Water rates are increasing in July for San Jose residents in several neighborhoods. This week, the City Council unanimously approved increasing drinking and recycled water rates for the next fiscal year. The increase impacts customers of San Jose Municipal Water System, which serves about 136,000 residents in the North San Jose, Alviso, Evergreen, Edenvale and Coyote Valley areas. The increases come as the region faces another extended drought and follows last year’s rate hikes from Valley Water, the wholesale water provider for the county. It’s not because more water is being used, in fact water consumption is predicted to trend down …