Diving Into Water - part seven: the new rates
Here's what you will be paying for water in 2024
OK! If you’ve read my last two posts, Diving Into Water - part five: surfin' the system and Diving Into Water - part six: the expenses we are facing you should have a basic idea of some of our water-related issues.
Bottom line, we don’t have enough money to fund commitments to upgrade our water system and increase our supply. In October of 2023 during the 2024 budget presentation, the council was presented with a few options to gain more funding via a rate increase on the customers, that’s you and me.
I’m going to use the city staff’s slides to lay it out. But first, so you can compare…
RATES AS OF JULY 1ST TO DECEMBER 31ST 2023
Most of us have a smaller meter size, if we live in a house we pay a flat rate service charge of $18.80 a month regardless of how much water we use. As you can see in the chart below it’s slightly lower for mobile home and apartment dwellers.
As you know with our waste removal process the city encourages us to throw out the least amount of trash by charging us less for the smaller trash barrel. The same applies to water. The more you use the higher the cost.
There are a series of five tiers, as we use more water the cost per 1000 gallons increases. You can see that in the charts below.
OPTIONS GIVEN TO THE COUNCIL IN OCTOBER 2023 - MORE DEBT?
City staff presented the council with some scenarios regarding the rates. It boiled down to do you want to go with a smaller increase which would require the city to take on debt. You can see that here. With an 8% increase, there would be an additional $25 million in debt repayment in the future. With a 21% increase there would be no need to take on debt.
WHERE WE NEED TO BE
Here’s an illustration of what would happen if rates were raised a whopping 45% in 2024, front loaded as the staff called it, followed by small increases each year. The gray area is the revenue that we need over the next 10 years. The orange line is the revenue path.
PICK YOUR PATH
Council was given this chart showing a variety of rate increases and what the additional costs would be if debt was added. The smaller the rate increase the higher the cost in the long run.
STAFF’S RECOMMENDATION
This is the path the council selected. They did not want to take on that additional debt and opted to break the increase into two years instead of one.
2024 RATES - STARTING ON YOUR JANUARY BILL WHICH ARRIVES IN FEBRUARY
An increase in the service charge of $3.95 a month as well as increases in the cost of water in each tier.
WATER BILL ASSISTANCE PROGRAM
Council approved this program at their January 1st meeting. If you qualify you will receive a $7.50 monthly credit on your water bill for a year.
From the staff memo:
“Assistance for older adults (62 years or older) and people on fixed incomes. Initial eligibility will be set at 80% of area median income which is consistent with income qualification requirements used by Energy Outreach Colorado for gas and electric bill assistance. Eligibility could be expanded in the future as staff analyze usage data.”
Here’s an area median income (AMI) chart for 2023 that will give you an idea about eligibility.
Do you know if they are assuming water use will stay the same for homeowners even with the higher charges? As an HOA that pays the highest tier for water, we are using significantly less water now than we have in the past, and as water rates continue to climb, we will absolutely not raise dues 21% (realistically, our water budget is half of our budget, so we'd have to raise dues 11% this year and 10% next year) to keep pace with the city. Instead, we will make hard decisions as to what to water and even allow areas to die before raising dues that much.
I believe individual households, too, will lower water consumption rather than blindly pay for these increases, which will mean that by raising rates, all the city is doing is keeping their income the same on water, which will still not pay off those debts.
Also, if we have another rainy spring this year as we did last year, the city's income from water will be decreased even more.
I'm curious if those charts take into account the lesser water use that will be driven by these huge water rate increases.