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Commercial Customer FAQ

Why is the city increasing water rates?
Rate changes fund the repair and maintenance of Westminster’s water infrastructure. Every extra dollar spent flows directly back into the community, providing continued access to the fresh tasting, high-quality water we depend on every day. The city is increasing water and sewer rates to repair aging infrastructure and meet cleaner water standards. Reliable pipes, pumps, tanks, chemicals, equipment, replacement parts and treatment plants ensure you keep receiving clean water every day of the year.

Our operating expenses increase every year as our costs such as labor, parts, chemicals and contracts increase. Please see the budgets for 2015/2016 and 2017/2018 budget cycles to get an idea of how our expenses have increased annually.

The Utility also has large projects that are budgeted as a part of the Capital Improvement Program (CIP). These are projects to repair/replace aging infrastructure, and to make improvements to allow for growth, changing regulations, etc. Staff presented a staff report to City Council on April 16, 2018 detailing the needs of the Utility and the associated costs. View the staff report

Staff has presented City Council with a number of other foundational documents (see below) explaining the water/sewer rate and tap fee needs and processes. 
Water and Sewer Rate/Fee Study Update - Dec. 4, 2017                 
Water and Sewer Rate/Fee Study Update – Infrastructure - April 2, 2018             
Utility Infrastructure Overview/Primer for Rate and Fee Recommendations    
Water/Sewer Rate/Fee Study – Tap Fees - April 23, 2018                               
Presentation of Water and Sewer Rate/Fee Study – Tap Fees - May 7, 2018               
Water and Sewer Rate/Fee Study – Rates - May 14, 2018               
Presentation of Water/Sewer Rate and Fee Study – Proposed 2019/2020 Rates - July 16, 2018
Updated Sewer Tap Fees with Metro Wastewater Reclamation District Component – Aug. 13, 2018 
Staff Presentation Regarding Proposed 2019 and 2020 Water and Sewer Rates and Tap Fees – Sept. 10, 2018
First Reading of Councillor’s Bill No. 37 re: 2019 and 2020 Water and Wastewater Rate Recommendations – Sept. 24, 2018
First Reading of Councillor’s Bill No. 38 re: 2019 and 2020 Water and Wastewater Tap Fee Recommendations – Sept. 24, 2018
Second Reading of Councillor’s Bill No. 37 re: 2019 and 2020 Water and Wastewater Rate Recommendations – Oct. 8, 2018
Second Reading of Councillor’s Bill No. 38 re: 2019 and 2020 Water and Wastewater Tap Fee Recommendations– Oct. 8, 2018

       

What will the new rates be?
View a chart for the 2019 and the 2020 rate schedule.

Why is the city changing its water and sewer rates structure?
When a new business connects into the city’s existing water system, they pay a tap fee that is based upon the projected water use of the new business. For example, we can assume that a restaurant uses more water than a similar-sized office building, so the city charges more for a restaurant tap fee than an office tap fee. Each new development owner signs a Service Commitment Agreement that details how much water the business is entitled to each year. The new rate structure links the existing tap fee process to the monthly bills paid by customers. 

For businesses that expand, increase output, or otherwise end up using more water than originally expected, the city must still recoup its cost of providing water service to these customers. The new rate structure provides equity between all commercial customers by basing the tiers on an individualized annual budget.

Customers who exceed their annual budget can purchase additional water resources from the city to ensure all of their water use remains at the Tier 1 rate.

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

What do my rates pay for?
As our city’s utility system ages, more repairs and replacements are required. Maintaining aging systems can be 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.

What kind of projects does the utility do? How does the utility spend the money that it receives from customers?
The Water and Sewer Utility combined have a replacement value of approx. $4 billion. A system of this size and complexity requires significant planning and reinvestment to ensure that we provide you with safe, clean drinking water and reliable wastewater service day in, day out. 

View a list of the utility projects that we’ve included in the last several budget cycles (2011-2018) to provide some context for what those projects are, and what they cost. Over that 8 year period, there was a total of $183.4 million approved for water and wastewater projects, which is an average of about $23 million per year. There was an increase of 2016 project spending due to a $51 million bond issuance, and the increases in 2017 and 2018 were due to the 8 percent and 6 percent rate increases for water and sewer, respectively.  

With a $4 billion total asset value today, the 8-year total represents about a 0.5 percent annual reinvestment rate; or about a 200-year life cycle. 

Please also review the CIP list for 2019 and 2020. This list is in the budget that passed on first reading on Oct. 8. The 2019-2020 adopted Capital Improvement Program (CIP) list includes a water and wastewater project total of $122.8 million for 2019 and $16.1 million for 2020. These amounts include approx. $102 million of debt issuance in 2019.

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.

