Notice of Public Hearing on Proposed Water Rates
Purissima Hills Water District (PHWD or District) will hold a public hearing on Wednesday, August 12, 2026, at 6:00 pm to consider adopting proposed water rates, including monthly minimum (readiness to serve), consumption, water shortage rates, and adding monthly cross-connection charges for applicable backflow devices. If approved by the Board of Directors, the first rate adjustment would take effect on October 1, 2026, with subsequent adjustments proposed to take effect on July 1, 2027; July 1, 2028; July 1, 2029; and July 1, 2030.
The proposed rates are based on the District’s 2026 Water Rate Study. The proposed rate schedules are included in this notice. The Board will consider all written protests received before the close of the public hearing on August 12, 2026, in accordance with Proposition 218, and separately will consider all legal objections submitted by July 6, 2026.
Why Water Rates Matter
The proposed water rates are designed to support the reliable delivery of high-quality water service to the District’s customers. Revenue generated from water rates funds the operation, maintenance, repair, and replacement of critical water system infrastructure, including pipelines, storage tanks, pumping facilities, and other system assets necessary to provide safe and reliable water service.
The District periodically conducts comprehensive water rate studies to evaluate the cost of providing service and to ensure that rates remain fair, transparent, and consistent with California Proposition 218 requirements. The current water rate study was prepared by an independent rate consultant and evaluates the District’s projected operating costs, capital improvement needs, reserve policies, and long-term financial stability over the next five years. Additional information regarding the rate study is available on the District’s website.
Overview of Proposed Water Rate Structure
The District’s current water rates include a monthly readiness-to-serve charge based on meter size, a consumption charge based on water use measured in hundred cubic feet (“ccf,” equivalent to 748 gallons), and an SFPUC wholesale pass-through rate. Residential customers currently pay a four-tiered consumption charge, and Institutional customers pay a uniform consumption charge.
The proposed rate schedule updates the District’s monthly minimum (RTS) charge, adds a monthly cross connection charge for applicable backflow devices, updates the consumption charge structure (discussed below), and updates the SFPUC wholesale pass-through rate approach. The rate study also includes water shortage rates that may be activated only during declared water shortage stages, to fairly recover the District’s revenue requirements when customers alter their usage during periods of mandatory lower water consumption.
Frequently Asked Questions
The exact increase to your bill will depend on your water usage, size of water meter, and whether your account is residential or institutional and also, if you have a backflow device. To help understand how your bills are likely to change after October 1, 2026, we have provided a tool at the top of this page that will calculate your new bill and the change from the current rates.
The District began this rate-setting process by engaging Water Resources Economics, LLC (WRE) in 2025 to conduct a comprehensive water rate study, with the following objectives:
• Evaluate a six-year financial plan scenario to meet financial targets from Fiscal Year (FY) 20261 to FY 2031
• Conduct a cost-of-service analysis based on the most recent data and customer use characteristics
• Develop a five-year water rate schedule from FY 2027 through FY 2031
• Develop a five-year water shortage rate schedule from FY 2027 to 2031
• Calculate updated water capacity fees (previously known as facility charges) for FY 2027 to be adjusted by CPI (Consumer Price Index) for future years
The Board of Directors considered and reviewed the study and water rate change at 6 public meetings from October 2025 through April 2026 to make sure that the water rate changes were necessary, proportional, and in the best interest of the District, its customers, and the community.
PHWD, like most public agencies that provide essential public services, is constrained in the way it sets rates due to the substantive requirements of Proposition 218.
Proposition 218 states that “property related fees and charges” (which include retail water rates) may not exceed the proportional cost of providing the service to the customer and may not be used for any purpose other than providing said service. The primary means by which retail water agencies address this requirement is by conducting a “cost-of-service analysis.”
As part of this rate study process, WRE worked with the Board and District staff to evaluate alternative rate structures. These alternatives include reducing the number of tiers for the Residential consumption charge from four to three tiers, or alternatively, implementing a uniform rate for all Residential customers.
The updated 2026 Water Rate Study goes into further detail on how the tiers were determined.
Meter charges are assessed to every customer based on the size of the water meter. The District allocates “fixed” costs through the meter charge, which are costs incurred by the District that do not vary based on water use or demand. The fixed charges represent the customer’s fair share of the system cost, based on the maximum safe flow/capacity as determined by meter size.
Fixed system charges are core costs of operating and maintaining the system, regardless of how much water a customer uses.
Yes! We encourage community participation. A public hearing will be held on August 12, 2026 at 6:00 pm at 26375 W Fremont Rd., Los Altos Hills, as part of the Proposition 218 process to adopt the 5-year rate study. This is an opportunity for customers to share their feedback and ask questions of the Board before the rates are finalized. Additionally, all District water customers and property owners are provided with an opportunity to protest these proposed rate changes by submitting a written protest by mail.