Santa Clara council adopts 2025 water, sewer and recycled-water rate increases citing rising wholesale costs

Santa Clara City Council on Tuesday approved amended rates for municipal water, sewer and recycled-water service that take effect July 1, 2025, following a public hearing that included a technical presentation from the city’s Water & Sewer Utilities staff and a report from the deputy city clerk on formal written protests.

The council’s action comes after an in-depth staff presentation led by Gary Welling, director of Water & Sewer Utilities, who told the council that “pass-through” charges from wholesale suppliers account for most of this year’s proposed increases. Welling said Valley Water’s multi‑year increases and the major capital and operating work at the South Bay regional wastewater facility (RWF) are the principal drivers.

Welling said the utility is proposing a roughly 11.2% increase for water service in fiscal year 2025–26; sewer increases of about 9.9% for single‑family residential service and 7.8% for multifamily; recycled water would rise near 7.3%. Staff showed the average monthly bill impacts: a single‑family residential combined water‑sewer bill was estimated to rise about $17.07 per month and multifamily about $15.72 per month.

The staff presentation included system facts: roughly 27,000 water and sewer connections, about 335 miles of water mains, 288 miles of sewer mains, 20 active groundwater wells and seven water storage tanks. The city is a 20% owner of the regional wastewater facility joint‑operation and the RWF’s planned sludge dewatering facility and other RWF projects are increasing sewer costs. Welling said the city’s recycled water program supplies roughly 20% of summer demand and remains a lower‑cost option than potable water.

Deputy City Clerk reported that the city received 13 written protests to the proposed water increase and 14 written protests to the proposed sewer increase; the clerk said those protest counts did not reach the majority threshold required under Proposition 218, allowing the council to proceed to a decision.

After questions from council members about Valley Water’s projected multi‑year rate increases, the cost of operating and maintaining wells and pump stations, the city’s capital improvement program for water and sewer, and affordability programs, Councilmember Karen Hardy moved to adopt the staff recommendation. The motion passed and the council approved the amended rate schedules to be effective July 1, 2025 (vote tally: outcome recorded in the public minutes; the transcript does not supply a detailed roll‑call tally). Staff said the utility will continue to advertise customer assistance programs and reported 293 customers were enrolled in the city’s low‑income water and sewer assistance program and other assistance options are available through regional partners.

Why it matters: staff framed the increases as primarily driven by outside wholesale cost pressures and large, multi‑year capital projects at regional facilities. Council members emphasized the importance of affordability measures and asked staff to continue to work with wholesale suppliers and regional partners on cost containment and to expand outreach to residents about bill‑assistance programs.

What’s next: the new rates become effective July 1, 2025; staff will continue to monitor wholesale cost projections from Valley Water and the RWF, pursue rate‑mitigation strategies, and report back if additional policy actions are recommended.