The contractor popped open the lid of an underground box and slipped a new high-tech water meter into place.

The job, which required little more than a wrench, 10 minutes of time and some elbow grease on a recent drizzly afternoon, seemed easy enough. But it was just one -- and one of the last of -- 7,800 such installations in Rohnert Park over the past five months.

The massive undertaking will enable the city to charge residents for exactly the amount of water they use. For years, they have paid flat rates that were among the lowest in the county.

It also will help Rohnert Park reduce its dependency on well water, which the city must do as part of a long-term strategy to improve its financial health by building more homes.

"The reality is, we have to treat all of our resources as precious," said Mayor Vicki Vidak-Martinez. "And the best way to get water is to conserve it."

Each of the meters includes a tiny radio transmitter that will enable meter-readers to collect data for an entire block by driving down the street in a city vehicle equipped with a special receiver. Contractors have now installed the devices at all but about two dozen households citywide.

The first bills based on water usage will be issued in October for the August-September period. In preparation, the city also will send residents "practice bills" in August for the June-July period, said Public Works Director Bill Stephens.

"It would give them an opportunity to react and turn their irrigation down, if need be," he said.

The new system will promote water conservation by enabling residents to monitor how much water they use, and by punishing or rewarding them accordingly.

Homeowners who conserve water, for example, are expected to see a 44 percent reduction in their combined water and sewer bills, paying $28 less than the current flat rate of $65 a month.

Those who don't conserve will pay 51 percent more, or about $98 a month.

The proposed rates, established by consultant Hilton Farnkopf & Hobson LLC last year, were based on models from Santa Rosa and Petaluma. They are expected to undergo minor adjustments before the City Council finalizes them in May.

In cash-strapped Rohnert Park, conservation is more than an environmentally friendly goal. It's a critical component of the city's long-term financial strategy.

"It's part of a whole package in how we're going to supply water to the city, now and in the future," said Councilman Jake Mackenzie.

About half of the city's water comes from wells that tap the dwindling supply in an underground aquifer. The other half is Russian River water the Sonoma County Water Agency delivers through its aqueduct.

Plagued by budget shortfalls in recent years, the city hopes to increase its tax base through development. The general plan calls for enough new housing to expand the population by 20 percent -- or 10,000 residents -- by 2020.

Growth, however, depends on the availability of water. The shortage of well water has already forced Rohnert Park to abandon plans to annex land southeast of the city limits for a new subdivision.

Last year, Rohnert Park settled a lawsuit by Penngrove residents who accused the city of overtaxing the aquifer that stretches below central Sonoma County. The city agreed to restrict its well water consumption and relinquish its right to annex about 170 acres south of Valley House Drive.

The Water Agency, however, already had told the city that it would not increase its allocation of river water while residential use was un-metered.

"It's very, very clear that for the city of Rohnert Park to develop in the way we had planned and laid out, that we needed to get our house in order in how water was being used in the city and how it was priced," Mackenzie said.

Council members say Rohnert Park eventually will retire its wells altogether, shifting entirely to Russian River water. With its new water meters, the city now has a better chance of achieving that goal.

"We had no choice in this," said Vidak-Martinez of the new meters. "We need the river water. We need to minimize the use of our wells."