Westminster City Staff is recommending a 4% water rate increase and a 6% wastewater rate to cover rising inflation and help pay for a new water treatment plant.

Brian Donahue, business operations administrator, said the request comes as the water utility has seen an increase in cost due to a 19.7% increase in inflation.

As well, the 4% increase in water rates will allow for water plant renovation and new construction, and the wastewater rate will allow for necessary regulatory enhancements.

Donahue presented his recommendation and a list of options to the city council at their post-meeting discussion on Sept. 26.

The average water bill for residents during 2022 was $41.34 per month. For the 2023 proposed increase, the bill would go to $43.34 per month. For the average monthly wastewater bill, the cost would go from $31.36 to $33.24.

Totaling both of those, the monthly bills would go from $73.04 to $76.58.

Sustainability

Donahue said the rate increase would improve the long-term sustainability for the water utility. Council and city staff have been eyeing a new water treatment plant, which has been in discussion for the majority of 2022.

Westminster’s council lowered new water rates on Feb. 28. Those rates kicked in on June 1 and that means the city could need to take out a bond to fund new water treatment improvements, according to Deputy City Manager Barbara Opie.

“The City will be studying the new, lower water rates’ impact on water consumption,” Opie said on Feb. 28. "Modeling (that was) used in setting the new rate structure includes $150 million for a replacement water treatment plant or the rehabilitation of the existing Semper Water Treatment Facility."

The city could either raise rates now to cover a bigger percentage of the cost of a water treatment plant or it could fund it with bonds that are paid over next decades, she said. Bonding now would spread the burden of the plant's cost over today’s customers as well as those down the road.

Mayor Pro Tem David DeMott asked if the 4% increase puts the utility in a good position. City Manager Jody Andrews said the raise would put the city in a position for two of the three water treatment plant options.

Donahue presented those options to the council on Sept. 26. Each includes the cost of the treatment plant as well as a 2023-2027 capital improvement program that includes other necessary upgrades and includes $15 million from the American Rescue Plan Act funds and $3 million from the rate stabilization reserve.

The first scenario would cost approximately $170 million for a new water treatment plant. Scenario two would cost $220 million and the third scenario would cost $300 million.

Andrews said scenarios one and two are the most feasible.