North Weld eliminates Severance’s 25% discount on water rates

SEVERANCE — The town of Severance is losing a 25% discount on water rates after a vote Monday by the North Weld County Water District board.

The district provides water treatment and delivery for Severance and other towns and unincorporated areas of Weld and Larimer counties. Severance was found not to be in compliance with a clause in its Water Service Agreement, specifically a requirement related to water-storage capacity.

“Under contract, the towns are required to have [storage] above their max annual use,” North Weld district manager Eric Reckentine told BizWest. “Severance’s current storage volume is below that. They’ve been above their storage requirement for a couple years.”

Reckentine said the requirements are “to reduce their usage off of our system, which helps control peak-hour flows.”

He said that his calculations are that elimination of the discount will cost Severance an additional $25,000 per month during peak summer months. He said he has not calculated the effect beyond the summer.

Severance Mayor Matt Fries addressed the North Weld board Monday, requesting that the board defer the increase to Jan. 1 to enable the town to budget and appropriate the funds. He noted that the town is preparing to build a third water-storage tower “to avoid these potential penalties.”

Severance town administrator Nicholas Wharton also attended the North Weld board meeting.

The new tower has “been on agendas, it’s been budgeted for, there have been monies set aside. A couple of delays that have caused that tower to not as of today be built,” Fries said, including the COVID-19 pandemic and issues with the landowner where the tower would be built.

Those issues have been resolved, he said.

“Our contract, the Water Service Agreement, says that we need to pay a penalty, and we are willing to do that without argument,” Fries said, provided that the town is treated equitably compared with other municipalities.

“The second ask is that we’re on an annual-year budget process, so these penalties have not been budgeted for, and we would simply ask that you would allow us to have these become effective Jan. 1, 2023, so that we have an opportunity to start at the very beginning process of our budget cycle,” he told the board.

“I don’t want anybody to have the impression that the town of Severance, since 2019, has been sitting on its hands as it relates to this additional storage,” Fries added. “We started planning, started budgeting. I think it’s fair to say, if we wouldn’t have gone through the COVID experience, we’d probably have had a tower today. I think it’s probably also fair to say that if we wouldn’t have gone through a moratorium, we would have the tower right now. Those two things go hand in hand.”

North Weld imposed a tap moratorium last fall because of capacity issues with treatment and delivery That prompted Severance to impose a moratorium on building permits, costing the town funds. North Weld has lifted its moratorium but it is still limiting the number of taps that can be issued. Severance lifted its building-permit moratorium.

Despite challenges cited by Fries, North Weld board members rejected any delay in eliminating the 25% discount, expressing concerns about setting a precedent for other towns that might fall out of compliance with the Water Service Agreements, as well as fairness compared with increased fees already being paid by dairies as the North Weld County Water District raised rates this year.

In the end, the board voted unanimously to remove the 25% discount immediately, with chair Tad Stout, a former Severance Town Board member, abstaining.

It’s unclear what steps Severance might take to come up with the funds to pay the higher fees. Fries and Wharton did not respond to requests for comment.

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