HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/14/2017 - CHANGES TO THE UTILITIES RAW WATER REQUIREMENTSDATE:
STAFF:
February 14, 2017
Donnie Dustin, Water Resources Manager
Carol Webb, Water Resources/Treatmnt Opns Mgr
Lance Smith, Utilities Strategic Finance Director
WORK SESSION ITEM
City Council
SUBJECT FOR DISCUSSION
Changes to the Utilities Raw Water Requirements.
EXECUTIVE SUMMARY
The purpose of this work session is to seek City Council input on staff’s proposed changes to the current Raw
Water Requirement (RWR) system and associated Cash-in-Lieu (CIL) rate. The review of the RWR and CIL has
been prompted by various recent events (e.g., change in water use and water right prices) and has resulted in
staff proposing several changes to the RWR and CIL that are needed to ensure that the impacts of new
development will be offset and that the City will have adequate water supplies and infrastructure.
Staff will provide City Council with an overview of the current RWR system and associated CIL rate, which allows
for generating adequate funds and water rights to provide a reliable water supply for new development (and
redevelopment needing increased water service) within the Utilities water service area.
Utilities staff recommends the following changes:
Adjust RWR schedules to reflect recent (lower) water use
o Use number of bedrooms for indoor component of residential schedule
Adjust CIL rate per a hybrid cost approach
o Increase CIL rate to $16,700 per acre-foot of RWR
Accept cash only (and existing City-issued water certificates and credits)
o Discontinue the dedication of water rights
Require periodic adjustment of the RWR and CIL.
o Review and adjust (if necessary) the CIL rate biennially
o Review and adjust (if necessary) the RWR schedules every 5 to 7 years
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
What feedback does Council have on the proposal to:
1. Change the amount of raw water required?
2. Change the CIL rate and methodology?
3. Accept cash only?
4. Require periodic updates to the RWR and CIL rate?
BACKGROUND / DISCUSSION
The Raw Water Requirements (RWR) are a dedication of water rights or cash-in-lieu of water rights (CIL) to
ensure that adequate water supply and associated infrastructure are available to serve the water needs of
development (including redevelopment needing increased water service). Staff will present background
information including the existing RWR system and CIL rate, future development and water supply needs, water
use changes, and potential changes to the RWR system and CIL rates.
February 14, 2017 Page 2
Water Service Areas in Fort Collins
The City of Fort Collins Utilities (Utilities) water service area covers the central portion of Fort Collins. As the City
continues to grow into the Growth Management Area, much of this growth will be outside the Utilities water
service area, and will instead be in the service areas of the surrounding water districts (mostly the East Larimer
County Water District and the Fort Collins-Loveland Water District (Districts). Water service for much of this
growth will thus be provided by the Districts. The attached map shows these service areas (Attachment 1).
Although regional water collaboration discussions are ongoing with the Districts and direction or potential
outcomes of those discussions have yet to be determined, any proposed changes to the RWR will only apply to
water service from Utilities and within the Utilities water service area. This does not preclude future changes to
the RWR for water service from Utilities based on potential outcomes of the regional discussions or from the
Districts modifying their respective water dedication requirements.
Raw Water Requirements
The RWR is a requirement for providing adequate water supply service by Utilities. It currently requires a
dedication of water rights, a payment of cash-in-lieu of water rights, or turning over City-issued water certificates
to ensure that an adequate supply of raw (untreated) water and associated infrastructure (e.g., storage reservoirs)
are available to serve the needs of development (including re-development needing increased water service).
Generally, the RWR are based on water use and development type. The current RWR schedules are attached
(Attachments 2 and 3). The goal of the RWR is to acquire adequate water rights and funds to provide a reliable
raw water supply for a development. Although not the focus of this discussion, other water-related development
fees include water and wastewater plant investment fees (PIFs) that are assessed to cover the treatment and
distribution infrastructure required to process and transport treated water and resulting wastewater into and out of
a development. These water-related development fees are one-time impact fees (or requirements) and are
separate from water rates, which recover the operational costs of running and maintaining this infrastructure.
For the purposes of this discussion, RWR refers to the volume of raw water needed to meet the projected water
use of a development (in acre-feet of water) and the CIL fee refers to the cash equivalent of that water supply
needed.
The current amount of RWR assessed for residential development is based on a calculation that incorporates
indoor and outdoor use components and a water supply factor multiplier. The current amount of RWR assessed
for non-residential (or commercial) development is based on the average use for particular meter (or tap) sizes
and also includes a water supply factor multiplier. The water supply factor used in both the residential and
commercial RWR schedules is currently 1.92, which means that Utilities requires 1.92 times the amount of the
projected (or average) water use of a development. Reasons for this factor include the need to account for
treatment and distribution losses in the supply system, variable demands of customers (e.g., higher use during
hot, dry years), variable yields of supplies (e.g., less yield in droughts) and variable yield from the Utilities different
water supply sources (since some yield better than others). Given these and other uncertainties in providing
reliable water supplies (e.g., climate change), the 1.92 water supply factor continues to be necessary.
Once the amount of RWR for a development is determined (in acre-feet), the RWR currently can be satisfied with
acceptable water rights, a payment of cash in-lieu-of water rights, City-issued water certificates or credits, or a
combination. The water rights currently accepted by Utilities for satisfaction of the RWR are attached
(Attachment 4). The CIL rate is currently $6,500 per acre-foot of RWR. Previous adjustments to the CIL rate
have considered the raw water supply situation of Utilities at the time, including factors such as the market price
of Colorado-Big Thompson Project (CBT) units, the potential value of local water rights (e.g., Southside Ditches),
and the goal to receive an appropriate mix of water rights and cash needed to develop additional firm yield for
development.
Among other things, changes to the CIL rate should consider the cost to acquire additional storage capacity (e.g.,
Halligan Water Supply Project) and other facilities required to fully utilize the Utilities water rights portfolio, the
value of the existing water supply system, and developing a methodology for easily updating the CIL rate.
February 14, 2017 Page 3
Future Development
The amount of RWR needed to meet Utilities’ future water supply needs includes calculating the projected
amount of future water use, determining the water rights and/or facilities needed to meet that projected use, and
adjusting the RWR to acquire the necessary supplies and/or facilities.
Calculating the projected amount of future water use and expected RWR that will be turned in depends on
projected growth (both population and commercial/industrial). The Utilities’ water service area population is
projected to grow about 45,000 by the year 2065 (from the current population of about 133,000 to about 178,000).
Based on the current RWR schedules, this projected growth is estimated to provide about 11,900 acre-feet of
additional RWR that will be turned in to Utilities. However, water use has significantly changed since the current
RWR schedules were developed.
Water Use Changes
The current RWR schedules are based on a 1983 study focused on relating actual water use with the raw water
requirements. The study analyzed annual water consumption data broken into categories based on number of
dwelling units, type of living structure, and equivalent lot size (net total area of development divided by number of
dwelling units). A linear formula was then derived which could be used to project consumption on the basis of
residential density (number of units and size of lot), utilizing the same formula for both single-family and multi-
family developments. This projected consumption is the “expected use” for a particular type of development.
Acknowledging the impacts of conservation on the City’s water consumption, Utilities staff studied recent water
use patterns for single-family, multi-family, and commercial developments. The results of the study showed
significantly lower water consumption for single-family and multi-family developments over recent years, as
compared to the expected use from the current RWR calculations. Differences in water consumption for
commercial developments were not as significant, though changes were also present.
The differences in expected use versus recent actual use prompted staff to investigate possible methods for
updating the water use formulas in the RWR in order to better project expected use for future developments.
Methods
To investigate recent trends in water consumption, the past 10 years (2006-2015) of monthly water billing data
was analyzed, broken out by single-family residential, multi-family residential, and commercial developments.
Utilizing 10 years of consumption data helps to capture climatic variations, which can greatly affect water
consumption across all development types. From the outset, the data for different types of residential
developments were analyzed separately, with the anticipation that average consumption trends would differ
between development types. Further investigation into the use data and types of developments led to combining
data for duplexes with single-family developments.
Single-family/Duplex
Due in great part to successful conservation efforts, water consumption for single-family residential customers has
decreased. The current analysis shows a significant difference between the average annual use per single-family
home and the calculated expected use from the current RWR equations. These differences are outlined in Table
1.
Multi-family
Due to the complexity of compiling and verifying water consumption data for multi-family developments, which
often include multiple buildings and irrigation taps, a representative sample of developments were analyzed for
this study.
Multi-family residential water use, which includes both indoor and outdoor use, has seen an overall downward
trend and the average annual use per unit is significantly lower than the calculated expected use from the current
February 14, 2017 Page 4
RWR equations. Table 1 shows the average use per unit, as well as the change from the expected use predicted
from the current RWR equations.
Table 1. Summary of annual residential water use from 2006-2015
Residential
Development Type
Expected Use
per Unit
(gal/year)
Average Use
per Unit
(gal/year)
Fraction of
Expected Use
Single-family/Duplex 130,840 96,640 74%
Multi-family 79,720 48,380 61%
In an effort to realign the RWR equations to more closely reflect current use patterns, multi-variate regression
models were utilized to investigate multiple variables (e.g., lot size, number of units, building square footage,
number of bathrooms, and number of bedrooms) and their ability to predict water use. The results of the analyses
suggest that the best models for predicting water consumption for both single-family and multi-family residential
developments are those which include lot size and number of bedrooms. The correlation between number of
bedrooms and indoor water use was much greater than the current method based on number of units.
