2017 Water Rate Update

Background

On December 12, 2017, the Georgetown Divide Public Utility District (District) Board held a public hearing and adopted changes to its current treated water and irrigation water rates.

The District’s rates were last reviewed in 2008, and no adjustments to the rates have occurred since 2011. The water system requires extensive investment, primarily in the replacement and repair of aging pipes and other equipment, in order to maintain a safe and reliable system. The District has insufficient reserve funds to pay for needed replacements and preventative maintenance; and rates were too low to qualify for loans and grants.

Additionally, the District was recently the subject of a Grand Jury Investigation which concluded that the District needed to initiate a rate increase.

Lastly, the District implemented a standardized system to eliminate tiered rates, based on American Water Works Association standards, to ensure that rates are proportional to the level of service provided to each customer.

As a result of these changes, the 2,000 cubic foot water allowance has been eliminated and all customers will now see a Base Charge and a Water Use Charge on their water bills.  The Base Charge is intended to cover a significant portion of the District’s fixed costs.  The Base Charge is based on the size of your water meter.  Larger water meters pay a larger Base Charge because the water system and facilities (eg. pipes, pumps, treatment plants, etc.) need larger capacity to meet the larger demand associated with larger water meters.  In addition to the Base Charge, customers will also pay a Water Use Charge that is based on the volume of water used. 

Frequently Asked Questions

Are there lower rates for low income customers?

State law prohibits the District from charging different rates to a single rate payer or group of rate payers, unless the lower rates can be justified by lower costs.  The District is currently evaluating and developing a low income rate assistance program which would provide payment assistance to qualified low income customers from funding sources other than rates.  Program guidelines and amount of assistance have not been determined.

What do water rates fund?

The District provides treated water service to approximately 3,774 treated water customers (residential and commercial) and 408 irrigation water customers. The water system must be financially self-sufficient. Monthly rates paid by users of the system are the primary source of revenue. All revenue generated from your water bill is used to maintain and operate the water system. These revenues must meet costs such as system maintenance, licensing, electricity, chemicals, reserve funds for emergency repairs and replacement of aging pipes and other equipment, administrative costs, and salaries and benefits for staff. Revenue generated from these rates is also used to pay off debt incurred to rebuild aging components of the system.

Why hasn’t GDPUD been putting money aside for repairs and replacements?  What have my water bills been used for?

The last rate study was performed a decade ago, and rates have been unchanged for seven (7) years.  Revenue has not been large enough to put substantial amounts of money into reserves to fund replacements.  For many years, District revenue has only been enough to fund basic daily operations and has not allowed for replacements, emergencies, or planning for the future.

Will inactive treated water customers pay the base charge?

Yes.  All treated water customers with meters installed, including inactive customers, will pay the base charge.  Customers not taking water delivery still receive entitlement and availability of water service.  Inactive customers may contact the District at any time and request immediate activation of water service.  This comes at a cost and the District must have a system and supply developed, constructed, and properly maintained at sufficient capacity to immediately provide water to inactive treated water customers.  Many of the District’s costs are fixed, meaning that they are incurred whether or not water is delivered. The water system infrastructure requires constant upkeep and maintenance to ensure safe and reliable drinking water upon request. Costs to support inactive treated water customer accounts have been ongoing for years in an effort to maintain readily-available service.

Will treated water customers continue to receive 2,000 cubic feet of water in the base charge?

 No.  The proposed rate structure separates the District’s expenses into fixed and variable.  The base charge is meant to fund the fixed costs to deliver water, and the usage rate is intended to fund the variable costs.

Related Documents

April 25, 2017 Finance Committee- Rate Study PresentationMay 8, 2017 Board of Directors- Rate Study Staff Report and PresentationSeptember 18, 2017 Public Workshop 1-PowerPoint PresentationOctober 12, 2017 Public Workshop 2 –Meeting Notice and InvitationOctober 12, 2017 Public Workshop 2 –Meeting Notice and InvitationOctober 12, 2017 Public Workshop 2- PowerPoint PresentationOctober 12, 2017 Public Workshop 2- Water Rate Scenario ComparisonsOctober 12, 2017 Public Workshop 2- Water Rate Scenario 1 CalculationsOctober 12, 2017 Public Workshop 2- Water Rate Scenario 2 CalculationsOctober 12, 2017 Public Workshop 2- Water Rate Scenario 3 CalculationsOctober 18, 2017 Board Workshop- PowerPoint PresentationOctober 24, 2017 Board Meeting - Rate StudyOctober 24, 2017 Board Meeting - PowerPoint Presentation2017 Proposition 218 NotificationDecember 12, 2017 Final Rate Study12.12.17 Rate Study Presentation