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Thursday, February 25, 2021

City plans customer-driven changes to water billing, financial policies ahead of 2022 rate recommendations

On March 15, Westminster City Council will receive a presentation from staff reviewing the city’s 2022 capital improvement program, the Water 2025 project, and recommendations for water and sewer rates for 2022. Water customers did not have a rate increase in 2021 to help offset the impacts of the pandemic on the community.

The city’s Finance, Policy & Budget and Public Works & Utilities teams have been working over the past months to review the water and wastewater utility’s capital improvement program and to refine the financial policies, projected costs and timelines to finance our community’s critical water infrastructure needs. This includes the planned Water 2025 project to replace the city's aging Semper Water Treatment Facility to ensure high-quality drinking water for our community and many future generations of Westminster residents.

The city is taking several steps to change our policies to improve customer service and to help lessen the proposed rate increases for 2022. Our goal with any recommendations or policy changes is to ensure that Westminster’s infrastructure will be safe, reliable and constructed at the lowest cost to our customers.

Based on customer feedback, the city will move forward with two new billing practices for water bills beginning later this year or early 2022. The city will stick closer to 30-day billing cycles for residential customers, and water usage will be calculated on a per gallon rate. A per gallon rate will allow the city to move away from billing in 1,000-gallon rate increments.

On the fiscal side, the city is considering several policy changes. First, the city will present to Council an option to use the city’s utility savings account, the Rate Stabilization Reserve, as part of funding utility expenses. The current Rate Stabilization Reserve balance is intended to help offset revenue shortfalls due to an economic downturn or a rainy irrigation season but it has not been used often. Staff will recommend using some of these funds to reduce future rate increases while keeping a certain level of funds in that reserve for its intended purpose.

The Water 2025 water treatment facility is the highest priority project. To reduce costs, staff will also recommend delaying other infrastructure projects previously planned as part of its capital improvement program. This change would not stop the decline of Westminster’s infrastructure, but it would provide lower rate increases while maintaining safe and reliable services.

Finally, city staff have updated several financial projections based on current market conditions. This change will allow for long-term financing and rate options that could reduce costs by over $200 million over the next twenty years while still maintaining the city’s strong credit rating.

Additional information about water rates and the Water 2025 project, as well as a resource to provide feedback to the city, are available at www.westywaterrates.us.

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