This analysis indicates that altering the current RWR schedules would more accurately reflect current residential
water use patterns, as well as more equitably distribute those requirements across the range of development
types and sizes by better reflecting actual water use. Proposed alterations to the residential RWR schedule
include separate equations for single-family (and duplex) and multi-family residential developments, as well as
modifying the equation to reflect expected use as a function of number of bedrooms and lot size. These changes
would reduce the volume of water required under the RWR for the average residential development.
Commercial
Finally, the analysis considered non-residential (or commercial) water use. An analysis of non-residential water
use from 1981-2015 showed that non-residential water use increased by roughly 35% shortly after the 1980s
water use study, but has trended back downward since then.
Non-residential water use can vary widely by the type of business (even for the same tap size). For instance, a
restaurant would be expected to use more water than a hardware store, even though they may occupy otherwise
similar commercial spaces of equal size and are connected to Utilities with the same tap size. It would be
administratively difficult and costly for Utilities or developers to accurately estimate each non-residential
development type’s water use, especially as that use can change over time as businesses evolve and come and
go on a particular property. Each of the most common tap sizes from 0.75-inch to 2-inch thus have a set RWR
volume.
The current method of a set RWR volume for the smaller tap sizes maintains equity across different types of
water users for a single tap size by setting an allotment for a maximum allowed amount of water use, and then
applying a surcharge rate for use beyond the allotment. The allotment is based on 80% of the average use for a
tap size. This method provides a baseline that encourages water conservation, while still allowing customers to
pay for additional RWR for greater amounts of water use. This method also recognizes that a small number of
high water-use businesses pull up the overall average use of all customers in that tap size. Consequently, by
using 80% of the average, the numerous businesses that use much less than the average are not penalized.
Funds acquired from the surcharge rate applied to use over the allotment are used to acquire more water
supplies. This methodology is still applicable to current commercial development and is recommended to be
continued.
Table 2 shows the average annual water use by tap size, the expected use predicted by the 1980s study and
used in the current calculation of RWR, as well as the fraction of expected use. The table shows that non-
residential water use was less than expected for the 1-inch, 1.5-inch, and 2-inch taps, but the 0.75-inch, was near
expected. Since RWR for non-residential development is determined by tap size, the RWR could be adjusted by
the fraction of expected use to reflect the change in water use over time.
February 14, 2017 Page 5
Table 2. Summary of annual, non-residential water use from 2006-2015
Tap Size (inches) Expected Use
(gallons/year)
Average Use
(gallons/year)
Fraction of
Expected Use (%)
0.75 191,000 190,000 100%
1.0 636,000 479,000 75%
1.5 1,273,000 1,002,000 79%
2.0 2,037,000 1,678,000 82%
Suggested RWR Adjustments
Given the changes in water use from the expected amount per the current RWR calculations, staff recommends
that the RWR calculations be adjusted to reflect the information provided above. Making these changes will
reduce the overall projected amount of expected RWR the Utilities will receive in the next 50 years from about
11,900 acre-feet to about 7,700 acre-feet.
More specifically, it is recommended the RWR calculations be changed to the following:
Water Supply Needs
In order to meet future growth, Utilities projects the need for new infrastructure and some additional water rights.
The largest part of the new infrastructure would be acquisition of additional storage capacity through the Halligan
Water Supply Project. The additional storage at an enlarged Halligan Reservoir would meet a large portion of the
projected future demands by storing existing water rights (and water rights to be acquired in the future) during wet
times for use during dry times.
Other infrastructure that is projected to be needed by 2065 includes being part of facilities required to fully utilize
the Utilities’ recently changed Water Supply and Storage Company shares and potential future measuring devices
and by-pass facilities on the Poudre River as part of requirements for utilizing some of the Utilities water rights.
Utilities also projects a longer term need (by 2065) for some additional water rights to complement the additional
storage capacity.
Adding the new infrastructure and water rights to the water supply portfolio will increase the Utilities’ firm yield
about 7,800 acre-feet, from the existing firm yield of 30,800 acre-feet to about 38,600 acre-feet. This boost in firm
yield will meet the expected future growth for the Utilities water service area mentioned above. The new
February 14, 2017 Page 6
infrastructure is estimated to cost approximately $63.9 million and the additional water rights about $25.5 million,
both of which include a 25 percent contingency and total about $89.4 million.
Other Costs for Increasing Firm Yield
In addition to the new infrastructure and water rights mentioned above, future Utilities customers will benefit from
the existing water supply portfolio. Alone, acquiring the new infrastructure and water rights mentioned above
would not provide adequate water supplies needed for those future customers without use of the existing water
supply system. Also, the future water supply needs for new development are being reduced by leveraging the
capacity in the existing water rights system that is largely the result of effective water conservation from existing
customers. In addition, new customers will have an impact on the existing water supply system through its
increased use. These factors justify a partial “buy-in” to the existing system. Adding a “buy-in” charge for the
future customer’s use of a portion of the water supply system will reduce future costs associated with upkeep of
the water supply system, part of which results from development. Funds raised by this “buy-in” portion of the
impact fee also ensures that a portion of the Utilities Water Fund reserves are replenished for water system
improvements that help to reduce future rate increases for all customers by offsetting the impacts from
development (e.g., helping to recover costs for the recent $8 million Michigan Ditch tunnel project).
Adding the new infrastructure and water rights will increase the Utilities’ water supply firm yield from 30,800 to
38,600 acre-feet. This 7,800 acre-foot increase is about 20 percent of the future firm yield. A reasonable method
of determining the portion of the existing portfolio used by future development would be to assume they use the
same proportion (about 20 percent) of the existing firm yield of 30,800 acre-feet (or about 6,200 acre-feet).
Applying the long-standing CIL rate of $6,500 per acre-foot to the approximate 6,200 acre-feet, results in a value
of the portion of the existing portfolio that can be utilized by new development of about $40.5 million. This method
minimizes the buy-in cost by only considering a certain portion of the water supply system (the most recently
acquired ditch company shares) and does not factor in the higher value of other portions of the system (such as
CBT units or senior water rights - all of which will be used by new development).
Combining the costs of the new infrastructure and water rights needed with the value of the existing water supply
portfolio gives the total cost to increase the firm yield for new development (or redevelopment) of approximately
$129.9 million.
Cash Only Considerations
It is imperative that the RWR become a “cash only” system. This would mean no longer accepting water rights to
meet the RWR. However, the existing City-issued water certificates, as well as credits from previously satisfied
RWR, will still be accepted.
This cash only system would recognize the importance of acquiring additional storage capacity (which cannot be
turned in to meet the RWR), since such storage capacity increases our supplies by making existing (and future)
water rights available during dry times. Utilities will need to focus on specific water rights in the future to avoid
inefficient rights that are ineffective in our water supply system. In a cash only system, water rights could still be
purchased by Utilities and focus would be given to the best water rights for our water supply system. It should be
noted that Utilities plans to focus use of the cash received on infrastructure first (particularly additional storage),
since it efficiently and economically provides for reliable water supplies. In addition, accepting cash only would
provide flexibility to pursue other water supply options in the future, which could include regionally collaborative
projects.
Cash-in-Lieu (CIL) Rate Changes
BBC Research and Consulting (“BBC”), which has expertise in fee and rate analyses, was hired to review the
RWR system and the CIL rate. Utilities took the information provided by BBC to consider options for changes to
the RWR system and CIL rate. Their attached report (Attachment 5) shows the results of their findings.
As part of their study, BBC was asked to evaluate the value of the Utilities’ water supply portfolio. BBC did this by
considered an equity buy-in approach for a CIL rate adjustment, where they valued the Utilities existing and future
water supply system to be worth between $1.3 and $1.5 billion. Dividing that total system value by the future firm
February 14, 2017 Page 7
yield of the water supply system of approximately 38,600 acre-feet determines the equity buy-in value of the water
supply system. Using the low end of the total system value ($1.3 billion) results in an equity buy-in amount of
about $33,800 per acre-feet of RWR. This would be an amount to “plug into” the Utilities water supply system and
approximates what it would cost to acquire those supplies today.
BBC also helped Utilities consider other approaches for a CIL rate adjustment. The other main option was an
incremental cost approach, which considers only the costs of future water supply needs. Because the existing
water rights portfolio includes water rights which will be more effectively utilized through the development of water
storage and thereby will provide some water to future growth, this approach does not accurately reflect the total
costs for development and would under collect the anticipated cost of developing the required water supply
system.
Ultimately, BBC helped Utilities identify a modified buy-in or hybrid approach that combined elements of the equity
buy-in approach and an incremental cost approach. This hybrid approach involves looking at the value of existing
water supply portfolio (as discussed above), the costs of future water supply needs and dividing this cost by the
firm yield those future water supplies provide. Using the total costs of approximately $129.9 million, divided by the
additional 7,800 acre-feet of firm yield provided, results in a hybrid approach value of about $16,700 per acre-foot
of RWR.
Principles of Impact Fees
As staff investigated potential options for changes to the RWR system and the CIL rate, the following principles of
impact fees for new development or redevelopment were followed
Growth should pay its own way. This means the impacts of the development should be paid for by the
development and not by existing ratepayers via increased rates.
