The Scotts Valley Water District is proposing a rate increase and changes to the rate structure. The rate increase is being considered so that the District can pay for ongoing operations and replace aging infrastructure. The District has fixed costs that need to be met regardless of customer water demand, including maintenance and upgrades, customer service, and staffing. The Scotts Valley Water District Board of Directors will hold a Public Hearing at 6:30 p.m. on Oct. 8, 2026. The Board of Directors will consider adoption of the proposed water rates and changes to the water rate structure affecting all water customers. Interested persons are encouraged to attend and comment on the issues being discussed. The meeting will be held in a hybrid format, online and in the Santa Margarita Community Room located downstairs at 2 Civic Center Drive, Scotts Valley, CA 95066.
When would it go into effect?
If adopted, the proposed new rates would take effect Jan. 1, 2027, with annual increases each Jan. 1, up to and including Jan. 1, 2031. The scheduled increases would take effect without further rate hearings, provided the increases do not exceed the amounts noticed herein. The District retains the discretion to adopt rates lower than proposed.
What is the anticipated impact to a single-family household?
A median single-family household is paying $91.73 a month for water service, based on an average of 3,600 gallons used in a month. Under the proposed rates, the median household’s monthly bill is expected to be $99.34, an increase of $7.61.
Why did the District conduct a rate study?
One of Scotts Valley Water District’s strategic goals comprises a management objective of designing and managing balanced and fair revenue sources that are sufficient for meeting operating and capital needs while providing for adequate reserves. The District recognizes the challenges as it strives to provide essential services to the community, fully fund the costs of providing and sustaining good service and keep rates and fees fair and affordable.
At the direction of the Board, the rate study process began in Nov. 2025. The goals of the study include determining the District’s revenue requirements, conducting a cost of service analysis and creating rate models that show a clear nexus between the District’s costs and customer rates.
Does the proposed increase go towards salaries and benefits?
A nominal portion of revenue received from the increase will help the District to maintain its efforts to recruit and retain a skilled workforce that receives compensation on par with similarly sized water utilities in the region.
What annual water rate increases can customers expect in the future?
The Board is committed to evaluating water rates annually and setting rates based only on District needs. The table sets the maximum allowable rate. In the past the Board has implemented lower rates than previously adopted.
Are there changes to the water rate structure?
Yes, there are two changes:
- Three Tiers for Residential Volumetric Charges: The District plans to reduce the number of tiers for Residential customers from four to three tiers beginning in January 2027.
- Discount Program Update: The District plans to charge both Rate Assistance and Qualifying Medical Needs usage based on the Tier 1 rate.
Where can customers learn more about this?
The District will hold two more public meetings focused on the proposed rate increase.
Community Meeting
When: 4:30-6:30 p.m. on Wednesday, Aug. 19, 2026
Where: Santa Margarita Community Room, 2 Civic Center Dr, Scotts Valley, CA 95066
Public Hearing
When: 6 p.m. on Thursday, Oct. 8, 2026
Where: Santa Margarita Community Room, 2 Civic Center Dr, Scotts Valley, CA 95066
At the Public Hearing, the Board of Directors will consider adoption of the proposed water rates and changes to water rate structure affecting all water customers. Interested persons are encouraged to attend either events and provide input.
