Frequently Asked Questions:
Frequently Asked Questions
WHAT IS THE RATE SETTING PROCESS?
Who makes the decision to set rates?
City Council normally votes on water and sewer rates every year.
How does the city know that its rates are fair and equitable?
Following industry best practices, the city periodically reviews how it sets rates to cover the costs of providing service. The city conducted a Rate and Fee Cost of Service Study in 2018 to determine the amount of rate revenues that must be recovered from each customer class. A new Cost of Service Study is being planned for 2025.
When did the rate proposal go into effect?
January 1, 2024
Are tiered rates for water new to Westminster?
The city has been charging tiered, increasing block rates since 1975. At that time there were three tiers implemented. There were also different tiers and rates in the summer and winter seasons. All the tiers cost more the more a customer would use. In 1993, the city got rid of the winter/summer split and went to year-round tiers and rates.
What does the Westminster Home Rule Charter require?
Charter section 14.4 authorizes City Council to fix rates for public utility services. Rates shall not be discriminatory within any classification of users.
Charter section 14.6 requires that utility rates be fixed so as to at least meet all the operating costs of the utility.
Does the rate proposal provide a profit for the utility?
No. The rate proposal is designed to meet the operating costs of the utility, so that the utility breaks even.
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.
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.
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.
How do you calculate sewer usage?
Because we don’t have sewer meters, the amount we charge our customers for sewer 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.
The city has built and maintained a sewer system that stands ready to serve all city customers at any time. While the average single-family residential customer uses 4,000 gallons of water in the winter time, some customers have little or no water use in these months. Staff recognizes that even though some customers may be gone from their homes during a portion of the year, and others may use very little indoor water in the winter, the city must operate the wastewater system to provide that service at any time.
To ensure that each customer pays an appropriate amount to keep the sewer system ready to provide service, all customers, both residential and commercial, 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 provides a similar level of equity.
Why does Westminster use tiered rates?
Tiered rates are an established method of recovering costs to the city’s system caused by users of all usage levels, and they have been used in Westminster for more than 40 years.
Westminster is an irrigation-season peaking utility. The water plants are sized to meet the water demand on the highest water use day in the year, generally that day is in the first half of July when about 1/3 of the demand is indoor and 2/3 is outdoor irrigation. During most of the year, that plant capacity is not required to meet demand. If there was no outdoor irrigation, the city’s plants would only need to be 1/3 of the size that they were built. The more irrigation you use, the bigger the plants, water storage and pipes Westminster had to build to meet demands and greater level of service to equipment such as pumps, motors, valves and controls.
How will two family units with one water meter be handled?
Duplexes using one water meter will have water allotment for two houses. For example, Tier 1 rates are up to 8,000 gallons for a single house, but for a duplex Tier 1 rates are up to 12,000 gallons. Tier 2 rates are up to 40,000 gallons for a single house (40,000 for a duplex) and Tier 3 rates are 41,000 gallons and over for a single house (42,000 and over for a duplex).
Why does the city charge more for irrigation water? Why does the City charge more for Tier 2 and Tier 3? Doesn’t water cost the same no matter how much I use?
The city charges more for outdoor watering (Tiers 2 and 3) for a few reasons.
- Outdoor water is discretionary water. While we all like having healthy landscaping in our yard, our highest priority water is the water we use to cook and clean.
- It costs us more to produce water in the summer for outdoor watering. You might think that it costs the same to provide you water no matter how you use it, but when we have to produce more water for everyone who’s watering their landscaping, and usually all at the same time, we need to have enough treatment plant capacity, storage and pipelines in place to get that water to you when you want it. Most of our water use is by our residents, so our utility system is built to accommodate that use. In this way, the costs for the higher water use are paid by those who are using it. Said another way, having 3 tiers of water-use pricing ensures that the costs for higher water use (e.g., the water use in Tiers 2 and 3) are not paid by those who are not using it.
WHAT ARE WATER AND SEWER RATES USED FOR?
What do my rates pay for?
As our city’s utility system ages, more and more repairs and replacements are required. Westminster experiences some of the same increases in costs that homeowners do. Maintaining aging systems is expensive, though Westminster is able to do it and keep water and sewer rates at about average for the region.
What does the Meter Service Charge on my bill pay for?
The City’s entire water supply infrastructure system (from water storage to treatment plants, and from pumps to pipes) must be ready to provide clean, safe, drinking water at any moment of any day. This fixed monthly charge pays for that “readiness to serve” ability for the utility, ensuring that water reliably comes out of that tap whenever you need it.
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 is the Roadway Improvement Fee?
In order to ensure that Westminster continues to have high-quality streets, approximately $10 million is needed annually to maintain and preserve the current condition of the city’s roadways. On average, Westminster budgets approximately $4.9 million per year on roadway maintenance and rehabilitation. This data-driven assessment was developed by the City’s pavement management system which assesses and monitors 1,135 lane miles of Westminster roadways.
As a part of the 2022 fiscal year budget engagement process, Westminster City Council will be considering a change to the monthly fee for roadway improvements to address this funding gap and would like feedback from potentially impacted property owners. Under the current proposed 2022 fiscal year budget, properties will be charged a $6 monthly Roadway Improvement Fee for each unit or dwelling beginning January 1, 2022. Currently, property owners are charged $6 per month based on the number of water meters serving the property.
This proposed update to the fee structure will ensure a more equitable source of funding for critical roadway improvement projects and brings your property into alignment with how single family and townhomes are charged.
While this fee will appear on your property’s water bill, every dollar will be used to fund roadway maintenance and improvement projects such as repaving roads, updating streetlights, and other essential infrastructure work. Water infrastructure maintenance will continue to be funded by your property’s water consumption fees.
INFRASTRUCTURE FEE FACTS
- Established in 2006 to defray the City’s costs for curb, gutter and sidewalk replacement and the City’s street lighting costs.
- The current fee is $6 per month and is charged to Westminster residents as part of their monthly utility bill.
- The fee generates approximately $2.2 million annually, of which $1.45 million goes to street light energy and repair costs and approximately $750,000 goes towards concrete replacement costs.
CURRENT CHALLENGES & INEQUITIES
- The $6 monthly fee is charged to every utility account, regardless of their occupancy, orientation or use. As an example, a single-family home would pay $6 per month on their utility bill. A residential apartment complex that has 1 utility account and 20 residential units, would also pay $6 per month.
- Just as with the multi-family example, a retail or industrial complex with a 20,000 square foot building and only 1 utility account would also pay $6 per month.
- The $6 fee was established in 2014 and has not been adjusted to account for inflation. The Consumer Price Index (CPI) for the Denver Metropolitan area shows inflation increased approximately 14.5% between 2014 and 2020. This increase in inflation has resulted in higher concrete and street lighting costs and no additional revenues generated from the Infrastructure Fee.