The impact fee should charge only the cost of mitigating the impact of the development on current customers.
For example, setting the CIL to the market value of local water rights could result in charging more than is
needed.
Adding the development should be done while maintaining the current level of service, with little to no impact
to existing rate-paying customers. For example, reducing the drought tolerance level for existing customers by
utilizing water made available through water conservation to new development could impact the level of
service for existing customers.
RWR and CIL Rate Changes: Options Explored
Several options for changing the RWR system and the CIL rate were explored. The criteria used in considering
these options included whether the option met the principles of impact fees (as explained above), was financially
sustainable, and was defensible. Financial sustainability means that it will generate adequate funds to acquire the
future water supply needs of the development, as well as having a reasonable and easily reproducible
methodology for acquiring the funds. Lastly, defensibility is important to avoid potential risks associated with the
methodologies used in any option.
The following is a brief description of the different options or approaches that were investigated for changing the
RWR system and CIL rate, including whether the option met the criteria mentioned above. With the exception of
the first option (Status Quo), all options include going to a cash only RWR/CIL system.
Status Quo: This option would involve not changing anything, including the RWR calculations, the current $6,500
CIL rate or going to a cash only system. This option does not meet any of the criteria since it does not generate
adequate funds, it burdens existing customers to pay for future needs, and it asks for more water (RWR) than
development needs.
Existing RWR, Adjust CIL: This option would involve leaving the RWR calculations the same and adjusting the
CIL rate by dividing the costs of our total future needs by the projected RWR we expect. Although this option
meets the financially sustainable criteria by generating the necessary funds for acquiring the future water supply
February 14, 2017 Page 8
needs mentioned above, it does not meet the other criteria since it asks for more water (RWR) than development
needs.
Equity buy-in approach: This option would involve adjusting the RWR calculations as recommended above and
adjusting the CIL rate to the equity buy-in amount of $33,800 as explained above. Although this option partially
meets the financially sustainable criteria by generating the necessary funds for acquiring the future water supply
needs mentioned above, it is based on a replacement cost of the entire water supply system.
Split fee approach: This option would also involve adjusting the RWR calculations as recommended above. This
option would involve creating a new, additional impact fee for the necessary infrastructure needed for future water
supplies, along with the current RWR fee for the water rights needed (or available to developers through existing
City water certificates or credits). A variation of this option (termed a Water Right Utilization Fee) was presented
to City Council during a September 24, 2013 work session. Although this option would meet most of the criteria, it
potentially would create disputed issues with the use of some of the City’s water certificates and was thus not
considered further.
Incremental cost approach: This option involves adjusting the RWR calculations as recommended above and
adjusting the CIL rate based on only the incremental costs to acquire the future water supply needs. However,
because of the City’s outstanding water certificates and credits, this approach does not recognize the value of
these credits to the new development and also would not generate adequate funds.
Hybrid approach: This option involves adjusting the RWR calculations as recommended above and adjusting the
CIL rate based as a hybrid of the incremental costs to meet the future water supply needs, along with a “buy-in”
charge to future customers for the value of a portion of the Utilities’ existing water supply portfolio. By collecting
sufficient revenue to meet future water supply needs associated with this growth and buying into the existing
water supply system for the use of water being made available through water conservation that helps pay for the
additional impacts to the existing system from new customers, this option meets all the criteria used. Thus it is the
recommended option.
Proposed Changes to the RWR and CIL Rate
Given the information provided above, and consulting with BBC on various aspects of the RWR system and CIL
rate, the best option is to use a hybrid approach. This approach would include changing the RWR calculations as
suggested above. The CIL rate for this hybrid approach would be $16,700 per acre-foot of RWR. This CIL rate
can be compared with about $50,000 per acre-foot of firm yield from the CBT project or with the full equity buy-in
amount of $33,800 discussed above.
It should be noted that the changes in the CIL rate are a significant shift from the past CIL methodology, which
just looked at the incremental cost of acquiring water rights. In the future, when there may be no need for
acquiring additional water supplies or infrastructure, we would likely switch to an equity buy-in approach for the
CIL rate similar to the current Utilities Plant Investment Fee (PIF) structure. The recommended hybrid approach is
an interim transition from an incremental to an equity buy-in approach.
RWR/CIL Comparisons
Table 3 shows information for the status quo (no changes) and the proposed hybrid approach, including the
assumed RWR amounts, CIL rates and cost for typical developments. Although the proposed changes to the
RWR schedules and CIL rates are related to impact fees specific to the Utilities water service area, a comparison
with other northern Colorado water providers for single family homes and 1-inch taps are provided in Figures 1
and 2 (for illustrative purposes only).
February 14, 2017 Page 9
Table 3 - Fort Collins Utilities Raw Water Requirements (RWR) for Typical Developments
Development Type Status Quo
(CIL=$6,500/AF)
Hybrid Approach
(CIL=$16,700/AF)
Change from
Status Quo (%)
Single family, 4br, 6,000 sq ft lot
Raw Water Requirement, AF: 0.66 0.54 -19.0%
Total Cost, $: $4,309 $8,970 108.2%
Multi-family, 100 units, 3.4 acres
Raw Water Requirement, AF: 42.49 23.33 -45.1%
Total Cost, $: $276,210 $389,674 41.1%
Unit Cost, $/unit: $2,762 $3,897 41.1%
Commercial Tap: 0.75"
Raw Water Requirement, AF: 0.90 0.90 0.3%
Total Cost, $: $5,850 $15,070 157.6%
Commercial Tap: 1.0"
Raw Water Requirement, AF: 3.00 2.27 -24.5%
Total Cost, $: $19,500 $37,836 94.0%
Commercial Tap: 1.5"
Raw Water Requirement, AF: 6.00 4.72 -21.3%
Total Cost, $: $39,000 $78,877 102.2%
Commercial Tap: 2.0"
Raw Water Requirement, AF: 9.60 7.91 -17.6%
Total Cost, $: $62,400 $132,104 111.7%
February 14, 2017 Page 10
Figure 1
$4,300
$9,000
$11,800
$13,000
$13,200
$14,200
$25,000
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000
Status Quo
Hybrid Approach
Loveland
NWCWD
Greeley
ELCO
FCLWD
Cost, rounded to nearest $100 ($)
Water Supply Costs for Typical Single Family Home in Northern
Colorado
Figure 2
$19,500
$30,600
$37,800
$62,500
$64,000
$101,100
$105,000
$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000
Status Quo
NWCWD
Hybrid Approach
FCLWD
Greeley
ELCO
Loveland
Cost, rounded to nearest $100 ($)
Water Supply Costs for 1" Commercial Taps in Northern Colorado
Future RWR/CIL Adjustments
It is recommended that the CIL rate be reviewed every two years, along with the other City biennial fee review
process, and adjusted as needed to reflect changes to construction costs, water rights and projected RWR
(related to growth projections).
February 14, 2017 Page 11
It is recommended that the RWR schedules should be reviewed every 5 to 7 years and changed if necessary,
since changes to average water use are usually the result of long-term water conservation and thus less volatile
than the factors underlying the CIL rate. This review would assess any potential changes in consumption,
investigate the appropriateness of predictor variables, and if necessary, reflect any changes in updated equations.
It is also recommended to utilize the previous 10 years of data when performing these updates.
Affordable Housing Impacts
Although Utilities needs the proposed changes to the RWR and CIL rate to develop adequate water supply for
future development, it is recognized that these changes will increase the overall cost of housing within the Utilities
water service area. These cost increases affect both Affordable Housing projects (as defined in City Code) and
the affordability of housing in Fort Collins. According to the Social Sustainability Department, about 95 percent of
future Affordable Housing projects will be multi-family. Although the costs for all housing (including Affordable
Housing projects) in the Utilities water service area will increase with the proposed changes, the cost increases
for these projects are diminished by the 39 percent reduction in the RWR calculation (for volume of water
required). Utilities staff will be part of an internal task force being created by the Social Sustainability Department
to analyze and address fees and housing affordability.
Outreach
Utilities staff presented the proposed changes to the RWR and CIL rate to the Water Board on October 6, 2016.
Based on input from their meeting, Utilities staff made some changes to the proposal and postponed an October
25, 2016 City Council work session until after presenting to the Council Finance Committee and to consider timing
with multiple rate changes occurring at the City (which will also be discussed during the February 14 work
session).
Besides the Water Board meeting in October, more recent outreach has included presenting the proposed
changes to:
Week of January 23: Many of the ditch companies (during their annual stockholder meetings) from which
Utilities has historically accepted shares for dedication toward meeting the RWR;
January 27: Fort Collins Chamber of Commerce
February 8: Northern Colorado Home Builders Association (did not occur before this AIS)
Various: contact with several local developers and water right holders
The input gathered so far has mainly included concerns about the increased costs to housing in Fort Collins, not
understanding the existing water system portion of the CIL rate, and the effect a cash only system will have on
local water right values. Staff is currently working on scheduling other presentations for gathering additional input
from stakeholder groups like the Fort Collins Board of Realtors and Downtown Development Authority. Also,
similar outreach to City boards and commissions such as the Water Board, Economic Advisory Commission, and
the Affordable Housing Board will be conducted based on the direction given by Council. The input gathered from
the outreach efforts will be provided as part of the final City Council actions that will be required for adoption of
changes.
