billing cycle after Jan. 1, 2026.

“I don’t like paying more either,” said TPUD board director Courtney Murrell. “But if we don’t take care of what needs to be done now, we’ll end up paying a lot more later.”

Each November, the board may lower the previously approved rate increase if costs decrease, though it cannot raise rates above the adopted annual cap. After Wednesday’s hearing, board members added language to the ordinance requiring an annual review and rate-setting process for the following year.

“While we have the responsibility to keep rates affordable,” TPUD President Christa Finn said, “we also have the responsibility to keep this community safe, and to keep our infrastructure functional.”

Looking beyond 2030, the district’s cost-of-service study anticipates rate increases tapering to 3.5% annually, including an inflation factor of 4%.