The Santa Monica City Council unanimously approved a water rate increase this week to fund rehabilitation of the city's aging water storage reservoirs and replace critical infrastructure.
The approved plan will increase water rates by 20% in the first year, followed by increases of 16%, 9%, 9%, and 6% over the subsequent four years. Wastewater rates will rise by 7% for the first three years, followed by 6% increases in the final two years.
For the average single-family home, the combined bimonthly water and wastewater bill will increase by approximately $37 each billing cycle over the five-year period, or about $19 monthly. Multi-family residential buildings with eight units will see approximately $80 increases in bimonthly bills, translating to roughly $10 monthly per unit. Commercial customers can expect bimonthly increases averaging $146 per year.
"This is the only viable option because it would rehabilitate all four potable water storage reservoirs on an eight to 10-year period," said Councilmember Caroline Torosis. "As the climate crisis intensifies, and as we know how important it is to have safe, clean potable water, we have to invest in making sure that we have a system that has all the capital improvement projects funded."
The rate increase will fund rehabilitation of four water storage reservoirs with a combined 40-million-gallon capacity — equivalent to about four days of the city's total water supply. These reservoirs, ranging from 60 to over 100 years old, are essential for daily water demands and responding to emergencies like the recent wildfires that threatened the region.
Sunny Wang, Water Resources Manager for Santa Monica, emphasized the risks of deferring maintenance on the aging infrastructure and said all water in the city must pass through a reservoir before distribution making them a lynchpin of the service.
"The risk of failure in a seismic event, or just due to the age of the reservoirs itself — anywhere from 60 to 70 years old, 100 years old — is inability to provide water during emergencies like the wildfire event," Wang told the council. "Depending on which of the four reservoirs fails, we could lose our entire water supply."
Despite the increases, city officials note that Santa Monica's water rates remain competitive with neighboring communities. The proposed first-tier water rate for single-family homes still falls within the range of rates charged by Culver City, Los Angeles Department of Water and Power, and Beverly Hills. For multi-family properties, Santa Monica's rates are comparable to those in Pasadena, Beverly Hills, and Culver City.
Wang highlighted that Santa Monica offers greater water supply diversity than many neighboring systems, a factor that proved crucial during recent emergencies.
"During the fires, we actually ramped up our water supply to 110%," Wang said. "We were able to do that because of our sustainable water infrastructure project that we ramped up to 100% to fill water trucks if needed, and that didn't put any strain on affordable water supply for the fire hydrants."
The rate increases follow five years of revenue shortfalls totaling approximately $27 million across the water and wastewater funds. Officials attribute these shortfalls to the COVID-19 pandemic, which reduced commercial and multi-family residential water usage, and climate change impacts that created alternating drought and wet winter periods affecting water consumption patterns.
Despite these financial challenges, the Water Resources Division successfully delivered several key projects over the past five years, including the Arcadia Water Treatment Plant expansion and an advanced water metering infrastructure system. The city secured these achievements by obtaining grants, low-interest loans, and deferring routine capital projects.
The rate structure maintains provisions for low-income customers, offering discounts on first-tier water rates for qualified single-family households. The discounts, which benefit more than 360 customer accounts, are subsidized by the city's General Fund at approximately $115,000 annually for water services and $40,000 for wastewater services.
The city plans extensive community outreach before final adoption, including neighborhood meetings and forums. Officials will distribute Proposition 218 notices to customers beginning April 11, with a public hearing scheduled for June 10. If adopted, the new rates would take effect July 1.
- * Water bills are estimated to increase by $37 per billing cycle (not per year) for a monthly average of $19.