What does the FOGG Inspection Fee on my bill pay for?
Fats, oils, grease and grit (FOGG) can congeal together, obstructing the flow of wastewater, which can result in sewage backups. Grease traps (small devices at the sink) and grease interceptors (large devices on the exterior of the building) are designed to trap FOGG before reaching the sewer system and must be cleaned regularly. The FOGG Inspection Fee covers the city’s costs to ensure compliance with state regulations, keep FOGG out of sewers and reduce the risk of sewage backups in individual businesses and the city’s wastewater system.

How are sewer rates changing? How do you calculate those amounts, and is that process changing?
Sewer rates will increase in 2019 and 2020. 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. 

To ensure that each customer pays an appropriate amount to keep the sewer system ready to provide service, all customers, both residential and commercial, will 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 will provide a similar level of equity.

Sewer Fee Chart

Sewer Rates

Who makes the decision to increase rates?
City Council had the first reading of the proposed rate increase on Monday, Sept. 24, during their regular meeting. There was a presentation to City Council on the proposal on Sept. 10. View the presentation. This was an opportunity for the public to provide comments and ask questions. 

When will the increase go into effect?
Jan. 1, 2019 and Jan. 1, 2020

Why are you raising our rates if we’re conserving water? I feel like we're being penalized for doing the right thing.
Conservation of water has had a very positive impact on our overall system. Rate increase recommendations to City Council are based on the needs of the overall system, and our number one priority is ensuring that our valuable utility system is ready to serve our customers all day, every day.

We actually heard this question a few years ago, so we did some research to see what our rates would have been if we had never implemented any conservation measures in the city. Here’s what we found. Without conservation, the city would have needed the following:

  • A bigger water treatment plant, at the cost of approx. $130 million.
  • A bigger sewer treatment plant, at the cost of approx. $20 million.
  • The City would had to have purchase more water rights, at the cost of approximately $220 million. 
  • We couldn’t have paid for all of these costs with cash, so we would have issued debt. We estimated the interests costs at approx. $223 million. 

That’s $593 million of work that we would have needed, and which would have been funded from rates and tap fees.

Our residents and businesses have done a tremendous job of conserving water – since 1980, water use has dropped by 21%!  However, we understand the frustration of those making a concerted effort to conserve their water because they are still seeing costs continuing to increase each year due to the hard costs of maintaining the overall system. If the city hadn’t adopted conservation measures, we would have needed more funding from our customers, to the tune of an additional 94 percent of rate increases over the years. Our customers conserving water has helped to not raise rates as much as if they hadn’t conserved water. 

What can I do to reduce the amount of water I pay for on my water bill?
Rigorously evaluate outdoor water use on your property and seek water savings opportunities – like improving irrigation systems and reducing turf areas.
Replace your business’s toilets with the most water efficient “WaterSense” labeled toilets. They don’t cost any more money and could reduce each toilet’s use by 20 percent or more on each flush.

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. 

What is the cost to upgrade the water system?
The Utility Fund Capital Improvement Program (CIP) projects in the proposed 2019/2020 budget were provided to City Council in a post-meeting on Aug 27. View the staff report (a link to the project titles and funding amounts, as well as project descriptions are located at the bottom of the report). The water and wastewater projects on that list are also factored into the 2019/2020 water and sewer rate recommendations that were presented to City Council on Sep 10 for discussion and will be on the City Council agenda again on Sep 24 for a formal vote. There is a CIP project list as part of each 2-year budget to address ongoing project needs for the Utility.  

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.

Did the temporary moratorium the city enacted for development applications cause the water and sewer rate or tap fee increases?
No, the water, sewer and tap fee increases are the result of a year-long study and reflect the demands of operating and investing in a $4 billion infrastructure that is critical to provide safe, high quality, compliant and reliable water and sewer services to customers. Such a study had not been performed since 2006, and it clearly revealed that rates and fees were not keeping pace with infrastructure needs. More information on the moratorium is on the city website.

Is development in Downtown Westminster, Westminster Station or other construction focus areas causing the water, sewer and tap fee increases for 2019 and 2020?
No, the rate increases are primarily driven by the age and condition of our existing utility system, not growth. Our Public Works & Utilities Department has already identified specific infrastructure projects that must be replaced. New growth in Westminster pays its fair share to connect into our excellent water supply and sewer systems. 

Are there planned utility construction projects that have been accelerated due to growth?
Yes, the Big Dry Creek Interceptor Sewer construction funding originally programmed for 2022 and 2023 is proposed to move forward to 2019. It should be noted that this project is predominantly to address known age and condition concerns, but it will simultaneously address some capacity concern within the sewer system.

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.

