To: Members of the Castle Rock Water Commission
From:
Mark Marlowe, P.E., Director of Castle Rock Water
Anne Glassman, Business Solutions Manager
Title
2021 Rates and Fees Timeline and 5 Year Rates and System Development Fees Increase History and 5 Year Forecast
Town Council Agenda Date: NA
Body
________________________________________________________________________________
Executive Summary
The purpose of this memorandum is to provide Castle Rock Water (CRW) Commission with the updated 2021 Rates and Fee Study anticipated timeline and also to give a history on the last five years’ actual rates and system development fees increases as compared to what was projected by the models and also give the forecast of the next five years based on the 2020 Rates and Fees study and a plan for the future.
2021 Rates and Fees Timeline
As shown in attachment A, the 2021 Rate and Fees study timeline will remain similar to the last few years. This will include bringing the final results of the study to two readings for Council in September of 2021. Throughout the process again this year, CRW staff will be bringing deliverables to commission as they become available, and the major items are listed in the attached timeline.
5 Year Rates and Development Fees History and 5 Year Forecast
CRW staff has put together a five-year increase history for the rates and system development fees. This includes 2017 to 2021 as shown in the two tables below. Staff believes that it is important when determining the increases that are needed for rates and system development fees each year to look at how these can be spread over time without producing future rate shocks for the community and also to ensure that the most vital projects are included as needed in order to ensure adequate water supply and infrastructure as well as wastewater and stormwater infrastructure.
|
Actual 5 Year Rate Increases |
|
Fund |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Water Fund |
0.0% |
0.0% |
0.0% |
0.0% |
0.0% |
|
Water Resources Fund |
3.0% |
0.0% |
3.0% |
0.0% |
0.0% |
|
Wastewater Fund |
0.0% |
0.0% |
0.0% |
-3.0% |
0.0% |
|
Stormwater Fund |
4.0% |
0.0% |
0.0% |
0.0% |
0.0% |
|
Actual 5 Year System Development Fee Increases |
|
Fund |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Water Fund |
2.4% |
5.9% |
1.3% |
3.0% |
10.0% |
|
Water Resources Fund |
0.2% |
0.0% |
11.7% |
3.5% |
5.0% |
|
Wastewater Fund |
6.0% |
15.2% |
1.6% |
0.0% |
0.0% |
|
Stormwater Fund-CC Basin |
12.7% |
0.0% |
0.0% |
3.0% |
5.0% |
|
Stormwater Fund-PC Basin |
17.1% |
0.0% |
0.0% |
3.0% |
5.0% |
Each year staff looks at what was projected in the models during the previous study and compares those numbers to what the models are projecting during the current study. This helps staff to determine if the needed projected increases have changed year over year or if they are staying relatively consistent. Overall when looking at the rate side, the projected rates don’t vary greatly from each year. This table below shows what was projected in the previous year’s study and can be compared to the table above.
|
Projected Model Rate Increase |
|
Fund |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Water Fund |
0.0% |
0.0% |
0.0% |
0.0% |
3.0% |
|
Water Resources Fund |
3.5% |
3.0% |
3.5% |
3.0% |
3.0% |
|
Wastewater Fund |
0.0% |
0.0% |
0.0% |
0.0% |
0.0% |
|
Stormwater Fund |
1.0% |
4.0% |
0.0% |
0.0% |
0.0% |
When looking at the system development fees for what the model projects versus what increases were actually taken varies greatly in 2020 and 2021. This supports the philosophy that we don’t want to implement large increases for the developers all in one year but rather smooth those increases over time. These projections can be seen in the table below.
|
Projected Model System Development Fee Increases |
|
Fund |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Water Fund |
2.4% |
5.9% |
1.3% |
59.5% |
36.0% |
|
Water Resources Fund |
0.2% |
0.0% |
11.7% |
17.4% |
33.0% |
|
Wastewater Fund |
6.0% |
15.2% |
1.6% |
52.5% |
25.0% |
|
Stormwater Fund-CC Basin |
12.7% |
0.0% |
0.0% |
78.1% |
59.9% |
|
Stormwater Fund-PC Basin |
17.1% |
0.0% |
0.0% |
11.4% |
19.7% |
The last item is the forecast for the next five years’ worth of rates and fees increases as projected during the 2020 Rates and Fees study. CRW will use the projections as a guidance for the 2021 study in determining the 2022 increases needed. The tables below show these figures for 2022 to 2026 as calculated in the models during the 2020 study.
|
5 Year Rates Forecast from 2020 Rates and Fees Study |
|
Fund |
2022 |
2023 |
2024 |
2025 |
2026 |
|
Water Fund |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
|
Water Resources Fund |
3.0% |
3.0% |
3.5% |
3.5% |
4.5% |
|
Wastewater Fund |
0.0% |
0.0% |
0.0% |
0.0% |
0.0% |
|
Stormwater Fund |
3.0% |
3.0% |
3.0% |
3.5% |
4.0% |
|
5 Year System Development Fee Forecast from 2020 Rates and Fees Study |
|
Fund |
2022 |
2023 |
2024 |
2025 |
2026 |
|
Water Fund |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
|
Water Resources Fund |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
|
Wastewater Fund |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
|
Stormwater Fund-CC Basin |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
|
Stormwater Fund-PC Basin |
3.0% |
3.0% |
3.0% |
3.0% |
3.0% |
Overall when looking at needed rate increases each year CRW takes into consideration the needs of the utility as well as the affordability of the projected rates and fees and what is best for the community in order to reach the needed goals.
Attachments
Attachment A: 2021 Rates and Fees Study Timeline