Council discusses water utility rate study, contemplates rate increase for next year

Broomfield residents might see an increase in their water utility rates and fees beginning next year.

The Broomfield City Council had a study session Tuesday night to discuss a utility rate study and listened to recommendations to raise the city’s rates and fees.

The study was done in partnership with Willdan Financial Services to review water, wastewater, and reclaimed water utility rates in Broomfield.

The study recommended a 5% water revenue adjustment beginning Jan. 1 and a sliding scale thereafter “to ensure sufficient operating revenue and fund ongoing capital improvements.”

Another recommendation was related to the license fees, which are a onetime fees paid when a new development, residential or commercial, is built. The team recommended the city increase the license fees.

According to the memo, if these changes are passed by the Council in September, all Broomfield residents would see a $3.84 increase in their monthly base charge to address the administration and cover the costs for maintaining the existing infrastructure. This would increase the base rate to $14.31.

Overall, the presentation recommended the city shift to a tiered approach, which would charge more for customers who use more, rather than the current uniform rate charges.

“This shift is intended to promote and encourage conservation around peak demand periods that may be associated with lawn watering and outside activities,” according to the memo.

The study states that with these proposed changes, the average residential customer with a three-quarter inch line using 5,000 gallons of water or less per month would see a decrease of $1.06 per 1,000 gallons on their monthly bill and those higher volume customers using greater than 20,000 gallons per month would see an increase of $1.26 per 1,000 gallons of usage.

The last utility rate study was completed in 2012, and in 2020 staff and the council decided on the need to reassess the approach and methodology for setting fees and rates “in light of the quickly changing economic landscape as a result of the global pandemic,” according to a city memo.

According to the presentation Tuesday, Broomfield operates water and sewer utilities for its customers, and the user charges and fees associated with these utilities provide revenues to cover operating costs, referred to as “enterprise funds.”

The enterprise funds are required to be selfsustaining with sufficient funds for continued operations and maintenance, the memo states.

Kevin Burnett and Michael Cronan, associates from Willdan, gave the study presentation. Burnett said because of increased demand and costs the study and proposal for a new utility rate structure is necessary to ensure adequate revenue generation.

The associates, along with Broomfield’s Chief Financial Officer Brenda Richey, used the study to provide recommendations to council and staff for proposed changes to the utility charges, fees and rates that will be heard in September on first and second reading.

The presentation stated that the main objectives of the study were to “prepare 10-year financial plans in support of meeting ongoing expenses, while adhering to Broomfield and industry standard financial policies, complete a costof-service analysis to identify the cost of providing utility service by customer class and adjust rates as appropriate, update the water, wastewater, and reclaimed water license fees to reflect the cost of providing service to new or expanded development.”

If the proposed changes are approved they are set to go into effect on Jan. 1.

The full study can be found in the memo on Tuesday night’s agenda which can be found at broomfield. org/128/city-council.