2014 Rate Change


The mission of the Santa Cruz Water Department is to provide a safe, clean and continuous supply of water that meets or exceeds local, state and federal standards for public health and environmental quality, and to provide courteous, responsive and efficient service in the most cost-effective manner to our customers. We provide water to 93,000 customers, 24 hours a day, 365 days per year and haven’t had a lapse in service delivery in over 100 years.

The City of Santa Cruz’s water utility now faces several challenges to our ability to achieve our mission including aging infrastructure, drought and its subsequent impacts, increasing costs, flattening revenues and water supply instability. In order to address these challenges and continue to provide a safe, clean and reliable supply of water, we are proposing to raise customer rates. A Public Hearing will be held during the regularly scheduled City Council meeting on September 23, 2014 to receive public comment on the proposed rate changes.

Public meeting on Proposed Water Rates: Wednesday September 17, 2014, 6:30PM at Louden Nelson Community Center. 

Please watch this short video to learn about how your water is provided and the challenges the system faces.

View the approved new rates; new rates are effective October 2014 and will change every July.
To see an example of what a formal letter of protest should look like, click here.
To see an example of what a formal letter of support should look like, click here.

Frequently Asked Questions:

Q:   Will the money generated by the rate increase be spent on increased salaries and pensions?

A:   Water Department employee salary and benefits are controlled by the City’s Human Resources Department and there are no scheduled increases at this time. Any future increases would be part of a city-wide adjustment to salaries and benefits.

Q:   Will the money be spent to study desal?

A:   Money raised will be used to fund approved capital projects. Desal is not an approved capital project.

Q:   Why is the rate increase being done now?

A:   The Water Commission began looking at components of a comprehensive financial plan in 2011. The drought and loss of revenues from decreased sales of water now necessitate an immediate rate increase.

Q:   Why are you penalizing customers who already conserve water?

A:   We are all in this together. We are not penalizing customers for conservation. Most of the costs to provide water are fixed, and do not decrease when we sell less water. However because we are selling less water, we aren’t making enough revenue to cover the costs to provide water, fund necessary infrastructure projects and pay debt service.

Q:   Will the new rates include a rate for low or fixed income customers?

A:   No and under the provisions of California Proposition 218, instituting a reduced or “life line” rate is not allowed. All rates must reflect the full cost of providing the service to the customer.

Q:   Is Wall Street the real reason behind the rate increase?

A: Two major rating agencies, Standard and Poors and Fitch, recently downgraded the City’s credit rating, in great part due to the unreliability and unpredictability of our water supply. While this ultimately affects the cost of our debt, it is not the reason behind the need to increase rates.

Q: What will the money raised from rate increases pay for?

A: To fund capital improvement projects that will upgrade and replace aging and outdated infrastructure and to meet our debt service requirements as well as increased operating and maintenance costs.

Q: Is the rate increase due to reduced revenues from drought?

A: The rate change is due to many reasons; however reduced revenues from drought exacerbate the need to raise rates now.

City Council Information

Water Commission Information

Water Department Budget Information

Other Information