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About Water and Sewer Rates

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 According to the 2020 Community Survey, providing safe drinking water and sewer services is a top priority for residents.

Monthly utility bills are the sole source of revenue to support Westminster’s water and wastewater system. Rates determine what is charged on those utility bills based mostly on how much water a household uses. The majority of revenue collected through utility bills goes toward projects that repair infrastructure and staff to operate the system.

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Taxes are not used to provide water and sewer services and rates are set to fairly charge a customer based on their impacts on the system.

Background on Westminster's Rates

In June 2020, the city approved a 0% rate adjustment for 2021 in response to customers impacted by the COVID-19 pandemic. This was made possible by the city responding to lower interest rates, saving $3.6 million by refinancing existing debt. These savings, allowed the city to fund necessary repair and replacement projects in 2021 without a rate increase.

Prior to 2021, the city raised water and sewer rates an average of 4.8% each year since 2000 with more substantial rate increases coming in 2019 and 2020. In addition to covering additional costs due to inflation, which has increased 1 – 4% each year since 2000, the main driver for rate increases has been the need to invest more in replacing and repairing the city’s existing infrastructure.

Aging water and sewer infrastructure is the largest challenge facing Westminster's water and sewer system. A large portion of Westminster’s infrastructure was built in the late 1970s and early 1980s during a period of significant growth in the city. All of this infrastructure is now close to 50 years old and needs to be replaced. Studies have shown that we’ve used up half the useful life of our water and sewer infrastructure and 25% of the total infrastructure is already at or beyond its designed life.

Aging infrastructure and increasing water rates are a challenge across the country. The American Society of Civil Engineers grades Colorado’s drinking water and wastewater infrastructure at C-. Nationwide, drinking water and wastewater infrastructure is graded D and D+, respectively.

To continue delivering safe and reliable drinking water, the city has increased its investment in construction projects that repair and replace our existing infrastructure.

In addition to increasing its investment in infrastructure, the city also began implementing a series of policies in 2019 to ensure that rates were fair and equitable.

These policies include:

  1. Align residential and commercial rates to their cost of service over eight years.
  2. Adjust the water use tiers to increase affordability and to charge high water use customers for their share of impacts to the system.
  3. Simplify commercial water use tiers and implement a surcharge to commercial customers for overuse.
  4. Enhance fixed water revenues to provide more consistent revenue not dependent on weather fluctuations.
  5. Maintain a single sewer rate.
  6. Implement a 2,000-gallon monthly minimum “readiness to serve” wastewater charge.

Most notably, these policies adjusted the residential Tier 1 rate category from 0 – 4,000 gallons to 0 – 6,000 gallons. This change ensured that indoor water use remained affordable for more customers. Secondly, these policies adjusted the residential Tier 3 rate by about 50% from 2018 to 2019 to encourage conservation and charge users fairly according to their impact on the system. The city’s water pipes and treatment facilities have to be sized to meet the highest demand, typically in July. Customers that use more water for irrigation during the summer months impact the system more.

After hearing concerns from the community about water rates in 2020, Westminster’s City Council embarked on a series of five water rate workshops from October 2020 through January 2021. These workshops were designed to review every aspect of water rates including infrastructure needs and financial policy and work toward setting rates for 2022.

The challenge: aging infrastructure

Aging water and sewer infrastructure is the largest challenge facing Westminster's water and sewer system. Investing today prevents the even higher cost of failure.

A large portion of Westminster’s infrastructure was built in the late 1970s and early 1980s during a period of significant growth in the city. All of this infrastructure is now close to 50 years old and needs to be replaced.

Studies have shown that we’ve used up half the useful life of our water and sewer infrastructure and 25% of the total infrastructure is already at or beyond its designed life.

Failure to invest more in the city’s existing infrastructure today will lead to service interruptions, sewer backups and possible impacts to water quality such as boil water advisories. Not to mention emergency repairs that are up to eight times more expensive than planned projects.

Aging infrastructure and increasing water rates are a challenge across the country. The American Society of Civil Engineers grades Colorado’s drinking water and wastewater infrastructure at C-. Nationwide, drinking water and wastewater infrastructure is graded D and D+, respectively.

Over the last ten years, the city averaged about $30 million a year in water and sewer construction projects. Based on comprehensive engineering studies, staff recommends increasing the city’s investment in repairing or replacing its existing infrastructure. The city’s Long Term Planning process systematically identifies the right projects at the right time to invest ratepayers’ funds as efficiently as possible. 

 


Programs To Help You Manage Your Bill

The city offers several programs to help interested customers use less water and manage their bill, including a new assistance program for residents financially impacted by COVID-19. Water bill assistance programs also offer income-qualified customers a $15 per month credit toward their utility bill, free replacement of old toilets and no-cost leak repairs.  The city also offers several water conservation programs to help residents use less water outdoors, including a new Grass to Garden program.

Water bill assistance

Frequently Asked Questions

Can I get assistance paying my water bill?
The city offers a Water Bill Assistance Program for income-qualifying residents including: a Low-Income Program, Hardship Program and Repair Program. 

