Santa Cruz Water Department Proposes Water Rates for 2027–2031

Why New Rates Are Proposed 

Much of the City’s water infrastructure has reached or is approaching the end of its functional lifespan and is vulnerable to the impacts of climate change. The Water Department anticipates investing approximately $287 million in infrastructure projects over the next five years, including rehabilitation of the Graham Hill Water Treatment Plant and continued investment in augmenting our water supply. 

The proposed rates would also fund daily operations, including water treatment, system maintenance and emergency response. 

The proposal includes changes to fixed monthly charges and per-unit water rates. It would base fixed charges on water meter capacity, combine several volumetric charges into one rate, reduce dedicated landscape irrigation tiers from three to two, and establish temporary drought surcharges that could be used during a City Council-declared water shortage. 

As a public utility enterprise fund, the Water Department is entirely funded by water rates, with no financial support from City taxes or the General Fund. Under California law, water rate revenue can only be used to pay the costs of providing water service. 

Proposition 218 Process and Public Participation 

Customers and property owners are receiving a Proposition 218 notice explaining the proposed changes. The notice includes five-year rate tables, anticipated customer impacts, important dates, and the requirements for submitting a written protest or legal objection. 

The Water Department will host a virtual community meeting on Thursday, Sept. 24, at 5:30 p.m. Staff will provide an overview of the proposal and answer questions from the community. A link to register for the meeting is available at santacruzca.gov/water-rates.  

The Santa Cruz City Council will hold a public hearing on Nov. 17, 2026, after the hour of 10 a.m. in City Council Chambers, 809 Center St. Written protests may be submitted through the close of the hearing. Written legal objections must be received by Nov. 1, 2026. 

Complete information is available at santacruzca.gov/water-rates, including: 

• The Proposition 218 notice in English and Spanish.
• The complete proposed rate tables.
• The 2026 Water Rate Study.
• The 2026 Affordability Assessment.
• Frequently asked questions.
• Virtual community meeting registration.
• Information about the Utility Customer Assistance Program.
• Videos and a podcast explaining Santa Cruz’s water system and what customer rates pay for.