Budget-Based Water Rates

About Your Water System

The City of Chino Hills provides water and waste water services to over 24,000 households across our 45-square mile service area. Ensuring that our customers have a water supply that is safe, reliable and affordable takes a complex production and delivery system. Maintaining the integrity of the distribution system and storage facilities ensures a dependable, adequate means of providing water service to our residents.  Providing your water service also takes a highly trained staff devoted to quality and dependability.  

Infrastructure At-A-Glance   

6 wells21,600 connections
19 pump and hydropneumatic stations19 reservoirs
44 million Gallons - Storage Capacity307 miles of water lines

Sources of Water 

The City’s water supply portfolio consists of four main sources: 

  • Chino Basin Desalter Authority Purchased Water
  • Monte Vista Water District Purchased Water
  • Water Facilities Authority Purchased Water 
  • City Wells and Monte Vista Water District Pumping the City’s Basin Allotment

Water Rate Study

The Water and Recycled Water Rate Study Report (PDF) for the City of Chino Hills was completed to develop domestic water and recycled water rates with a technically sound methodology which meets the requirements of California Constitution Article XIII D, Section 6 (commonly referred to as “Proposition 218”).  In particular, this Study contains thorough details on the following: 

The legal framework surrounding Proposition 218, particularly with respect to domestic (potable) and recycled water being provided by the same agency.

  • Proposed Water Budget tier definitions. 
  • Equitable cost of service-based domestic (potable) and recycled water commodity rates, elevation charges, and monthly fixed charges that meet Proposition 218 requirements.

The study summarizes the key findings and results related to the implementation of a residential water budget rate structure, development of monthly fixed charges, and commodity and elevation charges for both domestic and recycled water.

How are budget-based water rates calculated?  

Water conservation has become a permanent way of life in California!  The State of California has encouraged water suppliers to adopt budget-based water rates in place of the traditional tiered water rates.  Many California water agencies have implemented budget-based water rates that encourage Californians to use water efficiently while ensuring fiscal stability for the water system.

A Tiered Rate Structure

Budget-based rates take into consideration water-efficiency targets set by the State of California for indoor and outdoor water use, lot size, and weather conditions.  

Buckets Graphic illustrating the 3 Tiers of Budget-based Water Rates

  • Tier 1, the “indoor budget,” is based on the State’s determination that a water-efficient household uses 55 gallons per person, per day; and assumes four persons per household.  
  • Tier 2, the “outdoor budget,” assumes that 1/3 of the property is landscaped.  This tier adjusts based on historical weather conditions.  Users are allocated more outdoor water during historically hot months, and less outdoor water during historically cooler months.  
  • Tier 3 is high water use that exceeds the flexible Tier 2 allocation.  

The basic premise of budget-based water rates is that everyone is expected to use water efficiently, and those who meet efficiency targets are rewarded with lower costs for water. The lowest priced water is in the first two tiers, for indoor and outdoor use, while the rates in the third tier reflect inefficient use and higher-priced water. The tier rates are consistent with the costs the City is charged for the water. While the tiers are set to reflect efficient indoor and outdoor water use, the water system does not actually have a tool to track where the customer uses their water. In fact, efficient water customers may be able to meet most of their water needs within the Tier 1 allocation.

Did you know we can only charge for the costs associated with providing and maintaining water service?  

As a public water provider, the City of Chino Hills can only charge its customers for the costs associated with providing water service.  The City cannot earn a profit, and can only pass along the costs associated with providing and maintaining the service.  Revenues collected through the water rates cannot be used to fund other City services, only the cost of operating and maintaining the water system.  When determining water rates, the City of Chino Hills prioritizes: 

  • Fair treatment of all customers
  • Reflecting the true cost of service
  • Maintaining and protecting the City water system’s financial stability and its ability to provide high-level service
  • Sufficiently covering fixed and commodity (water) costs
  • Encouraging water-use efficiency

When Were Budget-based Water Rates Approved for Chino Hills?

Proposition 218 (approved by voters in 1996) requires the City to give the ratepayers the opportunity to protest a change in rates.  After allowing ratepayers the opportunity to protest a change in water rates, the new budget-based water rates were approved in May of 2018.  The rates were approved after a majority of protest ballots from the total number of properties affected were not returned. A successful protest vote would have required 50%, plus one or 11,095 votes, of the total 28,272 properties. Only 6,512 protest forms were returned. 

When Will My Water Rates Increase?

When the budget-based water rates were approved in May of 2018 after the Proposition 218 process, rate increases were scheduled to take effect on July 1st each year over the next five years.  A Financial and Rate Study was conducted to determine the cost of providing service, which is the basis for the rates.