I received a letter that says I can only use as much water as the amount on my Service Commitment letter/Utility Permit, and if my business uses more, I’ll have to pay more. I didn’t sign that letter, the owner before me signed it. What is it? What does it mean? Why am I being held to an amount of water that I didn’t decide? Don’t I get to use as much water as I want? Why should I pay more?

  • When businesses are constructed in the city, staff works with business owners to carefully calculate the quantity of water needed to serve the building and the business, no more and no less. The city sells that allocation via the tap fee. 
  • We call this quantity a “service commitment,” where each service commitment equals 140,000 gallons of water per year, and the city document that contains this information is either a Service Commitment Agreement or a Utility Permit. A copy of that document was included with your letter. 
  • The amount of water associated with the Service Commitment Agreement or Utility Permit remains with the utility billing account and parcel despite change in ownership. 
  • Every allocation of water is carefully calculated, monitored and forecasted by the city to meet the 2013 Comprehensive Plan and future buildout conditions. All commercial businesses are subject to a water budget. 
  • To promote economic vitality for our city, we need to ensure that there is enough water for all current and future businesses. Our goal is to let you know how much water you (or the previous owner) originally purchased for your business so that you’re aware of your water budget. This can help inform you of your business’ water use, and can help you stay within the allocation that we originally sold to either you, or the business before you.  As of Jan/ 1, 2019, the water rates that you pay for your business will be based on this water budget.  
  • If you’re exceeding your water budget, or think you might by the end of the year, you have a few options. You can pay the surcharge, you can install water conservation devices and appliances, or you can contact city staff to discuss how to purchase additional water resources (via a tap fee) to meet a change in use or need.  

I received a letter that says I can only use as much water as my 10-year water use history. Don’t I get to use as much water as I want? Why should I pay more?

  • The city does not have Service Commitment Agreements or Utility Permits for some accounts. In those cases, we are setting your water budget based on what your business has used over the last 10 years. 
  • All commercial businesses are subject to a water budget that meets the needs of their specific use.
  • To promote economic vitality for our city, we need to ensure that there is enough water for all current and future businesses. Our goal is to let you know what your business’ 10-year water use history is (as this is your water budget), so that you can stay within this budget.  As of Jan. 1, 2019, the water rates that you pay for your business will be based on this water budget.  
  • If you’re exceeding your water budget, or think you might by the end of the year, you have a few options. You can pay the surcharge, you can install water conservation devices and appliances, or you can contact city staff to discuss how to purchase additional water resources (via a tap fee) to meet a change in use or need.  

I received a letter that says I can only use as much water as the 10-year history on my account. I just purchased this business recently, how is my water use impacting this calculation? Don’t I get to use as much water as I want? Why should I pay more?

  • The city does not have Service Commitment Agreements or Utility Permits for some accounts. In those cases, we are setting the budget based on what your business has used over the last 10 years. 
  • To ensure economic vitality for our city, we need to ensure that there is enough water for all current and future businesses, therefore we are setting a water budget for our commercial customers. 
  • All commercial businesses are subject to a water budget that meets the needs of their specific use.
  • The Service Commitment Agreement, Utility Permit or 10 year consumption history remains with the utility billing account and parcel despite change in ownership. If you’re exceeding your water budget, or think you might by the end of the year, you have a few options. You can pay the surcharge, you can install water conservation devices and appliances, or you can contact city staff to discuss how to purchase additional water resources (via a tap fee) to meet a change in use or need

I received a letter that says I’m overusing water compared to what I purchased and that I need to pay more to the city for the water I’m using. Don’t I get to use as much water as I want? Why should I pay more?  

  • To promote economic vitality for our city, we need to ensure that there is enough water for all current and future businesses. Our goal is to let you know how much water you (or the previous owner) originally purchased for your business so that you’re aware of your water budget. This can help inform you of your business’ water use, and can help you stay within the allocation that we originally sold to either you, or the business before you.  As of Jan. 1, 2019, the water rates that you pay for your business will be based on this water budget.  
  • If you’re exceeding your water budget, or think you might by the end of the year, you have a few options. You can pay the surcharge, you can install water conservation devices and appliances, or you can contact city staff to discuss how to purchase additional water resources (via a tap fee) to meet a change in use or need

I received a letter that says I’m overusing water compared to what I purchased. I didn’t buy the original business, someone else did. 

  • The Service Commitment Agreement, Utility Permit or 10-year consumption history remains with the utility billing account and parcel despite change in ownership. 

I received a letter that says I’m within the allocation of water that I or the original business owner purchased. How will I know if I’m staying within that amount?

  • We will print the entire water budget and the remaining water available in your budget on the utility bills so that you can see your use at a glance.
  • Our goal is to let you know how much water you (or the previous owner) originally purchased for your business so that you’re aware of your water budget. This can help inform you of your business’ water use, and can help you stay within the allocation that we originally sold to either you, or the business before you.