STAFF RECOMMENDATION
Utilities staff recommends the following changes:
Adjust Raw Water Requirement (RWR) schedules to reflect recent (lower) water use
o Use number of bedrooms for indoor component of residential schedule
Adjust the Cash-in-Lieu (CIL) rate per a hybrid cost approach
o Increase CIL rate to $16,700 per acre-foot of requirement
Accept cash only (and existing City-issued water certificates and credits) for RWR satisfaction
Review and adjust (if necessary) the CIL rate biennially
Review and adjust (if necessary) the RWR schedules every 5 to 7 years
February 14, 2017 Page 12
In addition, it is recommended the name of this Utilities development fee be change in City Code from Raw Water
Requirements to “Water Supply Requirements”, since developing adequate and reliable water supplies requires
more than just acquiring “raw water”.
Implementation Alternatives
The following are three potential alternatives to implementing the recommended changes:
Adopt changes to RWR and CIL rate and implement immediately
Adopt changes to RWR and CIL rate, but delay implementation by a few months
Adopt changes to RWR and CIL rate, but delay implementation by several months
NEXT STEPS
Staff will consider City Council input and conduct additional public outreach prior to returning to City Council for
final approval of the changes to the RWR and CIL, which is likely to occur in the next few months. The ongoing
discussions with the surround Districts will continue and Utilities will be part of the Affordable Housing task force
mentioned above.
ATTACHMENTS
1. Fort Collins Area Water Districts Map (PDF)
2. Residential RWR Schedule (PDF)
3. Non-Residential RWR Schedule (PDF)
4. Water Rights and Conversion Factors (PDF)
5. BBC Research Memo re: Cash-in-Lieu charges, February 7, 2017 (PDF)
6. Glossary of Water Resources Terms (PDF)
7. Powerpoint presentation (PDF)
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Utilities
electric – stormwater – wastewater - water
700 Wood St.
PO Box 580
Fort Collins, CO 80522
970.221.6700
970.221.6619 – fax 970.224.6003 TDD
utilities@fcgov.com fcgov.com/utilities
RESIDENTIAL RAW WATER REQUIREMENTS (RWR) SCHEDULE
1
Single Family, Duplex, & Multi-Family
Effective January 1, 2016
Raw water is required for the increase in water use created by new development and to ensure a reliable source
of supply in dry years. The Raw Water Requirement (RWR) formulas listed below include all residential
categories: single family, duplex and multi-family dwelling units. Irrigation taps needed for common area
greenbelts that are part of Single-Family developments are assessed water rights on a Non-Residential basis by
tap size (see Non-Residential RWR Schedule). Irrigation taps for common area greenbelts of Multi-Family
developments are not assessed additional water rights since water rights collected for the buildings include the
overall net acreage of the development which contain all lots, spaces, private streets, parking and common
areas.
When calculating the number of acre-feet of water needed to satisfy the Raw Water Requirement (RWR), select
the appropriate formula listed below. If the net acres are unknown, add the square footage of all lots together
and divide by 43,560, the number of square feet in an acre of land.
STANDARD RESIDENTIAL RWR FORMULA
RWR = Raw Water Requirement in acre-feet
Net Acres = Area of development in acres, excluding public street rights-of-way, city maintained tracts
and rights-of-way, ditches, railways or other areas typically maintained by persons other than the owner
of the premises or an agent of the owner.
RWR = 1.92 x [(.18 x Number of Dwelling Units) + (1.2 x Net Acres)]
When used for the following categories, the formula above can be simplified as shown:
Single Family: RWR = .3456 + (2.304 x Net Acres)
max. lot area 1/2 acre or 21,780 sq.ft.
Duplex: RWR = .6912 + (2.304 x Net Acres)
Multi-Family (3 units or more): RWR = (.3456 x No. of Units) + (2.304 x Net Acres)
RWR MAY BE SATISFIED BY ANY ONE, OR COMBINATION OF THE FOLLOWING:
x Water rights (stock) acceptable to the City based on current conversion factors
x City of Fort Collins water certificates
x Cash at the rate of $6,500 per acre-foot of RWR
If the Raw Water Requirement (RWR) is satisfied with water stock or city water certificates, transactions are completed at the Utilities
before a water service permit is issued. If satisfied with cash, payment is made at Neighborhood and Building Services upon issuance
of a building permit.
1 Summarized from Sections 26-129, 26-148 and 26-150 of the Code of the City of Fort Collins.
ATTACHMENT 2
Utilities
electric – stormwater – wastewater - water
700 Wood St.
PO Box 580
Fort Collins, CO 80522
970.221.6700
970.221.6619 – fax 970.224.6003 TDD
utilities@fcgov.com fcgov.com/utilities
NON-RESIDENTIAL RAW WATER REQUIREMENT (RWR) SCHEDULE
1
For Water Services Not Included in the Residential Category
Effective January 1, 2016
Raw water is required for the increase in water use created by new development and to ensure a reliable source of supply in dry years.
Non-residential service shall include without limitation all commercial, industrial, public entity, group housing, nursing homes,
fraternities, hotels, motels, commonly owned areas, club houses, and pools.
The minimum Raw Water Requirement (RWR) for water services up to 2-inches in diameter is shown below.
The RWR for services 3-inch and larger are based on the applicant’s estimate of actual use, provided that such
estimate is first approved and accepted by the General Manager. Options for satisfying the RWR include
turning over water rights to the City in the form of water stock or city water certificates, OR paying the
equivalent cash-in-lieu-of amount.
Equivalent Cash Minimum
Meter Size Minimum RWR Payment at Annual Allotment
(inches) (acre-feet) * $6,500/acre-foot (Gallons/Year)
3/4 0.90 or $ 5,850 293,270
1 3.00 or $ 19,500 977,550
1-1/2 6.00 or $ 39,000 1,955,110
2 9.60 or $ 62,400 3,128,170
3 and above Based on use
* acre-foot = 325,851 gallons of water
RWR MAY BE SATISFIED BY ANY ONE, OR COMBINATION OF THE FOLLOWING:
x Water rights (stock) acceptable to the City based on current conversion factors
x City of Fort Collins water certificates
x Cash at the rate of $6,500 per acre-foot of RWR
If the RWR is satisfied with water stock or city water certificates, transactions are completed at the Utilities before a water service
permit is issued (refer to schedule of water rights and conversion factors acceptable to the City). If the RWR is to be satisfied with
cash, payment is made at Neighborhood and Building Services upon issuance of a building permit.
ANNUAL ALLOTMENT/SURCHARGE (related to Monthly Billing)
The RWR establishes an annual gallon allotment for each tap and subsequent monthly water account. A surcharge of $3.06 per 1,000
gallons will be assessed on a customer’s monthly water bill when an account uses more water in a given calendar year than the gallons
allotted for a particular tap size. The surcharge rate is billed in addition to the customer’s regular monthly tiered water rate. Once the
annual allotment has been exceeded and the water surcharge appears on an account, the surcharge will continue to be billed each
month through the end of that calendar year. Additional water stock, city certificates, or cash may be turned in to increase the annual
allotment.
1 Summarized from Sections 26-129, 26-149, and 26-150 of the Code of the City of Fort Collins.
ATTACHMENT 3
Utilities
electric – stormwater – wastewater - water
700 Wood St.
PO Box 580
Fort Collins, CO 80522
970.221.6700
970.221.6619 – fax 970.224.6003 TDD
utilities@fcgov.com fcgov.com/utilities
WATER RIGHTS AND CONVERSION FACTORS ACCEPTED BY THE CITY
FOR SATISFACTION OF RAW WATER REQUIREMENTS (RWR)
Effective January 1, 2016
Arthur Irrigation Company (see Note) 3.442 Acre-Feet / Share
Larimer County Canal No. 2 (see Note) 42.687 Acre-Feet / Share
New Mercer Ditch Company (see Note) 30.236 Acre-Feet / Share
North Poudre Irrigation Company 5.00 Acre-Feet / Share
NCWCD Units (CBT – Colo. Big Thompson) 1.00 Acre-Feet / Unit (share)
Pleasant Valley and Lake Canal Company 39.74 Acre-Feet / Share
Warren Lake Reservoir Company 10.00 Acre-Feet / Share
City of Fort Collins Water Certificates Face Value of Cert. (in acre-feet)
City of Fort Collins Josh Ames Certificates 0.5625 Acre-Feet per certificate or
each certificate can satisfy 1/8 acre
of land
Note:
The City does not accept treasury shares (inactive shares held by these companies) as of December 18, 1992. A provision in the final
decree of Water Court Case No. 92CW129 prohibits the City from acquiring such treasury shares and using them for municipal
purposes.
February 7, 2017
Mr. Lance Smith and Mr. Donnie Dustin
Fort Collins Utilities
Re: Fort Collins Utilities Cash-in-Lieu Charges for Water to Serve New Development
Dear Mr. Smith and Mr. Dustin:
Fort Collins Utilities (FCU) retained BBC Research & Consulting (BBC) to review its cash-in-lieu
requirements for providing water service to new developments. BBC met with City of Fort
Collins legal staff, and with FCU’s water resource staff, to discuss this issue and gather
information. We also reviewed data and documents provided by water resources staff.
This letter summarizes BBC’s analysis and evaluation based on this information.
