Sacramento City Council Approves Tiered Water Rates Ordinance, Residents to See Adjusted Bills Starting January 2027

The Sacramento City Council passed the Tiered Water Rates Ordinance by a 6-3 vote during its July 8 meeting. The measure creates three usage brackets for residential accounts and applies the highest rate only to daily consumption above 400 gallons. City records show the change targets roughly 18 percent of single-family homes in the service area.

State water officials issued a new drought outlook in May that projected reduced Sierra snowpack through 2027. The council placed the item on its agenda after the Department of Utilities submitted a report showing that flat rates had not reduced peak summer demand in the past two fiscal years.

Most Sacramento households will continue to pay the base rate as long as they stay under the daily threshold. Residents who water lawns daily or operate large irrigation systems will receive notices listing their current average use and projected charges under the new schedule.

Timeline for rollout

The ordinance states that the new rate structure takes effect for bills covering January 2027 usage. The city will begin mailing comparison statements in December 2026 so customers can adjust habits before the first higher bills arrive. Meter readers will continue monthly readings without interruption.

The city clerk's summary lists an estimated $4.1 million in additional revenue for the 2027 fiscal year, directed to reservoir maintenance projects already listed in the capital improvement plan. No new staff positions are funded by the measure.

Public Works crews will install updated rate signs at community centers and libraries by November. The ordinance requires the Department of Utilities to publish an annual usage report each March beginning in 2028.