On July 1, 2026, Hillsborough stopped charging more per unit of water as a household used more. For years the Town billed residents in four rising tiers. The first 22 units of each bi-monthly bill cost $7.59 apiece, and every unit past 78 cost $20.96. Now every unit costs the same $11.42. The fixed charge for the smallest residential meter also rose by about half. Meanwhile the fixed charges for 3-inch and larger meters went down.
If you're comparing Hillsborough properties, water used to be a cost that grew steeply with lot size and irrigation. Under the new schedule it grows far more slowly. A smaller home on a modest meter now carries a higher water baseline than it did a year ago. A large, heavily irrigated estate on a big meter may carry a lower one.
The four tiers, and what replaced them
A unit here is 100 cubic feet, about 748 gallons. The Prop 218 notice the Town mailed before its June hearing set the old and new schedules side by side.
| Bi-monthly usage | Price per unit before July 1, 2026 | Price per unit from July 1, 2026 |
|---|---|---|
| 0 to 22 units | $7.59 | $11.42 |
| 23 to 44 units | $9.91 | $11.42 |
| 45 to 78 units | $15.63 | $11.42 |
| 79 units and up | $20.96 | $11.42 |
The fixed charge moved too, and it moved in opposite directions depending on meter size. The bi-monthly service charge for a 3/4-inch meter went from $161.18 to $240.82. For a 1-inch meter it went from $190.70 to $262.53. The 3-inch charge fell from $581.83 to $550.21, and the 8-inch charge fell from $2,471.07 to $1,939.76. Monthly, the 3/4-inch charge went from $80.59 to $120.41 before a single gallon is used.
Put the two changes together and the effect is lopsided. Low and moderate users pay more on both lines of the bill. The heaviest users pay less for every unit past the old third tier, and the largest meters also pay a smaller fixed charge.
Three bills, worked out
These examples use the Town's noticed rates for fiscal year 2026-27. The council adopted those figures as maximum rates. Under the cost-of-service report, the council can bill less than the maximum if circumstances change.
- A 3/4-inch meter using 20 units per bi-monthly bill. Before July, the bill came to $312.98. Now it comes to $469.22, an increase of $156.24.
- The same meter using 45 units. The bill went from $561.81 to $754.72, an increase of $192.91.
- The same meter using 84 units. The bill went from $1,203.36 to $1,200.10, about even.
So for a 3/4-inch account, the break-even sits near 84 units every two months. Below that, the new schedule costs more. Above it, every extra unit costs $11.42 instead of $20.96, so savings grow with each unit. On a 2-inch meter using 150 units, the same arithmetic gives a bill of about $2,771 under the old tiers and about $2,090 under the new schedule. That's a drop of roughly $680 per bill.
The Town's FAQ gives a broader view. It looked at fiscal year 2024-25 residential bills and found that about 87% of bills would go up. The average increase was $49.30 per bi-monthly bill, and the largest was $497. The FAQ also says customers using 44 units or fewer will see an increase and those using 45 or more will "generally" see a decrease. Read that as a pattern across all accounts, not a break-even for any one household. As the second example shows, a 3/4-inch account at 45 units still pays almost $193 more. The 44-unit line is simply where the old third tier began.
Why the Town priced it this way
The Town buys all its water from the San Francisco Public Utilities Commission. In the fiscal 2026-27 budget, purchased water accounts for $7,611,825 of a $20,468,318 revenue requirement. The cost-of-service report, prepared by HF&H Consultants, calls SFPUC water the Town's single largest cost. The notice budgets for a 23% increase in wholesale water costs over the next five years. It projects the SFPUC wholesale price rising from $6.23 per unit in 2026 to $7.38 in 2030.
Most of the rest pays for keeping water moving across hilly ground. The system has 108 miles of water mains, 18 tanks, 14 pump stations and 19 separate but connected pressure zones. It serves about 4,270 customers, nearly all of them single-family homes. The FAQ notes that Hillsborough lots are more than twice the size of lots in neighboring communities. More pipe per household means a higher cost of service shared among fewer customers. Those costs are fixed whether a household waters a lawn or not. A larger fixed charge on every meter is how the new schedule collects them.
The Town also funds $14.6 million in capital projects over the five years. One example is the 2026 Bowhill Water Main Project. It replaces about 450 feet of 6-inch pipe and includes four service connections, a fire hydrant and a blow-off valve. The pre-bid site visit was at 785 Bowhill Road, and bids opened July 15, 2026.
The structure has a legal side as well. The study says it built the rates to comply with Article XIII D, Section 6 of the California Constitution, the Prop 218 rule. That rule ties each customer's charges to the proportional cost of serving them. California courts have read that rule strictly. In the Capistrano decision, the Court of Appeal held that tiered rates must match the actual cost of service at each usage level. Town documents don't name that case as the reason for dropping tiers. The council's April 13, 2026 agenda does record a threat of litigation over a possible two-tier structure. By the June 22 hearing, the Town had received 23 valid written protests. Stopping the rates would have taken 2,067.
What this changes when you compare properties
Before July, water cost climbed sharply with irrigated acreage, so a buyer could reasonably treat it as an estate cost. The new schedule makes that much less true. Low and moderate use carries a higher fixed and per-unit cost, while the top end got cheaper per unit. Two homes that look far apart on paper are now closer together on the water bill.
Meter size now matters more. It sets the fixed charge, and that charge goes up every July through 2030. For a 3/4-inch meter it reaches $292.72 per bi-monthly bill by July 2030. The uniform per-unit rate climbs on the same schedule, from $11.42 to $13.88 by fiscal 2030-31. Recent water bills show a property's meter size and real usage. Bills from before July 2026 were priced under the old tiers, so they understate the current cost for lower-use homes. For very high-use homes, they may overstate it.
Two more provisions can move the per-unit price between scheduled increases. If SFPUC's actual wholesale rate lands above or below the projection, the Town can pass the difference through, capped at 20% a year and with at least 30 days' written notice. During a declared water shortage, the council can also apply revenue stabilization factors. At the most severe stage, those factors would raise the fiscal 2026-27 rate from $11.42 to as much as $16.66 per unit.
If you're also looking just across the border, Burlingame's published rate sheet, dated January 1, 2024, still uses tiered pricing for qualifying single-family homes on R1 parcels. It lists an $84.03 bi-monthly fixed charge for a 3/4-inch meter. That may not last. On September 29, 2026, Burlingame released a request for proposals for a new water and sewer rate study, with proposals due October 27, 2026.
FAQ
Does Hillsborough still have any water tiers?
No, not for regular billing. The adopted structure has a single customer class, a fixed service charge based on meter size, and one uniform per-unit charge for everyone. The per-unit charge still goes up each July on the adopted schedule, from $11.42 to $13.88 by fiscal 2030-31, and can also move through the shortage factors or the SFPUC pass-through described above.
Are the rates in this post what the Town is billing right now?
They are the fiscal 2026-27 rates in the Prop 218 notice, which the council adopted on June 22, 2026, as maximum rates. The Town says the increases began July 1, 2026. The Town's residential water bill calculator compares the old and new rates for a specific usage level.
Where can I read the full study?
The Town posts the 2026 Water Cost of Service Report, dated April 18, 2026, and the Prop 218 notice with every rate table.
When you're comparing Hillsborough homes, recurring costs like water belong in the same conversation as price and condition. Comaroto Properties can help you collect a property's recent bills and meter details and read them against the 2026 schedule before you make an offer. Request a personalized consultation to go through the properties on your list.