What can I do to reduce the amount of water I pay for on my water bill?

  • Replace your toilets with the most water efficient “WaterSense” labeled toilets. They don’t cost any more money and could reduce your toilet’s use by 20 percent or more on each flush. Your toilet is the largest water user in your home, so there are big savings to achieve!
  • Check out the Water Conservation webpage, which offers free sprinkler consultations and Garden In A Box discounts.
  • Transform your lawn into a water-smart landscape; replace thirsty grass with low-water turf, plants, trees and shrubs. 
  • Recycle the rain; use rain barrels to collect precipitation and reuse it outdoors.

Who makes the decision to set rates?
City Council normally votes on water and sewer rates every two years. Due to the unprecedented COVID-19 pandemic, City Council approved a 0% rate increase for 2021 and is considering another one year rate recommendation for 2022. 

How does the city know that its rates are fair and equitable?
Following industry best practices, the city periodically reviews how it sets rates to cover the costs of providing service. The city conducted a Rate and Fee Cost of Service Study in 2018 to determine the amount of rate revenues that must be recovered from each customer class. 

When will the rate proposal go into effect?
Current rates will remain the same in 2021 under the current proposal. 

Are tiered rates for water new to Westminster?
The city has been charging tiered, increasing block rates since 1975. At that time there were three tiers implemented. There were also different tiers and rates in the summer and winter seasons. All the tiers cost more the more a customer would use. In 1993, the city got rid of the winter/summer split and went to year round tiers and rates. 

What does the Westminster Home Rule Charter require?
Charter section 14.4 authorizes City Council to fix rates for public utility services.  Rates shall not be discriminatory within any classification of users. 

Charter section 14.6 requires that utility rates be fixed so as to at least meet all the operating costs of the utility. 

Does the rate proposal provide a profit for the utility?
No. The rate proposal is designed to meet the operating costs of the utility, so that the utility breaks even. 

Why can City Council raise my water and sewer rates without putting the increases on the ballot every time? Isn’t this a tax?
The city’s water, sewer and stormwater utilities are considered as an Enterprise. City Council adopted an ordinance in 1994 establishing the water and sewer utility, and in 2015, amended and restated the ordinance to include the stormwater utility. A Utility Enterprise receives its funding from the customer charges and fees that are needed to pay for the costs of performing services. Because the utility is an enterprise, and the funding is from fees charged for the services provided to our customers, City Council has the authority to adjust the rates and fees charged by the utility, and to issue debt to fund utility projects. 

Does the city offer waivers or rebates on water or sewer tap fees to developers as a development incentive?
No, the city does not offer any sort of waiver, rebate or reduction for water and sewer tap fees. Our staff specifically calculates the tap fees for every new development to ensure that development is paying for its fair share of access to the city’s water and sewer infrastructure, and for access to the city’s water supply. Once a tap fee is paid, that new property pays water and sewer rates just like all other customers. For redevelopment projects, credits for tap fees previously paid are part of the calculation, but tap fees are not waived or otherwise reduced; they are essential to ensure growth helps pay for growth.

Can the city’s General Fund (sales tax money) be used to help reduce my water and sewer bills?
Because the utility is considered an Enterprise, City Council can adopt the rates and fees needed to fund these services. While City Council has the legal authority to subsidize the Utility Fund with the General Fund up to a certain amount, staff believes the financial management of the city is best served when rate payers directly fund the services they receive. In addition, the General Fund has its own infrastructure needs, and the use of the General Fund to offset Utility Fund needs would limit the resources to address those needs.

What specific rates may change on my bill?
Water and sewer rates and the fixed meter service fee. Tap fees are paid by developers, and for new or expanded construction only.

What if I live in an HOA? How do the rates affect me?
Homeowners Association residents pay a different water rate than single-family detached residential. This is based on a few factors, including type of building and the infrastructure required to serve the building(s), which is also different than single-family. 

How do you calculate sewer usage?
Since we don’t have sewer meters, the amount we charge our customers for wastewater service is calculated based on the water you use in the winter months of December, January and February. That is our best gauge of how our customers are using water indoors, since there is typically little outdoor water use happening in the winter months. 

The city has built and maintained a wastewater system that stands ready to serve all city customers at any time. While the average single-family residential customer uses 4,000 gallons of water in the winter time, some customers have little or no water use in these months. Staff recognizes that even though some customers may be gone from their homes during a portion of the year, and others may use very little indoor water in the winter, the city must operate the wastewater system to provide that service at any time.

To ensure that each customer pays an appropriate amount to keep the sewer system ready to provide service, all customers, both residential and commercial, pay a minimum monthly 'readiness to serve' charge that is set at an amount equivalent to a 2,000 gallon monthly charge. With water revenues, all customers pay a fixed fee to cover the operation of the water system, regardless of water use. In the wastewater system, a minimum charge provides a similar level of equity.

