To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E. Director of Castle Rock Water
Nichol Bussey, Business Solutions Manager
Paul Rementer, Enterprise Fund Analyst
Title
Ordinance Amending Chapters 3.16, 13.12 and 13.30 of the Castle Rock Municipal Code by Changing Stormwater Development Impact Fees, Water, Water Resources, and Stormwater Rates, and Meter Set Fees (Second Reading - Approved on First Reading on September 20, 2022 by a vote 7-0) [Entire Town of Castle Rock and extraterritorial service areas]
Body
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Executive Summary
The purpose of this memorandum is to request Town council approval of an ordinance amending titles 3, 4 and 13 of the Castle Rock Municipal Code by changing Stormwater Development Impact Fees, Renewable Water Resources System Development Fees, Water System Development Fees, Wastewater System Development Fees; Water, Water Resources, and Stormwater and rates; meter set fees and rates for bulk water; and making certain editorial updates to such titles (Attachment A).
The Ordinance was developed from the staff recommendations presented to Council at the September 20, 2022 Council meeting. Recommended changes to the rates and fees for 2023 include rate increases driven by significant increases in electricity rates, increases in construction and labor costs, and supply chain disruptions. The Specific changes include:
Water Fund
• 4.5% increase in the Fixed Monthly Charge
• 4.5% increase in the Volumetric Rates
• 10% increase in the System Development Fees
Water Resources Fund
• 7.5% increase in the Fixed Monthly Charge
• 15% increase in the System Development Fees
Stormwater Fund
• 4.5% increase in the Fixed Monthly Charge
• 10% increase in the Development Impact Fees in Plum Creek
• 10% increase in the Development Impact Fees in Cherry Creek
Wastewater Fund
• No change in the Fixed Monthly Charge
• No change in the Volumetric Rates
• 10% increase in Wastewater System Development
In order to develop the recommended changes to rates and fees for 2023, Staff completed the 2022 Annual Rates and Fees Study (Attachments B, C, D, E, & F). The annual study is critical to ensure Castle Rock Water fully re-evaluates the cost of service and updates the financial plans so that revenue requirements and resulting rates and fees are based on the best available current information going into the future.
The attached Staff Report (Attachment G) provides details on the rates and fees study and the development of the staff recommendations.
Notification and Outreach Efforts
The proposed SDFs have been sent to the Economic Development Council (EDC) for distribution to the home builders, developers and other interested parties among the development community.
History of Past Town Council, Boards & Commissions, or Other Discussions
On November 23, 2010 with its adoption of the 2011-2015 Rates and Fees, Town Council requested annual updates each year thereafter with Castle Rock Water (CRW) Commission participation and Town Council adoption of endorsed recommendations. CRW Commission reviewed at least one aspect or component of the annual rates and fees study process and the 2022 rates and fees study at each of their meetings from October 2021 to August 2022 to provide staff with input. For a complete list of topics, please see the CRW Commission agendas.
On May 25, 2022, CRW Commission reviewed the Customer Characteristics Analysis for the 2022 rates and fees study with staff.
On August 31, 2022, the results of the 2022 annual rates and fees study were presented to CRW Commission by staff for discussion and direction. CRW Commission was supportive of staff recommendations at this time.
Staff Recommendation
Staff and CRW Commission recommend approval of the ordinance as presented.
Proposed Motion
“I move to approve the ordinance as introduced by title.”
Alternative Motions
“I move to approve the ordinance as introduced by title, with the following conditions: (list conditions).
“I move to continue this item to the Town Council meeting on _____ date to allow additional time to (list information needed).”
Attachments
Attachment A: Ordinance 1st Reading
Attachment B: Volume 1 (Rates) Draft
Attachment C: Volume 1 Appendix C: Customer Characteristics Memo
Attachment D: Volume 1 Appendix D: Volume 1 Stantec Review Letter
Attachment E: Volume 2 (System Development Fees) Draft
Attachment F: Volume 2 Appendix C: Volume 2 Stantec Review Letter
Attachment G: Staff Report