BBC’s study was intended to help FCU answer four fundamental questions:
What is the appropriate method for establishing FCU’s cash-in-lieu requirements?
How valuable are FCU’s water resources (e.g. water rights and raw water facilities)?
How would the answers to these questions change FCU’s cash-in-lieu requirements?
How can FCU update its cash-in-lieu charges in future years?
The remainder of this letter provides BBC’s answers to each of these questions,
Method for establishing the cash-in-lieu requirement. Based on BBC’s 2015
research for the City of Greeley, FCU currently has one of the lowest, if not the lowest, cash-in-
lieu charges for water supplies to serve new residential development among the larger and
faster growing communities in northern Colorado (see Appendix).
However, as BBC discussed with the City attorney’s office, the legal framework for impact fees
—such as cash-in-lieu charges — is clear. These fees or charges cannot be based on an
evaluation of what other utilities, even in the same “neighborhood”, are charging. Instead, it
must be based on a fair apportionment of the utility’s own costs to serve new development.
ATTACHMENT 5
PAGE 2
Courts have recognized two approaches to establishing impact fees such as cash-in-lieu charges
— the equity buy-in approach and the incremental cost approach.
Equity buy-in approach. This approach is often used in circumstances where the public entity
or utility has available capacity to serve at least a portion of the needs required by new
development. In such circumstances, the buy-in approach places an overall value on the existing
system, and then calculates the share of that system that will be used by new development to
determine the buy-in charge.
In most years, FCU appears to have enough water rights to be able to serve foreseeable future
development. However, to meet its buildout water demands under drought conditions, FCU will
also require the “firming” that the proposed storage project would provide, along with other
infrastructure improvements and selected additional water rights to optimize the water
resource portfolio.1
Given FCU’s specific circumstances, the appropriate method for establishing potential cash-in-
lieu charges under the buy-in approach is to estimate the value of the combined water rights
and storage system when the system is fully completed (e.g., after the proposed storage project
and other infrastructure projects are developed and remaining water rights are purchased). The
ultimate value of the system can then be apportioned between new development and existing
customers based on the firm yield of the system and the firm yield requirements of the
customers. This approach implicitly recognizes that both existing and new customers will
benefit from the new storage project and other additions to the water resource portfolio, as well
as from the existing water rights portfolio, and treats these customers in the same fashion. It
also avoids the need for a complicated, and potentially controversial, apportionment of the
values of existing and new water supply components between new and existing customers.
Incremental cost approach. One important disadvantage of the equity buy-in approach,
specific to FCU’s situation, is that it may raise more money than is actually needed for the future
projects and water rights acquisitions required to complete the water supply system for
buildout demand. As discussed in greater detail later in this report, this situation arises because
the future projects FCU is developing are highly efficient (from an economic standpoint) and can
provide additional firm yield at a lower cost per acre foot than the existing system can currently
deliver.
Under these circumstances, FCU may want to consider establishing its cash-in-lieu charges
based on an incremental cost approach, the most common alternative to the equity buy-in
approach in setting impact-type fees. The incremental cost approach considers only the
additional cost that a public entity (or utility) must pay in order to increase its capacity to serve
1 In addition to the enlargement of Halligan Reservoir (or similar), FCU anticipates participating with other municipalities in a
management project for the use of converted Water Supply and Storage Company shares, potential future measuring devices
and by-pass facilities on the Poudre River, and obtaining some additional water rights.
PAGE 3
new development while maintaining the same level of service that it currently provides to its
existing customers.
Estimated value of FCU’s water resource system. From the standpoint of this
analysis, there are two basic components in the water resource portfolio required to serve FCU’s
existing customers and new development: FCU’s existing water rights and storage facilities, and
the proposed new storage project and other anticipated projects and water rights needed to
complete the water supply system.
Estimated minimum value of FCU’s existing water resource portfolio. As detailed in
Figure 1 on the following page, BBC’s minimum estimate of the current value of Fort Collins
existing water rights and storage facilities is approximately $1.2 billion. This minimum value
estimate is reasonably consistent with the value of “around $1 billion” cited in the 2012 Update
to the Water Supply and Demand Management Policy Report.2
BBC is familiar with the current active markets for three of the larger water rights holdings in
FCU’s portfolio – Colorado-Big Thompson Units (C-BT), shares in the North Poudre Irrigation
Company (NPIC), and shares in the Water Supply and Storage Company (WSSC). Based on recent
market values for these supplies, BBC estimates the current market value for this portion of
FCU’s water rights portfolio to be about $800 million.
Most of the other water rights and storage facilities in FCU’s portfolio do not have well defined
markets, and in some cases may not have been traded at all in recent years. To obtain an
estimate of the overall value of FCU’s portfolio, BBC has developed minimum and maximum
estimates of the value of these other rights and facilities based on our experience with other
water supplies used by Colorado’s Front Range communities.
The largest contributor to the remaining value of FCU’s water resource portfolio (excluding the
well-defined sources described previously) is its Poudre River direct flow rights. Most of these
are very senior water rights that yield nearly as much supply during dry years as under average
or “normal” hydrologic conditions. Senior direct flow rights such as these are very seldom, if
ever, traded – though there would undoubtedly be a substantial market for them if they became
available. To develop a minimum estimate of the value of FCU’s water rights portfolio, we have
conservatively assumed a value for these rights of $20,000 per acre foot of average yield –
corresponding to a total value of $226 million for these rights.
FCU’s other water rights and facilities that can currently contribute to its treated water supply
include its Reuse Plan arrangement with Platte River Power Authority, its Joe Wright-Michigan
Ditch System, its shares in the Pleasant Valley & Lake Canal Company and the Chaffee Ditch, and
shares in a number of other irrigation systems sometime referred to as the “South Side Ditches.”
2 See page 28 of the 2012 report.
PAGE 4
These systems include the Arthur Irrigation Company, Larimer County Canal No. 2, the New
Mercer Ditch Company, and the Warren Lake Reservoir Company.
While BBC is not aware of any recent transactions involving any of these supply sources, we
believe the value of the supply from the Reuse Plan may be roughly equivalent to the value of
shares in the recent Windy Gap Firming Project, or approximately $25,000 per acre foot of yield.
The shares in the Joe Wright-Michigan Ditch System are firmed by storage, and likely are worth
at least $10,000 per acre foot. We believe a conservative, minimum value estimate for the
remaining treatable water supplies would be about $5,000 per acre foot of average annual yield.
Combining the various minimum value estimates described above, BBC believes a current,
minimum value for FCU’s existing water resource portfolio is about $1.23 billion.
Estimated minimum value of anticipated additions to water resource portfolio. As
discussed previously, FCU anticipates the completion of several infrastructure projects and the
purchase of selected additional water rights to complete the system and serve buildout
demands. FCU projects the expansion of Halligan Reservoir will ultimately cost approximately
$46.2 million, FCU’s participation in the WSSC management project is roughly estimated to cost
about $2.6 million, development of future measuring devices and by-pass facilities on the
Poudre River is anticipated to cost approximately $2.3 million and the future water rights
purchases are projected to cost about $20.4 million. These cost estimates for future additions
total approximately $71.5 million. To develop the minimum estimate of these future costs, BBC
removed contingency factors previously estimated by FCU from the cost projections.
Adding these projected costs for additions to the water supply system, BBC’s minimum estimate
of the current value of the ultimate system is about $1.31 billion.
PAGE 5
Figure 1. Estimated Minimum Value of FCU’s Water Resource System
Notes:
a/ Current market price -- high by historic standards.
b/ Latest data from FCU. Generally trades at value of embedded C-BT (3 units, after shrink).
c/ Approximate 2015 value, may be higher now.
d/ Min. estimate of value. These types of WR don't trade, but are very firm.
e/ Firm/reusable supply. Value est. based on WGFP.
f/ Value includes storage and firming.
g/ No known market for most of these. This is an estimated minimum value. Includes PV&LCC and Chaffee Ditch.
h/ Latest estimate from FCU, excludes contingencies.
Volume Average
Supply Source (Shares) Yield per Share per AF Total Value
Current System in 2016
Known Market Values
C-BT 18,855 14,330 $25,000 $32,894 $471,375,000 a/
NPIC 3,564 19,850 $88,000 $15,799 $313,610,000 b/
WSSC 27 2,240 $600,000 $7,144 $16,002,000 c/
Subtotal 36,420 $21,993 $800,987,000
Estimated Minimum Market Values
Poudre River Direct Flow 11,300 $20,000 $226,000,000 d/
PRPA Reuse Water 2,310 $25,000 $57,750,000 e/
Joe Wright/Michigan Ditch 5,500 $10,000 $55,000,000 f/
Other Sources Available for
Treatment 18,970 $5,000 $94,850,000 g/
Total Minimum Estimated Value
for Current System 74,500 $16,572 $1,234,587,000
Future System Additions
Future Water Rights Acquisitions $20,400,000 h/
Infrastructure Projects
Proposed Firming Project (Halligan) $46,200,000 h/
WSSC Management Project $2,600,000 h/
River By-pass Facilities $2,300,000 h/
Minimum Value for Future System
Additions $71,500,000
Minimum Estimated Value for
Completed System $1,306,087,000
Estimated Value
PAGE 6
Potential maximum value of FCU’s water resource portfolio. To estimate the current,
maximum value of the portfolio, BBC made the following modifications to the previous
minimum value assumptions. First, we assumed the Poudre River direct flow rights could be
worth as much as $30,000 per acre-foot, approximately on par with the current value of C-BT
supplies on an average annual yield basis. We added 25 percent to the minimum value estimates
for supplies from the PRPA Reuse Plan and Joe Wright/Michigan Ditch System. We also assumed
a maximum value for the collection of other water rights and facilities that provide water
available for treatment (excluding C-BT, NPIC and WSSC supplies) of $7,500 per acre foot of
average annual yield (rather than the $5,000 per acre foot estimate used to derive the minimum
value estimate).
