Arvada: Rate increase in the cards?

From The Wheat Ridge Transcript (Shanna Fortier):

Owners of a typical single family home in Arvada will likely have to pay $1.41 more a month — or $16.90 additional a year — for water and sewer services fees in 2017.

The average single-family home is considered to be 3.2 people and a yard. And the average single family drinking water bill in Arvada runs about $481 annually and $291 annually for sewage.

Jim Sullivan, director of utilities for Arvada, said the average single-family account in Arvada uses 120,000 gallons of water each year for domestic and irrigation purposes and generates 60,000 gallons of sewage. Single-family accounts form the largest customer group in Arvada, using about 60 percent of the water.

Arvada City Council heard the proposed rate increases at the Sept. 26 workshop and will discuss the proposals during council meetings on Oct. 3 and Oct. 17, also the date of a public hearing. The rates have been raised every year over the past decade.

When taken separately, the proposed increases amount to 2 percent for water and 3 percent for wastewater. A 1.45 percent increase for water tap fees is also proposed. Stormwater and sewer tap fees are not projected to increase, city officials said.

The increases are needed because of rising vendor prices, new equipment and materials, and employee salary raises, Sullivan said.

Sullivan added that over the next 10 years, water operation costs will likely slowly increase as the city prepares to contribute payment for the Denver Water Gross Reservoir expansion project.

Sources of water

Arvada has two sources of water. The first is a 1965 contract with Denver Water. The second source is the city’s Clear Creek water right holdings.

But “these two sources will not be sufficient to meet the residents’ needs at buildout of the city,” Sullivan said. “The city has entered into an agreement with Denver Water to financially participate in the Gross Reservoir expansion in exchange for additional water supplies. This project should increase Arvada’s water supplies sufficiently to meet the city’s needs at buildout.”

Gross Reservoir, named for Denver Water former Chief Engineer Dwight D. Gross, was completed in 1954. It serves as a combination storage and regulating facility for water that flows under the Continental Divide through the Moffat Tunnel and supplies water to Denver Water’s North System.

The reservoir was originally designed with the intention of future expansion to provide necessary storage.

With demand expected to increase in coming years, expanding Gross Reservoir will increase sustainability to the water supply as part of Denver Water’s multi-pronged approach that includes conservation, reuse water and developing additional supply to meet customers’ future needs.

“We think we have enough money in the fund to avoid issuing debt for this project,” Sullivan told city council.

The proposed 2017 water fund budget is $29 million, with 75 percent going toward water system operations, 8 percent for debt services and 17 percent for capital improvements. The Gross Reservoir project is the majority of the capital improvements area.

The city’s current debt service is $2.2 million, paid mostly from tap fees, Sullivan said. He added that in 2020 the water bonds issued in January 2001 will be paid off.

The projected increase in the operations budget for water is $656,000 or 3 percent. However, the bond repayment in 2020 will reduce operating costs by $445,000 annually. Because of this, city staff is proposing to increase water rates by 2 percent rather than 3 percent in 2017, smoothing out future rate changes.

The proposed 2 percent rate increases the water fee part of the bill by $8.52 annually or 71 cents per month. The 3 percent increase for wastewater amounts to $8.40 annually or 70 cents per month.

It is expected that by 2023, the 20-year program to rehabilitate the sanitary sewer system in the city will end and the $2 million needed annually will drop to $500,000 for major repairs and maintenance.

The water tap fee increase of 1.45 percent applies to new construction and would increase by $275, bringing the total cost of a single family water tap to $19,275.