Investing in Downey’s Water Future

The City of Downey owns and operates its own water system that serves over 23,000 customers. The system includes 19 groundwater wells, 3 imported water connections, 264 miles of potable and recycled water pipeline, 23,500 water meters, 5,800 isolation valves and 1,800 fire hydrants.

Local control lets us make repairs faster, deliver more reliable service, and guarantees that decisions are made by people who live and work in our community. The City’s in-house team is responsible for maintaining and delivering safe drinking water to every customer.

Reliability and safety are critical elements of the City’s water services. Delivering clean water requires constant care, expert management, and regular upgrades to prepare for everything from main breaks to climate events. Most of the maintenance happens away from public view but goes on around-the-clock.

Your water bill isn’t just paying for water; it’s an investment in a system that supports your health, comfort, and quality of life. Downey has a strong record of providing clean water, meeting all state and federal standards, but, like most water providers, the infrastructure is aging and new more stringent – and costly – regulations for water quality need to be met.

Downey has not raised its water rates since 2015. Over the past decade, the cost of providing service has grown significantly due to inflation, aging infrastructure, and new state and federal water quality regulations, especially requirements to address man-made chemicals called per- and polyfluoroalkyl substances (PFAS). The proposed increase will fund essential projects that keep our water system safe and reliable while addressing future financial sustainability.

A typical single-family household uses about 9,000 gallons of water each month. For the average household, the proposed rates would increase the monthly bill by $14.91 starting January 14, 2026. Since the City bills customers every two months (bi-monthly), the increase per water bill will be approximately $29.82. Smaller adjustments can be expected every year through 2030.

Downey’s last water rate increase took effect on July 1, 2015. Since then, costs for materials, power, labor, and construction have increased by more than 45%. The City did not increase rates for as long as possible, maintaining the lowest water rates in the region, but continued underfunding would threaten reliability and regulatory compliance. Even with the proposed increase, Downey residents will continue to pay a lower water rate than those in neighboring communities.

Key cost drivers for the next five years include:

• PFAS treatment investments exceeding $127 million to meet new federal and state water quality standards.

• Approximately $29 million in essential capital upgrades to address aging pipelines, wells, and pumps that have reached the end of their useful lives.

• Installation of electric generators to keep water flowing during blackouts.

• Inflation and higher energy, material, and construction costs.

• Regulatory requirements for system resiliency, emergency backup power, and responsible reserve funding.

Revenue from the new rates will support:

• Construction of PFAS treatment facilities.

• Replacement of aging water mains, wells, and pumps.

• Upgrades to system monitoring, emergency backup power for wells, and storage.

• Building financial reserves required by the State Revolving Fund (SRF) loan program.

No. By law, the City can only charge customers the cost of providing service, and water utility revenues cannot be used to fund other City services or projects.

The rates are based on a professional cost-of-service analysis. The rates are based on the City’s projected costs to serve each type of customer. The process ensures fairness so that every customer pays only their proportional share of service costs. Detailed information is available in the Rate Study Report.

A rate study evaluates operating expenses, capital improvement needs, reserve targets, and funding sources over multiple years. A cost-of-service analysis then determines how those total costs should be fairly distributed among customer classes (residential, commercial, industrial, etc.), based on the costs each class places on the system.

The study was completed by Raftelis, an independent consulting firm that specializes in financial planning and rate setting for water and wastewater utilities. The process was reviewed by City staff and legal counsel to ensure accuracy and compliance with state law.

New PFAS limits will be enforced soon, and the City needs to comply. The PFAS treatment plant will support compliance with new regulations.

The City needs to plan for design of the plant now, which will cost about $10 million. Construction is planned to start in 2028 and will cost even more.

The City engaged a third party to evaluate Downey’s water system and provide recommendations to help the City plan and budget for improvements to address PFAS compliance.

The City has discussed this project with the State Revolving Fund and plans to get a loan. The loan covers “shovel ready” projects. Shovel ready means the design drawings have been completed. The State also requires a debt service reserve as part of its loan covenant. These reserves were accounted for during the rate study and played a role in the recommended rate increases.

The City is pursuing a State Revolving Fund (SRF) loan to help finance PFAS treatment facilities, but most of the water system’s funding comes directly from customer rates.

When it borrows money from the State, the City signs a contract. That contract says the City must keep a certain amount of money in savings and bring in enough money to pay back the loan. Water rates are set to make sure these conditions are followed.

Residents can share feedback by contacting the City by email at WaterRates@downeyca.org.

Under Proposition 218, property owners or customers may submit written protests or objections before or during the public hearing. Instructions and deadlines are provided in the official notice mailed to all customers.

Customers can lower costs by saving water indoors and outdoors, fixing leaks quickly, and following the City’s seasonal watering guidelines. Conservation tips and resources are available on the City’s website and through the City’s water conservation programs.