For the future system additions, we included a 25 percent contingency factor on the projected
costs for infrastructure and water supply additions to the water resource portfolio (e.g. Halligan
Reservoir expansion, WSSC Management Project, river measurement and by-pass facilities and
selected water rights acquisitions).
With these modified assumptions, we derive a potential maximum value for the ultimate water
resource portfolio of about $1.51 billion, as shown in Table 2.
PAGE 7
Figure 2. Estimate Range of Potential Values for FCU’s Water Resource System
Value per acre-foot of firm yield. Figure 3 summarizes the value estimates for Fort Collins
water resource portfolio, and converts those estimates into values per acre-foot of firm yield.
The anticipated additions to the portfolio are expected to add substantially to the firm yield of
the system — increasing total firm yield from about 30,800 AFY to 38,600 AFY — at a
comparatively low cost. The current estimate of the ultimate value of the completed system is
between $33,800 and $39,200 per acre-foot.
Supply Source Minimum Maximum Difference
Current System in 2016
Known Market Values
C-BT $471,375,000 $471,375,000 $0
NPIC $313,610,000 $313,610,000 $0
WSSC $16,002,000 $16,002,000 $0
Subtotal $800,987,000 $800,987,000 $0
Other Water Resources
Poudre River Direct Flow $226,000,000 $339,000,000 $113,000,000
PRPA Reuse Water $57,750,000 $72,187,500 $14,437,500
Joe Wright/Michigan Ditch $55,000,000 $68,750,000 $13,750,000
Other Sources Available for $94,850,000 $142,275,000 $47,425,000
Treatment
Total for Current System $1,234,587,000 $1,423,199,500 $188,612,500
Future System Additions
Proposed Firming Project (Halligan) $46,200,000 $57,750,000 $11,550,000
WSSC Management Project $2,600,000 $3,250,000 $650,000
River By-pass Facilities $2,300,000 $2,875,000 $575,000
Future Water Rights Acquisitions $20,400,000 $25,500,000 $5,100,000
Totals for Completed System $1,306,087,000 $1,512,574,500 $206,487,500
Estimated Range of Values
PAGE 8
Figure 3. Range of Value and Estimated Value per Acre-foot of Firm Yield
Potential Cash-in-Lieu Charges for New Development. BBC reviewed FCU’s
current approach for establishing cash-in-lieu fees for new development and developed
recommendations regarding potential modifications.
FCU’s current approach. FCU currently determines the raw water requirements (RWR) for
new residential development based on a formula established in the 1980s. That formula, which
can be applied to detached single family residential developments, duplexes or multifamily
developments, is:
RWR = 1.92 x [(.18 x Number of Dwelling Units) + (1.2 x Net Acres)]
For single family residential developments, the formula simplifies to:
RWR = .3456 + (2.304 x Net Acres)3
The RWR for commercial developments is based on meter size, with specified RWR volumes (or
corresponding cash-in-lieu charges) for commercial properties that will use ¾ inch to 2 inch
taps. RWR for facilities requiring taps larger than 2 inches are determined through a case-by-
case evaluation.
BBC has focused primarily on the RWR for single family residential development. At least some
of our observations, however, may also apply to the RWR for other types of development.
Conceptual approach to establishing RWR. During a previous assignment for the City of
Greeley in 2015, BBC reviewed the residential water dedication and cash-in-lieu requirements
for the 22 of the largest and fastest growing municipal water providers in the northern Front
3 The formula is subject to the restriction that the maximum lot area not exceed ½ acre.
Current System Anticipated Additions Completed System
Estimated Value
Minimum $1,234,587,000 $71,500,000 $1,306,087,000
Maximum $1,423,199,500 $89,375,000 $1,512,574,500
Firm Yield (AFY) 30,800 7,800 38,600
Value per AFY
Minimum $40,084 $9,167 $33,836
Maximum $46,208 $11,458 $39,186
PAGE 9
Range. That review, which included FCU, found that 19 of the 22 communities impose a water
dedication requirement and/or a cash-in-lieu fee for water resources for new residential
developments in their service areas.4
While the volume of water required for new development varied among the communities
included in BBC’s prior evaluation, there were three basic methods of determining the amount
of water to be dedicated for residential development (and/or the corresponding cash-in-lieu
charge).
Requirement based on overall gross or net acreage of new development. This was the
simplest approach for establishing the amount of water to be dedicated (or the total cash-
in-lieu charge). Greeley, Longmont and Windsor use this approach.
Requirement based on number of dwelling units or taps. This method, which does not
account for differences in lot size5, was the most common approach for establishing the
water dedication/CIL volume. Northern Colorado water providers using this approach
included Broomfield, Dacono, Eaton, Erie, Evans, Fort Collins-Loveland Water District, Fort
Lupton, Frederick, Johnstown, Lafayette, Left Hand Water District and Severance.
Requirement based on number of units and lot size. FCU, along with three other northern
Colorado water providers, factor in both the number of dwelling units and their lot size to
determine the water dedication requirements. Apart from FCU, the providers using this
approach were Firestone, Loveland and North Weld County Water District. Two of the
providers (Firestone and North Weld County Water District) specify three or more ranges
of lot sizes with differing water dedication requirements for each range. Loveland uses a
formula more similar to FCUs, but with different coefficients for lots below or above 15,000
square feet.
Fort Collins has recently decided to switch from the number of units to the number of bedrooms
in establishing their water dedication requirements. By considering the number of bedrooms
and lot sizes, the approach used by FCU (similar to the other three providers mentioned in the
last bullet above which include number of units and lot size) explicitly recognizes the separate
indoor and outdoor aspects of residential water use. In our view, this approach to determining
the water dedication requirement is the most conceptually sound of the three basic methods.
4 The three communities that do not levy a specific water dedication/cash-in-lieu fee were Boulder, Central Weld County
Water District and Louisville. However, these three communities also levied the highest plant investment fees (PIFs) for new
residential water service in the region – suggesting they are recovering water resource-related costs through their PIFs.
5 Some of these providers do distinguish between 5/8” taps and ¾” taps, which could be associated with differences in lot size.
PAGE 10
Findings and recommendations. BBC believes FCU should revise its cash-in-lieu charges at
this time, and makes the following recommendations.
The water usage assumptions (developed more than 20 years ago) should be adjusted to reflect
changes in water use per account. The formulas that FCU uses to establish RWR and cash-in-lieu
requirements are theoretically sound. The “water supply factor” (the 1.92 term in the RWR
formulas) likely remains appropriate to provide a contingency for increased demand under
drought conditions, treatment and distribution water losses and other factors.
Note: FCU has undertaken this analysis and determined more recent water use requirements for
different types of uses. For example, single family residential requirements appear to have declined
by at least 25 percent, relative to the assumptions built into the current RWR equations.
FCU should convert to a cash only system for providing water resources for new development.
FCU has specific plans for completing its water resource system, and these plans are highly
efficient from an economic standpoint (as shown previously in Figure 2). What FCU needs is
cash to pay for these plans, rather than additional water rights that do not necessarily best suit
system needs. We recognize, however, that FCU has previously provided a number of water
development credits (e.g. water certificates and credit accounts) that will need to be
accommodated.
The cash-in-lieu equivalent value should be revised. BBC believes FCU could be justified in
charging as much as the full buy-in value for the completed water system (e.g. between $33,800
and $39,200 per acre-foot of firm yield requirements). However, we also recognize that setting
the cash-in-lieu charge at this level would both represent a significant change from the current
charge and may impact economic development more severely than other approaches discussed
below.
The incremental cost approach, outlined on page 2 of this report, may be a more practicable
alternative to setting the revised cash-in-lieu value. This approach would establish the cash-in-
lieu charge at a level sufficient to simply fund the anticipated additions to the water supply
system. To implement this approach, FCU would need to estimate the raw water requirements
for future development, net of the requirements likely to be met from non-cash sources (e.g.
outstanding credits and credits for redeveloped properties). FCU would then divide the
projected costs for completing the system (between $72 and $89 million per Figure 3) by the
projected net raw water requirements to establish the cash in lieu charge per acre foot.
Inherent in the incremental cost approach is the recognition that the incremental costs are being
reduced by leveraging the excess capacity in the existing water rights portfolio that is the result
of effective water conservation from existing customers. As such, the incremental cost approach
understates the full cost of new development by not recognizing the value of the portion of the
existing water rights portfolio which will be leverage to serve such growth.
