Westminster city staff to recommend increase in water rates for 2022

City elevates efforts to mitigate increases in rate recommendations, saying it responded to community concerns

Liam Adams
ladams@coloradocommunitymedia.com
Posted 3/12/21

After a year of political turmoil in the community and five dense city council study sessions to review water and sewer rates, the city of Westminster is confident in its recommendation for 2022 …

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Westminster city staff to recommend increase in water rates for 2022

City elevates efforts to mitigate increases in rate recommendations, saying it responded to community concerns

Posted

After a year of political turmoil in the community and five dense city council study sessions to review water and sewer rates, the city of Westminster is confident in its recommendation for 2022 rates.

“We have left no stone unturned throughout this process,” said Larry Dorr, Westminster's chief financial officer.

Though staff will still recommend to the city council for approval an increase in rates, it's not as high as it could have been, said Dorr and Max Kirschbaum, public works director. To them, a 3.9 percent increase in water rates and a 5.5 percent increase in sewer rates is the perfect balance between meeting community needs and meeting utility needs. Staff was scheduled to present the recommendation to the council at a study session on March 15.

If the council approves the rate increases, the average customer can expect about a $4 increase in their bill every month. According to calculations from the city, the current average monthly water charge is $41, the average monthly sewer charge is $47 and the fixed fee is $13.

Last year, city staff recommended four different options for rate increases in 2021, with the fourth being as high as 10 to 12 percent. Ultimately, the council rejected all four options and didn't raise rates in 2021 because of the pandemic. Returning to council this year, Kirschbaum said that in an ideal situation, he would like to recommend to the council similar to what he did last year. “If it was an unconstrained world, we would be reinvesting at a higher rate.”

However, the utilities director added, “As it is, we did the best we can to manage the realities of our customers and their budgets, balanced against what are the needs of the community.”

The city was able to settle on the recommendations after a series of maneuvers. First, it decided to withdraw $11 million from a water rate stabilization reserve, about two-thirds of the reserve's existing balance. The city also adjusted its plan for debt — which comes from bonds the city issued to help pay for projects — to have longer payback periods, meaning regular payments are smaller. Last, the city deferred projects on its capital improvement plan (CIP) in the long-term. Although, a comparison of CIP costs presented to the council last year versus this year shows an overall increase in short-term CIP expenses.

The city's biggest near-future water expense is Water2025, a replacement  to the existing water treatment plant. “We wanted to give primacy to the Water2025 program because of its criticality to our city, both today and into the future,” Kirschbaum said.

The first two financial adjustments, using rate stabilization reserves and refinancing debt, “have proven quite powerful,” Dorr said. The city rarely uses its utility reserves and it doesn't anticipate making additional withdrawals in future years after this one.

The city isn't shy about its reasoning for the unprecedented actions. “The decisions that were made, in terms of the level of service and obligations to the customers, are acknowledging that we as a city have heard those concerns from the customers about the water rates,” said Ryan Hegreness, innovation and communication manager.

The past year, community members have expressed frustrations about water rates, to the point of forming a community group, the Westminster Water Warriors, that launched a recall campaign against Mayor Herb Atchison, Mayor Pro Tem Anita Seitz, and Councilors Kathryn Skulley and Jon Voelz. The city rejected the group's petitions to trigger an election due to an insufficient number of signatures, but the group is currently trying to overturn the city's decision in district court.

Meanwhile, other members of the city council, including Councilors David DeMott and Lindsey Smith, have been ardent skeptics of rates.

After the March 15 study session, councilors will have until May to make a final vote. In the event council rejects the 3 percent increases, Kirschbaum and Dorr said the city would have to make additional changes to the CIP, potentially to Water2025.

“There are no other opportunities, there are no other rate stabilization reserves, etc.,” Dorr said. “We have a 51-year-old water treatment facility. That's just a fact of the matter. So, I think there will be a greater degree of risk in safety and reliability, it's as simple as that.”

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