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- 2022/2023 Water Rate and Treatment Plant - Frequently Asked Questions
2022/2023 Water Rate and Treatment Plant - Frequently Asked Questions
Delivering safe, clean drinking water and reliable wastewater services to residents and businesses is top priority at the City of Brighton. Each year, we invest millions of dollars to treat water, replace aging infrastructure, and reduce the amount of pollutants entering our local waterways. Running a dependable, complex water system requires constant maintenance and upgrades to ensure that we are delivering high quality drinking water, while also being good stewards of the environment. We are committed to maintaining our system to the highest standard, and your utility bill helps us do just that.
The City of Brighton is committed to providing our residents with the best utility services possible at the most reasonable cost. In order to maintain the safety of our water and ensure an adequate supply of water for our customers, staff recommends a 9.1% increase in water rates to reestablish rates that were in place in 2019, as well as a Water Treatment Plant fee ($6 month for single family home with a standard meter) to finance the non-growth related costs of the project which is set to break ground this July.
While raising rates is never easy, below are some frequently asked questions that may help you understand utility rate changes and what you can anticipate in the future.
Why is the city raising rates?
While raising rates is always difficult, these changes are necessary for the city's water utility to operate as an enterprise where users of the system are charged what it costs to operate the system for clean and safe drinking water. In 2020, water rates were decreased by 8%. Prior to that, rates had not increased since 2017. The decrease was intended to be temporary to spend down reserves, and those reserves have been spent. Rates need to be reset in order for the utility to operate in a financially sustainable way.The city’s current water treatment plant is more than 25 years old and does not have enough capacity to meet the water needs of current residents. The city plans to build a new water treatment plant that will increase capacity to meet the needs of both current and future residents. The new plant will double the capacity of the existing plant and will be funded in part by contributions from developers and in part by rates from current users. The development fees were increased in 2021 as approved by City Council. Those rates are sufficient to fund the “growth” portion of this project. The remainder of the project must be funded by operational revenues, or user fees. Current rates do not generate enough revenue to fund the costs of the water treatment plant, which is why the city is proposing a water treatment plant fee, which is a flat fee starting at $6/month.
It’s important to note that TABOR strictly limits the revenues that can be contributed to a utility enterprise fund. The Water Fund must be funded primarily by user fees, including development fees. It is not funded by general tax dollars.
How did the city come up with 9.1 percent?
The increase amount of 9.11% was determined by applying annual inflation rates to the 8% discount that was approved in 2019. The inflation rates were obtained from the Colorado Department of Local Affairs for the Denver-Lakewood-Aurora area which are published on the DOLA website linked here.The following calculation shows the application of inflation to the original discount rate to reach the 9.11% being applied:
| CPI | Rate Change | |
|---|---|---|
| 2019 Reduction | 8.00% | |
| 2020 CPI | 1.95% | 8.16% |
| 2021 CPI | 3.54% | 8.44% |
| 2022 CPI (Feb 2022) | 7.90% | 9.11% |
What does this mean for my family?
The average single family home that uses approximately 4,000 gallons of water in the winter would see about an increase of about $8.48 per month. In summer, the average household that uses 14,5000 gallons of water would see a $13 increase per month.When are these increases scheduled to go into effect?
The water rate increase of 9.1% is scheduled to go into effect with utility bills issued after July 1, 2022. The Water Treatment Plant fee (starting at $6 per month for single family homes with a standard meter) would go into effect January 1, 2023.Why is this increase in rates starting in the summer?
The rate reset is being applied in July 2021 to prevent further depletion of the fund’s operating reserves. The 8% discount approved in 2019 was intended to spend down operating reserves, which means that operating expenses have been higher than operating revenues since that time. The operating reserves have been depleted and can no longer support operating with revenues that do not fully fund expenses.How do Brighton’s water rates compare to other cities in the Denver metro area?