PAGE 11
To address this understatement of the full cost of new growth, FCU could also consider a
modified “buy-in” or hybrid approach. Under such an approach, the cash-in-lieu charge would
include the incremental cost of anticipated additions to the system (as described above) – along
with an additional charge to capture some of the benefit new development will also receive from
using FCU’s existing water rights and facilities. For example, FCU has estimated that new
development will use about 6,200 acre-feet of the firm yield of the existing system (prior to the
anticipated system additions). Although FCU could be justified to charge as much at the full buy-
in value of the City’s existing system (e.g., between $33,800 and $39,200 per acre-foot) for this
existing component of their system, it could consider charging less (e.g., the FCU’s historic CIL
charge of $6,500 per acre-foot), which would result in an additional charge to new development
for use of the existing water rights system of approximately $40.5 million. When added to the
incremental costs for system additions anticipated by FCU, the combined amount of revenue to
be required under this hybrid approach would be between $112.0 and $129.9 million. Based on
FCU’s updated estimate of the water requirements to serve future new development (7,800 AF),
the revised CIL charge under this version of a hybrid approach would be between $14,400 and
$16,700 per acre-foot of raw water requirements.
Figure 4. Potential Cash-in-Lieu Charges based on Alternative Approaches
Notes:
* Based on projected average RWR of 0.54 acre-feet per new home.
Updating FCU’s cash-in-lieu charges in the future. Assuming FCU implements the
modified “buy-in” or hybrid approach just described, or a similar revision to its current charges,
it will likely wish to update those charges more frequently than it has done in the past.
There are basically two fundamental elements to the proposed charge based on the incremental
or hybrid approaches discussed above — the raw water requirements (volume of water
required) and the cash equivalent value. BBC believes the raw water requirement element
should be reviewed every five to ten years to detect fundamental changes in water usage
patterns. More frequent reviews may not be productive, due to the inevitable variability in year
to year water use due to changing summer weather conditions.
"Buy-In" Incremental Modified "Buy-in"
Approach Approach or "Hybrid" Approach
Value per Acre-foot
Minimum $33,800 $9,200 $14,400
Maximum $39,200 $11,500 $16,700
Average Value per
New Home*
Minimum $18,300 $5,000 $7,800
Maximum $21,200 $6,200 $9,000
PAGE 12
The full buy-in approach, based on the overall value of FCU’s water resources, establishes the
maximum value per acre-foot that FCU could use in setting its cash-in-lieu charges. Given the
relatively high values that result from the full buy-in approach ($33,800 to $39,200 per acre-
foot, as described on page 7) compared to the expected charges that would result from the
incremental or hybrid approaches, it is not likely to be necessary for FCU to reappraise the value
of its full water resource portfolio on a regular basis. Since the price of C-BT units is the only
value in the overall water resource valuation that is routinely updated and publicly available,
FCU might require consulting assistance if and when it does decide to update the estimated
value of its overall water resource portfolio.
Fortunately, updating the cash-in-lieu charge based on the incremental or hybrid approaches is
easier than updating the estimated value of the overall water resource portfolio. Under the
incremental approach, the cash equivalent value is primarily determined by cost of future
additions to the system, divided by the raw water requirements expected to be met with cash-
in-lieu payments. The hybrid approach is determined in a similar fashion to the incremental
approach, but just adds the existing value component to the numerator of the equation. FCU is
likely to continue to update and refine the cost estimates for the Halligan Reservoir Expansion,
and other anticipated infrastructure projects, and can use these updated estimates to update the
cash-in-lieu charge as needed.
BBC believes the cash-in-lieu charge should be reviewed and approved by the City’s
policymakers on an annual basis as a matter of sound policy, but recalculation of the charge
should only be necessary if there appear to be substantial changes in raw water requirements or
the costs of completing the system.
It is worth noting that many of the other water providers in the Northern Front Range set and
adjust their cash-in-lieu charges based on the price of C-BT. While this may be appropriate for
water providers whose primary supply is C-BT, we do not believe it is an appropriate
benchmark for FCU. Further, the dwindling number of C-BT units available for transfer has
helped fuel a rapid escalation in C-BT prices in recent years, and we believe C-BT prices may
become increasingly unstable in the future as that particular source of supply becomes more
and more scarce.
Sincerely,
Douglas L. Jeavons
Managing Director
PAGE 13
Appendix –
Cost of Obtaining Residential Water Service from Northern Colorado Water Providers
(from BBC’s 2015 study for City of Greeley)
City of Fort Collins Utilities
Changes to the Utilities Raw Water Requirements
City Council Work Session
February 14, 2017
Glossary of Water Resources Terms
1-in-50 Year Drought Criterion - criterion adopted in the current Water Supply and
Demand Management Policy that defines the level of risk for the City’s water supply
system; a drought is a period of below average runoff that can last one or more years and
is often measured by its duration, average annual shortage and cumulative deficit below
the average; a 1-in-50 drought corresponds to a dry period that is likely to occur, on
average, once every 50 years; although the Poudre River Basin has several drought
periods in its recorded history, it is difficult to assess whether any of these droughts were
equal in magnitude to a 1-in-50 drought; the 1985 Drought Study developed the 1-in-50
drought used in assessing the Utilities water supply system; this drought period is six
years long and has a cumulative deficit of 550,000 acre-feet, which represents annual
river volumes that are about 70% of the long-term average for the Poudre River; see also
“Statistically Based Drought Analysis”
Acre-Foot or Acre-Feet (AF) - volume of water equal to about 326,000 gallons; one acre-
foot can supply around three to four single family homes in Fort Collins per year; for
storage comparison the maximum volume of Horsetooth Reservoir is about 157,000 acre-
feet
Active Capacity - the usable capacity of a reservoir for storage and regulation of inflows
and releases that does not include any capacity below the reservoir’s lowest outlet (which
is known as dead capacity)
Cash-in-lieu rate (CIL) - the cash equivalent of the water supply required to meet the
needs of development; see also Raw Water Requirements
Carryover - used in reference to storage; it is the ability to save water in storage for use at
a later time, most notably in following years
Change in Water Right - used to refer to changing water rights under Colorado water law
from agricultural to municipal water use; see also “Legal Return Flows or Return Flow
Obligations”
CIP - Capital Improvement Project, which typically refers to a project to improve
Utilities facilities (e.g., treatment plant capacity expansion)
Colorado-Big Thompson (CBT) Project - a Bureau of Reclamation project that brings
water from the Colorado River basin to the east side of the continental divide via a tunnel
and the Big Thompson River to several locations including Horsetooth Reservoir;
1
ATTACHMENT 6
operated by the Northern Colorado Water Conservancy District (or Northern Water); Fort
Collins Utilities currently owns 18,855 units of the 310,000 total units in the CBT project
Cubic Feet per Second (cfs) - volumetric flow rate equal to one cubic foot flowing every
second; for comparison, an average peak flow rate on the Poudre River at the Lincoln
Street gage (downtown) is around 1,900 cfs and a median winter-time low flow rate in
December at the same location is around 7 cfs
Direct Flow Rights - water rights that can be taken for direct use, as opposed to storage
rights that can be taken for later use; see also “Senior Water Rights”
DEIS or EIS - Draft Environmental Impact Statement or Environmental Impact
Statement; a report detailing the findings of the NEPA permitting process; report can be
reviewed by public for their comments which are typically addressed in a Final
Environment Impact Statement; see also “NEPA”
ELCO - East Larimer County Water District; see also “Tri-Districts”
FCLWD - Fort Collins-Loveland Water District; see also “Tri-Districts”
Firm Yield - a measure of the ability of a water supply system to meet water demands
through a series of drought years; for the Fort Collins Utilities, this means being able to
meet the planning demand level and storage reserve factor through the 1-in-50 year
drought criterion; see also “1-in-50 Year Drought Criterion”, “planning demand level”
and “storage reserve factor”
GMA - short for Growth Management Area, which is the planned boundary of the City of
Fort Collins’ future City limits
gpcd - gallons per capita per day; a measurement of municipal water use; for the Fort
Collins Utilities, gpcd is calculated based on the total annual treated water produced at
the Water Treatment Facility for use by all Water Utility customers (minus large
contractual customers and other sales or exchange agreements) divided by the estimated
population of the Water Utility’s service area and 365 days
LEDPA - Least Environmentally Damaging Practicable Alternative, which is what is
allowed to be permitted through the NEPA permitting process; see also “NEPA”
Legal Return Flows or Return Flow Obligations - refers to legal requirements when
changing water rights from agricultural to municipal use; this process requires obtaining a
decree from Colorado Water Court that involves detailed analysis of the historic
agricultural water use, including the water diversions, amount used by the crops, and the
return flow patterns of the water not used by the crops; terms in the decree to prevent
municipalities from taking more water than was historically taken and replacing return
flows in the right amount, location and time to prevent injury to other water rights
2
NEPA - National Environmental Policy Act; federal legislation that established
environmental policy for the nation; it provides interdisciplinary framework for federal
agencies to prevent environmental damage and contains “action-forcing” procedures to
ensure that federal agency decision-makers take environmental factors into account
NISP - Northern Integrated Supply Project
Northern Water or NCWCD - short for Northern Colorado Water Conservancy District
(NCWCD); Northern Water operates the Colorado-Big Thompson (CBT) Project and is
involved in several other regional water projects on behalf of their participants; see also
“Colorado-Big Thompson (CBT) Project”
NPIC - North Poudre Irrigation Company; an irrigation company that supplies water to
farmers north of Fort Collins and is the owner of all water currently stored in Halligan
Reservoir; the City currently owns about 36% of the shares in the company
NWCWD - North Weld County Water District; see also “Tri-Districts”
Planning Demand Level - level of water use (demand) in gpcd used for water supply
planning purposes that is a factor in determining the amount of water supplies and/or
facilities needed; see also “gpcd”
PIF (or PIFs) - Plant Investment Fee(s), which are one-time fees assessed on
developments for the cost of the utility infrastructure needed to serve that development
Raw Water Requirement (RWR) - requires new development to turn in water rights, a
payment of cash-in-lieu of water rights, or use of City-issued water certificates or credits
to support the water needs of that development; cash is used to increase the firm yield and
long-term reliability of the City’s supply system (e.g., purchase additional storage
capacity)
Storage Reserve Factor - refers to a commonly used engineering principle in designing
water supply systems to address short-term supply interruptions; as defined in the Water
Supply and Demand Management Policy, the storage reserve factor incorporates having
20 percent of annual demands in storage through the 1-in-50 drought which equates to
about 3.5 months of winter (indoor) demands or 1.5 month of summer demands
Senior Water Rights - refers to Colorado water law’s use of the “prior appropriation” or
priority system, which dictates that in times of short supply, earlier water rights decrees
(senior rights) will get their water before others (junior rights) can begin to use water,
often described as “first in time, first in right”
Southside Ditches - refers to the irrigation ditches that run through the City of Fort
Collins, including the Arthur Ditch, New Mercer Ditch, Larimer County Canal No. 2 and
Warren Lake Reservoir; the Pleasant Valley and Lake Canal is another ditch that runs
through Fort Collins and is sometimes considered a Southside Ditch
3
Tri-Districts - the combination of the three regional water districts East Larimer County
(ELCO), Fort Collins-Loveland (FCLWD) and North Weld County (NWCWD) Water
Districts; these districts share the same water treatment plant called Soldier Canyon Filter
Plant, which is located adjacent to Fort Collins Utilities’ Water Treatment Facility
Water Rights Portfolio - the mix of water rights owned by a water supplier; typically
includes water for direct use, as well as for storage for later use; for the Fort Collins
Utilities, includes City owned water rights, owned and/or converted shares in agricultural
rights, storage rights at Joe Wright Reservoir, and ownership in the CBT project
Water Supply Factor - refers to a multiplying factor used in the assessment of raw water
required by developers to reflect issues that tend to reduce the average yield of the water
supplies provided to a water supplier (e.g., system losses, variable demands, etc.)