Why does Westminster use tiered rates?

Tiered rates are an established method of recovering costs to the city’s system caused by users of all usage levels, and they have been used in Westminster for more than 40 years. 

Westminster is an irrigation-season peaking utility. The water plants are sized to meet the water demand on the highest water use day in the year, generally that day is in the first half of July when about 1/3 of the demand is indoor and 2/3 is outdoor irrigation. During most of the year, that plant capacity is not required to meet demand. If there was no outdoor irrigation, the city’s plants would only need to be 1/3 of the size that they were built. The more irrigation you use, the bigger the plants, water storage and pipes Westminster had to build to meet demands and greater level of service to equipment such as pumps, motors, valves and controls. 

How will two family units with one water meter be handled?
Duplexes using one water meter will have water allotment for two houses. For example, Tier 1 rates are up to 6,000 gallons for a single house, but for a duplex Tier 1 rates are up to 12,000 gallons. Tier 2 rate are up to 20,000 gallons for a single house (40,000 for a duplex) and Tier 3 rates are 21,000 gallons and over for a single house (42,000 and over for a duplex).

Why does the city charge more for irrigation water? Why does the City charge more for Tier 2 and Tier 3? Doesn’t water cost the same no matter how much I use?
The city charges more for outdoor watering (Tiers 2 and 3) for a few reasons. 

  • Outdoor water is discretionary water. While we all like having healthy landscaping in our yard, our highest priority water is the water we use to cook and clean. 
  • It costs us more to produce water in the summer for outdoor watering. You might think that it costs the same to provide you water no matter how you use it, but when we have to produce more water for everyone who’s watering their landscaping, and usually all at the same time, we need to have enough treatment plant capacity, storage and pipelines in place to get that water to you when you want it. Most of our water use is by our residents, so our utility system is built to accommodate that use. In this way, the costs for the higher water use are paid by those who are using it. Said another way, having 3 tiers of water-use pricing ensures that the costs for higher water use (e.g., the water use in Tiers 2 and 3) are not paid by those who are not using it. 
  • We also want our customers to value our water resources, and conservation pricing (aka tiered water pricing) helps us to send that message. 

What do my rates pay for?
As our city’s utility system ages, more and more repairs and replacements are required. Westminster experiences some of the same increases in costs that homeowners do. Maintaining aging systems is expensive, though Westminster is able to do it and keep water and sewer rates at about average for the region. View this video for more details.

How will my water and sewer bill be used in 2020?
A large portion of your water bill (56%) goes toward replacing and repairing Westminster’s aging water and wastewater infrastructure. Personnel expenses, including both salaries and benefits, are significant (17%) because it takes about 130 employees to operate Westminster’s water and wastewater systems 24 hours a day, 7 days a week.

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What does the Meter Service Charge on my bill pay for?
The city’s entire water supply infrastructure system (from water storage to treatment plants, and from pumps to pipes) must be ready to provide clean, safe, drinking water at any moment of any day. This fixed monthly charge pays for that “readiness to serve” ability for the utility, ensuring that water reliably comes out of that tap whenever you need it.

What does the Stormwater Management Fee on my bill pay for?
This fee covers the entire range of services for a stormwater utility: maintenance, engineering and construction, environmental compliance, flood control, facility inspections, cleaning up and issuing fines for illegal dumping, and overseeing construction sites. This fee also pays for the city’s free hazardous household waste pick-up program and for the street sweeping program.  

What does the Infrastructure Fee on my bill pay for? 
This fee pays for a portion of the city’s concrete and street light costs.

I heard that the city has $100 million in the bank that they aren't using, is that true?
This money is entirely committed to (1) ongoing capital improvement projects to repair major infrastructure like pump stations and storage tanks, (2) a rate reserve to reduce the need to raise rates during a rainy year or economic recession when people use less water, (3) a capital improvement reserve to fund emergency projects that are necessary but not planned in the budget, (4) reserves for existing agreements and bond covenants and (5) outstanding bills and expenses that must be paid.

According to a financial “snap shot” as of December 31, 2019, the city’s utility fund had just under $103,000,000 in assets with the majority of this money committed to projects and reserve funds including:

  • $48 million for ongoing capital improvement projects already approved to repair or replace existing infrastructure.
  • $17.7 million for a rate reserve
  • $21.5 million for a capital improvement reserve, and an additional $9.6 million was added to the capital reserve
  • The remaining $6.2 million was needed to pay outstanding bills at the time.

You can investigate this information further in the city’s Comprehensive Annual Financial Report.

Can the city’s General Fund (sales tax money) be used to help reduce my water and sewer bills? 

Because the utility is considered an Enterprise, City Council can adopt the rates and fees needed to fund these services. While City Council has the legal authority to subsidize the Utility Fund with the General Fund up to a certain amount, staff believes the financial management of the city is best served when rate payers directly fund the services they receive. In addition, the General Fund has its own infrastructure needs, and the use of the General Fund to offset Utility Fund needs would limit the resources to address those needs.