Board members are scheduled to revisit options for increasing rate assessments on units of Colorado-Big Thompson Project water. A unit equals an acre foot, which totals 326,000 gallons, or enough for 2.5 households annually.
Earlier this month, board members raised open-rate assessment rates 9 percent for next year. The 2015 rate for cities will increase to $30.50 cents per unit, up from $28, while the agricultural rate will rise to $10.90 cents per unit, up from $10.
Fixed-rate contract assessments, however, may remain $1.50 per acre foot, raising concerns among some water users who pay the higher open-rate fee assessments.
Mike DiTullio, district manager of the Fort Collins-Loveland Water District, said the district expects to pay $610,000 for open-rate fee assessments under Northern Water’s proposal, doubling its $305,000 fee budget this year.
DiTullio said that fixed-rate contract fee users should pay more because they would benefit from the increased fee revenue that Northern Water plans to charge users who must pay open-rate fees.
“Everybody should pay their proportionate share,” DiTullio said.
Other users that pay fixed-rate fees, such as the city of Boulder, believe the fixed-rate fees should not increase.
Boulder should continue to pay the lower fixed-rate fee because the city took a “financial risk” in the early stages of the Colorado-Big Thompson project, Joe Taddeucci, Boulder Water Resources manager, said in a May 30 letter to Northern Water board members.
“We believe the city’s water utility has an obligation to offer the best possible rates to its customers,” he said in the letter. “Boulder recognizes that the cost of providing water is subject to increasingly complex factors, and as such, city staff would be willing to discuss possible solutions to current and future financial challenges with (Northern Water) at their request.”
Northern Water has indicated it may not be able to adjust those fixed-rate fees because they are set “contractually in-perpetuity.” However, board members have directed attorneys to explore whether they can increase the fixed-rate fees, whose contracts were approved decades ago.
“Our board wants to look at it and see if there’s any potential for doing anything with the fixed-rate contracts,” Northern Water spokesman Brian Werner said. “We’d like to see something done with the fees, but we’ve got to look at the legal consequences, too.”
Northern Water has said fee increases will offset flat property tax revenue that funds its ailing budget. The water agency has responded by drawing from its reserves to fund expenses, as well as controlling spending, including postponing filling open positions.
Board members are expected to vote July 11 on the assessment fee increases for future years. They may choose between a sharp increase in 2016 followed by smaller increases over a few years or a gradual increase over 10 years.
Water users have indicated to Northern Water that they would prefer a steady increase.
Northern Water delivers an average of 215,000 acre feet of water annually for municipal, agricultural and industrial uses in Boulder, Broomfield, Larimer, Weld and four other Colorado counties. The agency operates the Colorado-Big Thompson Project, which diverts water from the Colorado River Basin to the South Platte River Basin through a system of reservoirs and tunnels.