Sacramento’s water bill is coming due in a big way. City officials say the water, wastewater and drainage systems need roughly $2.2 billion in upgrades, and a new rate study now underway could translate into phased increases on customer bills. Aging plants, years of deferred maintenance and rising prices for energy, chemicals and construction are all pushing costs higher, and the city still has to decide how much will be covered by new utility fees, bonds or some mix of both.
Where the shortfall shows up
Recent city financial materials and reporting put total system needs at about $2.2 billion and show the utilities budget already straining. The water fund’s expenses outpaced revenue by roughly $30 million this year, and wastewater is operating in the red with the deficit projected to grow unless something changes on the revenue side. Dalia Fadl, the city’s utilities director, said the department is trying to keep any future increases as affordable as possible, according to the Sacramento Bee.
What the city is planning
The Department of Utilities is leaning on its WaterPlus program as the backbone of the overhaul, with plans to modernize treatment plants and distribution systems across the city. The project page shows the Final Environmental Impact Report is now available and that design work could begin in mid-2026, with some construction starting as early as 2027. WaterPlus centers on treatment-plant resiliency, a new Sacramento River intake and transmission and distribution upgrades meant to boost reliability. Per the City of Sacramento project page, the program will roll out in phases and be coordinated with other capital projects.
Rate process and public hearings
City meeting materials and the Utilities Rate Advisory Commission workplan outline a string of workshops, public outreach efforts and a Proposition 218 hearing as staff refine a formal rate proposal. Under that schedule, any proposed increases would go through the legally required notice and protest process before the City Council could sign off on changes. The Utilities Rate Advisory Commission’s materials spell out the 2026 calendar for workshops and hearings, according to city meeting documents.
How big the increases might be
City financial planning documents model several multi-year scenarios that would raise revenue by tens of millions of dollars a year, with the twin goals of rebuilding reserves and paying for capital work. Those plans lay out different rate adjustment pathways that staff are using to shape the rate study and test affordability under a range of capital and operating assumptions. The city’s water-fund review contains the cash-flow projections and scenario tables that are informing staff recommendations, according to the city’s financial report.
What the money would pay for
Officials say the new spending would go toward treatment-plant repairs, transmission and distribution main projects, pump-station upgrades and ongoing maintenance throughout the system. The Department of Utilities also maintains thousands of fire hydrants citywide, and staff told reporters they expect to invest about $70 million through the utilities’ capital improvement program on early projects while fees remain split into separate water, wastewater and drainage funds. That upfront investment and the underlying operating shortfalls were reported by the Sacramento Bee.
Next steps for residents
In the months ahead, the utilities department plans to hold public workshops, deliver a final rate study to the Utilities Rate Advisory Commission and then bring formal proposals to the City Council. After that, a Proposition 218 protest period would determine whether the adjustments move forward. Residents who want to follow the money should keep an eye on URAC and council agendas for workshop dates, proposed rate tables and the official protest hearing. City staff say the final package will spell out the size, timing and distribution of any increases.
Bottom line
City leaders describe the effort as a multi-year push to keep water safe and service reliable while systematically replacing aging infrastructure. How much individual households end up paying will hinge on which rate scenario the city adopts, the outcome of the Proposition 218 process and any grants or other outside funding the city manages to land.
