To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Director Castle Rock Water
Anne Glassman, Business Solutions Manager
Title
Ordinance Amending Titles 3, 4, and 13 of the Castle Rock Municipal Code By Changing Stormwater Development Impact Fees, Renewable Water Resource Fees, Water System Development Fees, Meter Set Fees; and Making Certain Editorial Updates to Such Titles (Second Reading - Approved on First Reading on September 1, 2020 by a vote of 6-0)
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 resource fees, water system development fees, meter set fees, and making certain editorial updates to such titles (Attachment A).
The Ordinance was developed from the staff recommendations presented to Council at the August 28, 2020, Council meeting. Recommended changes to the rates and fees for 2021 provide great news for our existing customers with no changes for the typical customer on an annual basis. The specific changes include:
Water Fund
1. Fixed Monthly Charge - no change
2. Volumetric Rates - no change
3. System Development Fee - 10.0% increase
Water Resources Fund
1. Fixed Monthly Charge - no change
2. System Development Fee - 5.0% increase
Stormwater Fund
1. Fixed Monthly Charge - no change
2. Development Impact Fee - 5.0% Increase Plum Creek Basin and 5.0%
Increase Cherry Creek Basin
Wastewater Fund
1. Fixed Monthly Charge - no change
2. Volumetric Rate - no change
3. System Development Fee - no change
Additional recommended changes to rates and fees include approximately 3-6% increases in meter set fees depending on the size of the meter, establishing a sewer average winter monthly consumption (AWMC) for new customers based on customer class average versus the current flat fee of $36.00/SFE, increasing the monthly fixed charge from $17.52 to $26.15 for new 0.67 single family equivalent (SFE) customers and changing the monthly fixed charge to $26.15 as existing accounts transfer from a tenant or owner, increasing the bulk hydrant refundable deposit to cover the cost of the equipment, increasing the bulk water station refundable deposit to cover three months of average base charges and usage to reduce bad debt collection timing and minor changes to special charges based on increases in cost of service.
In order to develop the recommended changes to rates and fees for 2021, Staff completed the 2020 Annual Rates and Fees Study (Attachments B & C). 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 D) provides details on the rates and fees study and the development of the staff recommendations.
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 2019 and 2020 rates and fees studies at each of their meetings from October 2019 to June 2020 to provide staff with input. For a complete list of topics, please see the CRW Commission agendas.
On May 27, 2020, CRW Commission reviewed the Customer Characteristics Analysis for the 2020 rates and fees study with staff.
On July 22, 2020, the results of the 2020 annual rates and fees study were presented to CRW Commission by staff for discussion and direction. Generally, the CRW Commission was supportive of staff recommendations although there was a feeling that SDFs could be increased more in accordance with the modeling results.
On August 18, 2020, staff presented to the proposed 2021 rates and fees to Town Council for discussion and direction. The general direction from Council was to finalize the proposed rates and fees with an ordinance and bring that back to Council for consideration at the September 1, 2020, meeting.
On September 1, 2020 staff presented the 2020 study and proposed changes to Town Council for first reading. Town Council approved these changes with a vote of 6-0, and directed staff to bring this back for second reading on September 15, 2020.
Staff Recommendation
Staff and Castle Rock Water Commission recommend approval of the ordinance as presented.
Proposed Motion
“I move to approve the Ordinance as introduced by title.”
Attachments
Attachment A: Ordinance 2nd Reading
Attachment A -1: (Redlined) 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