Parker Chronicle > News
District delays water hikes
By Chris Michlewicz
In a surprise decision, the Parker Water and Sanitation District voted to postpone indefinitely an increase in water rates that was approved just weeks earlier.
The district board of directors unanimously passed a resolution Jan. 8 to rescind the implementation of a 20 percent increase in water rates and flat service fees. The five board members approved the hike Dec. 22 in the face of heavy public opposition, but now want to wait until the conclusion of a water rate study later this year before making any further decisions. A work group comprising district staff, town government officials, homeowner's association leaders, developers and Parker water customers will help guide the study by researching all possible options to help defray the rising costs of day-to-day operations.
Jason Mumm, Parker water district board treasurer, has several years of experience as a water rate consultant for other metro area water and wastewater districts. He was surprised that a formal rate study had never been conducted, and said flat monthly fees for water and sewer service will be examined to determine whether they should be lowered.
Mumm said the reversal of the previous decision shows the board has listened to the public and their opinions about the controversial increase, which would have raised the average monthly cost of water rates, sewer service fees and water service fees by roughly $11. Tap fees charged to developers who connect to the water and sewer system also were increased. The changes took effect Jan. 1, but the board now says the 2008 rates will remain in effect until the study results are released sometime in the fall.
Establishing a working group of community leaders and Parker water customers is the first step toward healing a community that has been “fractured” by disagreements over the increases.
“What we can’t have going forward is a house divided,” he said.
The postponement of the rate increases means the Parker Water and Sanitation District will lose money for several months, and could possibly lead to a decision to take out a line of credit to maintain steady operations.
“I do believe it will be incredibly difficult year for this district,” Mumm said. “There will be a lot of pain and suffering, yet the board is determined to work through this process and make it very open and accessible to everyone in this community.”
Opponents to the water rate and fee increases said they felt they did not have a voice in the decision and requested a deduction in the proposed hikes. Dozens of angry customers packed meeting rooms and faulted the district for what some deemed “fat” within the proposed 2009 budget. Mumm believes the overwhelmingly negative response was due in part to people being caught off guard by such a large and sudden increase.
“We had a responsibility to prepare them for that, and frankly, we didn’t do that,” he said during an interview last week.
Mumm hopes the comprehensive study will help residents gain an understanding of the costs associated with running a public utility.
Bruce Norton, who has lived in Parker for 19 years, said customers have no control over rate increases.
“We’re dealing with a monopoly,” he said. “It’s not like we can shop around.”
Additionally, there is no incentive through the existing rate structure to conserve water, and therefore, reduce monthly water payments, Norton said. The Hidden River resident is also concerned that customers will be hit several times by the increase through spikes in HOA dues, green fees for golf courses and other costs.
District manager Frank Jaeger cut an original proposed budget that would have increased costs by 28 percent before presenting the final 20 percent increase.
District board vice president Mary Spencer said the hikes were in the best interest of the district, but the board reversed the decision because several customers disagreed with the nature and timing of the action.
All board members acknowledged that the timing for an increase could not be worse, but asserted that the move was necessary.
Some customers have started efforts to oust the board members through a recall election. Mumm encouraged the public to work together in the rate study before taking action.
District officials have cited increases in the cost of electricity and wastewater treatment chemicals as reasons to implement the rate adjustment. Water rates have not been raised in four years, which is why the board was forced to approve such a high increase Dec. 22.
The Parker Water and Sanitation District is encumbered with debt payments to cover the costs of the expansive Rueter-Hess Reservoir project, which has been touted as critical to Douglas County’s future water supply. Several surrounding cities and districts have paid a combined $60 million to reserve water storage space in the 72,000-acre-foot reservoir, which is now under construction just south of Parker.
The monthly debt payments will not go away, and despite a promise to pay for the reservoir construction with tap fees generated by new development, officials might be forced to use all income sources, including rate money, to pay the $100 million commitment. Temporarily delaying payments is likely not an option, Mumm said, adding any line of credit the district takes out would go toward covering operational costs.
Income from tap fees has dropped off by 73 percent since 2005, and the district has been forced to dip into reserve funds to keep up with the debt payments. If that money dries up, the district would become insolvent, leading to catastrophic problems such as a potential drop in local home prices. Mumm underscored the importance of maintaining a steady flow of funding and said failure is not an option.
“People in this district own this utility,” he said. “That’s their water service, and to keep it solvent is part of an owner’s responsibility. There’s no two ways about it.”
A leading national consultant will be retained to lead the water rate study and explore options for a future increase in water costs. There is a chance, especially because of the postponement of the recent water hike, that the increase could be higher than the previously approved 20 percent increase, Mumm said.
The district receives a small portion of its funding through a mill levy on property taxes, and one option could be putting a possible mill levy increase to a vote. Property taxes are tax deductible on federal returns.
The water rate structure could also be overhauled, leading to additional conservation from those who want to move to a lower priced water usage tier. The district should consider giving a credit to customers who actively try to reduce water usage through Xeriscaping or other yard improvements, Norton said.