The following chart shows a comparison of average water utility charges for average summer usage, which is estimated to be 14,500 per month. The calculations for neighboring communities uses those communities 2022 water rates.Brighton’s current 2022 water rates result in an average summer water utility charge of around $77, which is well below the area average of around $93. When the proposed increase is applied, Brighton’s average water utility charge for summer usage is estimated to be just shy of $90, which is still below the area average.
What does the water treatment fee go toward?
The Water Treatment Plant fee would go toward financing the non-growth related costs of the Water Treatment Plant project, which is set to break ground this July 2022 and be completed in the summer of 2025.Why is the city building the water treatment plant?
The Greensand Water Treatment Plant provides Brighton water customers with up to 10.0 million gallons of clean, renewable water each day. This plant is 25 years old and identified as being near the end of its life. City water usage continues to grow and has exceeded the capacity of the current Water Treatment Plant on multiple occasions. Additionally, the City is in non-compliance with our discharge permit. This permit is regulated by the Colorado Department of Public Health & Environment (CDPHE) and is monitored for compliance periodically. This permit is required to discharge the brine from the City’s Reverse Osmosis plant to the South Platte River.
In January, staff presented the City Council with options for the Water Treatment Plant expansion. Options had similar costs but different outcomes for capacity. Staff and Council has moved forward with the 20 MGD plant design, including updating the rate model. Brighton needs to invest approximately $155 million in the design and construction of the plant to ensure our community has quality water now and in the future.
With the approval of the rate increase and plant fee, Brighton will break ground on the new Water Treatment Plant in July of this year. Upon completion in 2025, the new plant is expected to provide water treatment capacity through 2045, eliminate the dependency on Denver and Thornton water, eliminate costly brine discharge and utilize the newest water treatment technology.
What happens if the city doesn’t build the Water Treatment Plant?
In 2021, the City experienced 20 days where the demand exceeded the supply. If a new plant is not built, the city runs the risk of running out of water. This could create a domino effect of state involvement with the treatment process. The biggest impact is the water would need to be brought into compliance, so our residents would not be able to drink the water until we received approval from the state.Why doesn’t the city limit growth?
We need to replace the water plant and the impact fees from growth will pay for a large percentage of this cost. This will eliminate the need for all of the costs to be borne by the existing residents. In addition, there are currently over 2,000 lots approved for new homes. We have made commitments to these homebuilders that water will be provided when they pay their impact fees. Retail and job growth is directly related to residential growth. The staff has prepared alternatives for managed growth and will continue to strategize alternatives for the council to consider. There are very proactive efforts taking place now to reduce the amount of treated water used to irrigate lawns in new developments and the existing city. Replacing sports fields with artificial turf is reducing water consumption and making fields available for more use. Converting parks to a non-potable water source is reducing treated water consumption. Utilizing more sustainable landscape methods in new development is reducing treated water consumption. Having new growth pay their own way and taking water conservation to a new level will help balance the needs of the community.
What happened to the $70 million fund balance from 2019?
The $70 million represented the 2019 unrestricted reserves in all three enterprise funds (Water, Waste Water and Storm Drainage). The amount attributable to the Water Fund was $42.7M and of that amount, only $12.9M was available for operational activities. The remainder is restricted for use on expansion and will be used to fund a portion of the Water Treatment Plant. Much of the $12.9M has been given back to users in the form of the 8% rate discount approved in 2019 and effective in 2020. The discount lowered operational revenues to a level where they were no longer supporting operational expenses and therefore spending those reserves. The proposed rate reset is to bring rates back to that 2019 level because we no longer have operational reserves to spend.What if I can’t pay my water bill?
The city currently offers the Brighton Water Assistance Program to income-qualified customers. Utility customers who qualify may receive up to $500 annually.Additionally, the city offers residents Budget Billing. Budget Billing aims to keep your bill uniform for every cycle for the coming year. Budget billing is calculated using the previous 12-month average bill and is re-adjusted each March.