~ by Bob Volpe ~
In 2003, the Woodland Park City Council approved an automatic annual adjustment of utility rates.
As a result, residents can expect to pay higher water bills in April, if elected leaders give the okay to new proposed ordinances. Last week, the council gave the okay for the initial reading of these laws, setting a public hearing for March 2.
This annual adjustment was implemented to minimize potential large increases in rates periodically and to attempt to stay consistent with inflation. This annual adjustment was applied to both the operational and capital portions of the wastewater bill and only the operational portion of the water bill. On April 1 of every year starting in 2004, utility rates were set to be adjusted based on the Denver-Boulder-Greeley Consumer Price Index Unit (CPI-U). The annual adjustment was set at 75 percent of the CPI-U. Several new proposed city ordinances, (Nos.1301 and 1302) would change the annual adjustment to 100 percent of the CPI-U as well as include the water capital portion of the water bill in the annual adjustment.
In March 2016, the utilities department along with the utilities advisory committee (UAC), reviewed the water tap management plan reconciliation. The reconciliation establishes the tap fees for the current year. In that review, the UAC requested the annual adjustment be changed to reflect the full 100 percent CPI-U. This was requested to increase revenues in both operations/maintenance and capital expenses.
The increase in revenue would potentially allow for tap fees to not be increased at the 5 percent each year as projected in the reconciliation. The Utilities Advisory Committee believed that tap fees cannot continue to be raised at 5 percent every year. The cost of a tap fee would increase to the point where they would be too expensive and the city may not be able to sell taps, according to committee members.
In addition to increasing the annual adjustment, the UAC determined that the capital portion of the water bill needed to be adjusted to cover capital expenses, capital needs and potentially reduce the reliance on tap sales as well. The current water capital fee of $3.25/month/billable user has been in place since 1997 and hasn’t been adjusted to account for inflation and capital expenses to date. Ordinance No. 1301 includes the water capital portion in the annual adjustment.
The annual adjustment for both the water and wastewater funds has always stayed the same. To minimize confusion with WP utility customers, the city staff recommended that the annual adjustment be applied to both funds as it has in the past. As always, if rates need to be lowered or raised to cover additional expenses, the utility department has the option to adjust rates as needed and or required. The utilities department recommends that the annual adjustment is also changed in the wastewater fund to reflect the same annual adjustment as the water fund (Ordinance No.1302).
At last week’s council meeting, WP Utilities Director Kip Wiley expressed the need for a rate increase to keep up with capital improvements in water acquisition and the overhauling and improvements to the city’s wastewater facility.
If these rate hikes are approved, as of April 1, 2017, an average water user of 4,000 gallons will have a water and wastewater bill of $58.44/month. If these proposed ordinances are adopted, water and wastewater utility bills will increase to $58.90/month. This increase of $0.46 per month per customer is based on 10 percent of the CPI-U.
The council unanimously approved of the reading of these ordinances and a public hearing was scheduled for March 2.
If approved, the rate increase will take effect on April 1.