Understanding Water Budgets

Since 2007, Boulder has used water budgets – an approach also used by other cities across in the U.S. – to allocate how much water homes and businesses should reasonably use in a given month. The amount of water in each customer’s water budget is based on factors like customer type, property characteristics and, in some cases, past water use.

Water budgets play a role in determining how much customers pay for water. Customers who stay within their water budget pay lower rates, while those who use more than their budget pay higher rates. This tiered approach is designed to encourage efficient water use while still allowing flexibility for different needs. Affordability for customers is always top of mind, and an upcoming rate study will take a deep dive into how any policy changes impact customer’s bills.

Every water bill is based on water meter measurements of indoor and outdoor water use. Every meter has an associated water budget that indicates the amount of total water use allocated to each meter. For example:

• Single Family Residential | Individual meters that measure indoor and outdoor water use in homes designed for one household, like detached houses, duplexes or townhomes.
• Multi-Family Residential | Shared meters that measure indoor use in buildings with multiple households, like apartments, condominiums and manufactured home communities.
• Commercial, Industrial and Institutional | Shared meters that measure indoor use by non-residential customers like businesses, offices, restaurants, schools, hospitals and other organizations.
• Metered Irrigation | Shared meters that measure outdoor use on properties with shared indoor meters (Multi-Family Residential and Commercial, Industrial and Institutional).

Because water meters measure water that is used in different ways, water budgets are customized to meet each customer’s use type and property characteristics. Customers can use more or less than their allotted water budget amount, and that impacts how much they pay for water.

Since water budgets were first adopted nearly two decades ago, community values, water use patterns and operational needs have evolved. To ensure billing methods continue to support conservation, equity and clarity, the city began reviewing whether the current water budget policy still works well for customers today, or whether improvement is needed.

In fall 2025, city staff invited the community to share feedback about their experiences with water budgets and ideas for improvement. Approximately 1,000 people responded to a public questionnaire. Staff also gathered input from the Water Resources Advisory Board, Community Connectors in Residence and large water users through a dedicated stakeholder workshop.

This broad engagement helped the city hear from a wide range of voices and better understand how water budgets are working in practice.

Single Family Residential Customers

Overall, respondents reported a strong understanding of water budgets and how they affect their bills. 87% of respondents said they understand water budgets at least somewhat well, with 61% reporting they understand them very well. Similarly, 85% said the relationship between their water budget and their bill is at least somewhat easy to understand.

Respondents consistently expressed support for a conservation-based pricing structure. Many value the ability to save money by using less water and support higher costs for customers who exceed their budgets. However, there is some shared confusion or frustration about monthly fixed service fees, which are separate from water budgets.

Clarity was a recurring theme. Respondents want water bills with clear, easy-to-understand line items. Opinions were split between those who prefer a simple billing structure and those who value a more tailored approach that reflects individual household needs.

Commercial, Industrial, Institutional and Multi-Family Residential Customers

For larger and more complex water users, predictability was a top priority. Respondents emphasized the importance of having water bills they can reliably plan for year to year. Additionally, these customers reported that water budgets don’t work as intended in practice, and that they want a billing structure more applicable to how their specific operations actually use water.

Many respondents said they are unsure what type of water budget currently applies to them or how their budget is calculated. They expressed a desire for more transparency, clearer explanations and better access to information about water budgets.

These customers also highlighted the need for additional tools and flexibility, like multiple ways to access bills, the ability to add multiple contacts for bill notifications and resources to support leak detection and water conservation.

Community feedback is directly informing how the city approaches potential changes. Based on what was heard, staff are recommending that water budgets continue for Single Family Residential and Metered Irrigation accounts with minor adjustments. For other accounts, staff will explore multiple options in an upcoming rate study, including keeping the current system to adopting a simpler rate system based on meter size. Throughout this next phase, the city will prioritize affordability considerations for customers and ensure that rates are sustainable for both utility operations and for the community.

The city met with community members in multiple ways, including: the What's Up Boulder event, a community questionnaire, Water Resources Advisory Board Meetings, a Large Water Users Workshop and meetings with Community-Connectors- in-Residence.

Beginning in spring 2026, the city will use what we heard from the community to shape proposed water budget policy recommendations as part of a broader utilities rate study. This study will review water, wastewater and stormwater rate structures with the goal of ensuring rates are fair, transparent and reflect the true cost of providing reliable service. The rate study will also look at how any policy changes impact customer’s bills, with a focus on affordability.

Community input will continue to play an important role as this work moves forward. Thank you to everyone who shared their experiences and perspectives — your feedback helps guide how Boulder supports water conservation now and into the future. Stay tuned for future engagement opportunities.

If you have questions, please email utilitycharges@bouldercolorado.gov.