For more information on getting involved in the public working group or view the recently approved resolution, visit www.pwsd.org or call the Parker Water and Sanitation District at 303-841-4627.
The district board of directors unanimously passed a resolution Jan. 8 to rescind the implementation of a 20 percent increase in water rates and flat service fees. The five board members approved the hike Dec. 22 in the face of heavy public opposition, but now want to wait until the conclusion of a water rate study later this year before making any further decisions. A work group comprising district staff, town government officials, homeowner's association leaders, developers and Parker water customers will help guide the study by researching all possible options to help defray the rising costs of day-to-day operations.
Jason Mumm, Parker water district board treasurer, has several years of experience as a water rate consultant for other metro area water and wastewater districts. He was surprised that a formal rate study had never been conducted, and said flat monthly fees for water and sewer service will be examined to determine whether they should be lowered.
Mumm said the reversal of the previous decision shows the board has listened to the public and their opinions about the controversial increase, which would have raised the average monthly cost of water rates, sewer service fees and water service fees by roughly $11. Tap fees charged to developers who connect to the water and sewer system also were increased. The changes took effect Jan. 1, but the board now says the 2008 rates will remain in effect until the study results are released sometime in the fall.
Establishing a working group of community leaders and Parker water customers is the first step toward healing a community that has been “fractured” by disagreements over the increases.
“What we can’t have going forward is a house divided,” he said.
The postponement of the rate increases means the Parker Water and Sanitation District will lose money for several months, and could possibly lead to a decision to take out a line of credit to maintain steady operations.
“I do believe it will be incredibly difficult year for this district,” Mumm said. “There will be a lot of pain and suffering, yet the board is determined to work through this process and make it very open and accessible to everyone in this community.”
Opponents to the water rate and fee increases said they felt they did not have a voice in the decision and requested a deduction in the proposed hikes. Dozens of angry customers packed meeting rooms and faulted the district for what some deemed “fat” within the proposed 2009 budget. Mumm believes the overwhelmingly negative response was due in part to people being caught off guard by such a large and sudden increase.
“We had a responsibility to prepare them for that, and frankly, we didn’t do that,” he said during an interview last week.
Mumm hopes the comprehensive study will help residents gain an understanding of the costs associated with running a public utility.
Bruce Norton, who has lived in Parker for 19 years, said customers have no control over rate increases.
“We’re dealing with a monopoly,” he said. “It’s not like we can shop around.”
Additionally, there is no incentive through the existing rate structure to conserve water, and therefore, reduce monthly water payments, Norton said. The Hidden River resident is also concerned that customers will be hit several times by the increase through spikes in HOA dues, green fees for golf courses and other costs.
District manager Frank Jaeger cut an original proposed budget that would have increased costs by 28 percent before presenting the final 20 percent increase.
District board vice president Mary Spencer said the hikes were in the best interest of the district, but the board reversed the decision because several customers disagreed with the nature and timing of the action.
All board members acknowledged that the timing for an increase could not be worse, but asserted that the move was necessary.
Some customers have started efforts to oust the board members through a recall election. Mumm encouraged the public to work together in the rate study before taking action.
District officials have cited increases in the cost of electricity and wastewater treatment chemicals as reasons to implement the rate adjustment. Water rates have not been raised in four years, which is why the board was forced to approve such a high increase Dec. 22.
The Parker Water and Sanitation District is encumbered with debt payments to cover the costs of the expansive Rueter-Hess Reservoir project, which has been touted as critical to Douglas County’s future water supply. Several surrounding cities and districts have paid a combined $60 million to reserve water storage space in the 72,000-acre-foot reservoir, which is now under construction just south of Parker.
The monthly debt payments will not go away, and despite a promise to pay for the reservoir construction with tap fees generated by new development, officials might be forced to use all income sources, including rate money, to pay the $100 million commitment. Temporarily delaying payments is likely not an option, Mumm said, adding any line of credit the district takes out would go toward covering operational costs.
Income from tap fees has dropped off by 73 percent since 2005, and the district has been forced to dip into reserve funds to keep up with the debt payments. If that money dries up, the district would become insolvent, leading to catastrophic problems such as a potential drop in local home prices. Mumm underscored the importance of maintaining a steady flow of funding and said failure is not an option.
“People in this district own this utility,” he said. “That’s their water service, and to keep it solvent is part of an owner’s responsibility. There’s no two ways about it.”
A leading national consultant will be retained to lead the water rate study and explore options for a future increase in water costs. There is a chance, especially because of the postponement of the recent water hike, that the increase could be higher than the previously approved 20 percent increase, Mumm said.
The district receives a small portion of its funding through a mill levy on property taxes, and one option could be putting a possible mill levy increase to a vote. Property taxes are tax deductible on federal returns.
The water rate structure could also be overhauled, leading to additional conservation from those who want to move to a lower priced water usage tier. The district should consider giving a credit to customers who actively try to reduce water usage through Xeriscaping or other yard improvements, Norton said.
For more information on getting involved in the public working group or view the recently approved resolution, visit www.pwsd.org or call the Parker Water and Sanitation District at 303-841-4627.
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