Understanding Water Budgets

Since 2007, water budgets have been part of Boulder’s water rate structure. This approach is also used by other cities across in the U.S. to encourage efficient water use. In Boulder, water budgets help determine how much homes and businesses pay for water.

A water budget is the amount of water a customer is expected to use in a given month. The amount is based on factors like customer type, property characteristics and, in some cases, past water use.

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 customers' bills.

Water budgets were adopted nearly two decades ago. Since then, community needs, water-use patterns and operational needs have evolved. The city is reviewing the policy to ensure billing methods still support conservation, equity and clear billing, or whether changes are needed.

In 2025, the city gathered community input through a questionnaire, open houses, the What’s Up Boulder event, Water Resources Advisory Board, Community Connectors in Residence meetings and a large water-user workshop. Nearly 1,000 people completed the questionnaire and the city gathered input at 18 community events.

This broad engagement helped the city understand how water budgets affect different customers, including homeowners, renters, multi-family and manufactured home residents, businesses and other large water users.

Every water meter has a water budget based on the type of customer and how the property uses water:

• 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 may use more or less than their water budget, but their water use affects how much they pay.

Customers want rates and bills that are predictable, easy to understand and continue to encourage water conservation. They also noted that different customers have different levels of control over their water use.

Single-family residential customers

Overall, respondents reported a strong understanding of water budgets and how they affect their bills. Eighty-seven percent understood water budgets at least somewhat well and 85% said the relationship between their water budget and their bill is at least somewhat easy to understand.

Many supported a conservation-based pricing structure but wanted clearer bills and explanations of fixed service fees.

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. Some said current water budgets don’t reflect how their properties use water or were unsure how their budgets were calculated. They asked for clearer information, more flexible billing tools and added support for leak detection and conservation.

The city is conducting a utility rate study to review water, wastewater and stormwater rates. These studies are typically completed every five to 10 years to ensure utility rates remain fair, transparent, and reflect the cost of maintaining safe and reliable operations, replacing and improving aging infrastructure, planning for future community needs and keeping services as affordable as possible for customers.

The rate study follows these steps:

• Review costs: Examine the cost to operate, maintain and replace the utility system.
• Forecast future needs: Estimate repairs, upgrades and anticipated regulatory requirements.
• Determine revenue needs: Identify how much funding is needed to keep services safe and reliable.
• Develop rate options: Design options that reflect the services customers receive and the demands they place on the system.
• Public review and decisions: Share findings, gather feedback and determine next steps for carrying out the approved changes.

What Do Utility Rates Pay For?

Utility rates support the essential services that Boulder residents rely on every day, including:

• Treating and delivering safe drinking water
• Collecting and treating wastewater
• Building and maintaining stormwater and flood protection systems
• Repairing and replacing aging pipes, facilities and infrastructure
• Meeting state and federal water quality regulations
• Responding to emergencies and maintaining reliable services
• Investing in infrastructure to serve the community now and in the future

How feedback is shaping next steps

Community feedback is guiding the options now being considered. Staff are recommending that water budgets continue for single-family residential and metered irrigation accounts, with minor adjustments.

For other accounts, the rate study will explore several options. These range from keeping the current water budget system to using a simpler rate system based on meter size.

The city will prioritize customer affordability, conservation and the long-term needs of the utility system as it compares these options.

Community members will be able to review the options and share their feedback before recommendations are final. Input received through early 2027 will help the city refine its recommendations.

Staff will share an update on the rate study and preliminary direction at the Water Resources Advisory Board meeting on Nov. 9, 2026 at 6 p.m.

Following the meeting, the city will continue gathering feedback and refining possible rate structure changes. The proposal will then move through the public review and decision-making processes.

Current utility rates are expected to remain in place through 2027. Any approved changes will take effect in 2028.