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Tuesday, May 18, 2021

Growth and Water Rates: How Each Development Project Pays Its Way

An issue identified in comments during recent water rate outreach is the concern over new buildings and water rates. In Westminster, each development project pays its way through tap fees. Tap fees help ensure that current water customers do not pay the cost of providing water to new customers and buildings.

Westminster’s Growth in Historical Perspective:

Westminster’s growth rate is currently below the Denver metro area average, with just over 12,000 new residents total in the past 20 years. Before 2000, Westminster’s population increased by 30,000-plus people in the 1970s, more than 24,000 in the ‘80s and more than 26,000 in the ‘90s. From 2013 to 2019, the City’s average residential growth rate has been just under 1% (0.89%).

Chart: Westminster Population Growth from 1960 through 2019

Chart of Westminster Population Growth 1960 - 2019

Rates have increased in recent years to repair and replace infrastructure that was built in the 1960s through the 1980s.

WATER2025, a major driver of the proposed 2022 rate increase, is the planned replacement of the Semper Water Treatment Facility built in 1969. Westminster’s water infrastructure, with a large portion close to 50 years old, is declining. Twenty-five percent of the City’s water infrastructure is already past its designed life and needs to be replaced to continue to provide safe, clean, and reliable water and wastewater services.

Photo: Semper Water Treatment Facility Being Built Near West 88th Ave in 1969

Picture of Semper Water Treatment Facility Being Built in 1969

The City charges tap fees to ensure that development pays for future water needs and supports the infrastructure that will supply new homes, apartments and businesses. Before each new building is constructed, and before the first drop of water is used, the owner must pay a tap fee ranging anywhere from $31,000 for a single-family home to $1,500,000 for a new hospital, just to connect to Westminster’s utility system.

Tap Fees:

Westminster sets its tap fees to the highest amount legally defensible. The City typically collects more than $10 million a year (about 20% of total revenue over the last ten years) in water and sewer tap fees.

Tap fees help ensure that current customers do not pay for development projects. Tap fees fund water acquisition, infrastructure improvements and capacity increases to support new projects.

Water Supply Planning:

The City’s Water Supply Plan accounts for both current and future water needs. Westminster’s water supply is secure if conservation trends continue, if development occurs in line with the City’s Comprehensive Plan, and if the City continues investing in its water infrastructure.

To evaluate future water supply demands, each land use type is evaluated on a water usage per acre basis based on a full audit of all 33,000+ existing utility accounts and their associated parcels. This audit evaluates water use based on a variety of factors such as land use type, age of construction, and indoor versus outdoor water use.

The City is prepared to provide water to all remaining developable land in Westminster while maintaining a secure supply for current customers.

Environmental concerns such as drought are Westminster’s biggest water challenge. The impacts of adding new customers to the City’s system are small in comparison to the effects that future droughts would have on the City’s water supply. For all water users, conservation measures remain the best way to protect our water supply long-term.

Water-wise actions by customers have helped reduce overall water use since 2000, despite population growth.

Chart: Chart from 2020 Water Efficiency Plan Showing Total Water Demand Decreasing Since 2000

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