WSDMP - short for Water Supply & Demand Management Policy, which provides Fort
Collins Utilities guidance in balancing water supplies and demands
Yield or Water Rights Yield - refers to the amount of water that is produced from a water
right; the yield of water rights vary from year to year depending on the amount of water
available (i.e., low or high river runoff) and the priority of the water right; see also “Firm
Yield” and “Senior Water Rights”
4
1
Changes to the Utilities Raw Water Requirements
Donnie Dustin, P.E., Water Resources Manager
City Council Work Session
February 14, 2017
HORSETOOTH
RESERVOIR
2
Water Fees
PLANT INVESTMENT
FEES (PIF)
DISTRIBUTION
WATER TREATMENT
TAP FEES (Water Meters) WATER METERS
RAW WATER
REQUIREMENTS (RWR)
Source of Supply
(water rights), which includes
Storage and Transmission
CACHE LA
WATER POUDRE RIVER
SUPPLY
HORSETOOTH
RESERVOIR
3
This work session
focuses on Utilities
water service area;
continued discussions
with other districts.
Raw Water Requirements
What are they?
• Water rights or fee paid by new development
• Amount based on use, type of development
• GOAL: generate adequate funds and water rights to
provide reliable water supply
4
Current Satisfaction of RWR
RWR can be satisfied with:
• Acceptable water rights
• Cash-in-lieu of water rights
• City certificates (credits)
• Combination
5
Market Value of Colorado-
Big Thompson (CBT) Project Units
6
0
50
100
150
200
250
300
$0
$5,000
$10,000
$15,000
$20,000
$25,000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Average Daily Use per Capita (gpcd)
Cost
Year
Colorado-Big Thompson Project Unit Price vs. Fort Collins
Utilities Use, Cash-in-Lieu Rate
C-BT Price ($/unit) FCU CIL ($/AF) FCU Average Use Per Capita (gpcd)
6
Timeline
7
Water Rights
Utilization Fee Discontinued
Water Banking
Year of Water –
Started Evaluation
of RWR Changes
Water Board and
Canceled Council
Work Session
Council
Finance
Committee
2013
2014
2015 2016
Jan.
2017
Overview
8
Changes Recommended:
• Amount of Raw Water Requirement
• Cash-in-Lieu Rate
• Accepting Cash Only
9
Amount of Raw Water Required
Amount of Raw Water Requirement
(RWR)
Future Development/RWR
How much firm yield is needed for
future development?
• Growth in service area
• Population increase ~45,000 by 2065
• Residential and commercial water use
• Expected RWR from growth:
• ~11,900 AF of RWR (current calculation)
• But, water use has changed over time
10
Water Use Changes
How has water use changed?
• Analyzed 10 years water use (2006-2015)
• Water use less than expected (current RWR)
• Single-family: 26% less
• Multi-family: 39% less
• 3/4-inch tap: little change
• Larger taps: 18-25% less
• Suggest RWR adjustments to reflect changes
• Revised expected RWR = ~7,700 AF
11
Residential indoor use
better correlated to
number of bedrooms
12
Amount Cash-in-of Raw Lieu Water (CIL) Required Rate
Cash-in-Lieu:
Past, Future, Present
• Past: accepted water rights and cash-in-lieu
• Incremental cost of water rights
• Future: water supply system complete
• Equity buy-in cost approach
• Similar to plant investment fees
• Present: transition from incremental to buy-in
• Hybrid of both
13
Future Water Supply Needs
How much will it cost to increase firm yield
for new development?
$63.9M: Infrastructure (e.g., storage)
+ $25.5M: Future water rights (requires storage)
+ $40.5M: Value from existing portfolio
$129.9M: Total cost to increase firm yield
14
Future supplies would not provide adequate yield
without existing portfolio
Hybrid Cost Approach
• Proposed Cash-in-lieu rate:
= $16,700 / AF
𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 𝑜𝑜𝑜𝑜 𝐹𝐹𝑉𝑉𝐹𝐹𝑉𝑉𝐹𝐹𝑉𝑉 𝐼𝐼𝐼𝐼𝐼𝐼𝑉𝑉𝐼𝐼𝐹𝐹𝐼𝐼𝑉𝑉𝐼𝐼𝐹𝐹
𝐼𝐼𝐼𝐼𝐼𝐼𝐹𝐹𝑉𝑉𝑉𝑉𝐼𝐼𝑉𝑉𝐼𝐼 𝐹𝐹𝐹𝐹𝐹𝐹𝐼𝐼 𝑌𝑌𝐹𝐹𝑉𝑉𝑉𝑉𝐼𝐼
=
$129.9𝑀𝑀
7,800 𝐴𝐴𝐹𝐹
Cash-in-lieu Rate
15
Value from Existing Portfolio
16
30,800
AF
7,800 AF
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Supplies
Firm Yield (acre-feet)
Future Development
Current Customers
How is this portion of the fee calculated?
• ~20% of existing firm yield and historic CIL
rate of $6,500/AF
• Compares with CBT = $50,000/AF
• Less than full “buy-in” with future
needs = $33,800/AF
How will funds be used?
• Offsets future impacts on existing water
supply system (e.g., Michigan Ditch tunnel)
Future Firm
Yield =
38,600 AF
17 17
$4,300
$2,800
$9,000
$3,900
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Single family, 4br, 6,000 sq ft lot Multi-family, 100 units, 3.4 acres
Cost per Unit or Tap ($)
Fort Collins Utilities: Raw Water Requirement Costs for
Typical Residential Developments
Status Quo Hybrid Approach
Cash-in-lieu (CIL) Rates:
Status Quo CIL = $6,500/AF
Proposed CIL = $16,700/AF
18 18
$5,900
$19,500
$15,100
$37,800
$0
$10,000
$20,000
$30,000
$40,000
Commercial Tap: 0.75" Commercial Tap: 1.0"
Cost per Unit or Tap ($)
Fort Collins Utilities: Raw Water Requirement Costs for
Typical Commercial Developments
Status Quo Hybrid Approach
Cash-in-Lieu (CIL) Rates:
Status Quo CIL = $6,500/AF
Proposed Cost CIL = $16,700/AF
$4,300
$9,000
$11,800
$13,000
$13,200
$14,200
$25,000
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000
Status Quo
Hybrid Approach
Loveland
NWCWD
Greeley
ELCO
FCLWD
Cost, rounded to nearest $100 ($)
Water Supply Costs for Typical Single Family Home in Northern
Colorado
19 19
$19,500
$30,600
$37,800
$62,500
$64,000
$101,100
$105,000
$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000
Status Quo
NWCWD
Hybrid Approach
FCLWD
Greeley
ELCO
Loveland
Cost, rounded to nearest $100 ($)
Water Supply Costs for 1" Commercial Taps in Northern Colorado
20 20
21
Amount Accepting of Raw Cash Water Only Required
Accepting Cash vs. Water Rights
Imperative to switch to cash-only system:
22
Focus on infrastructure first Need specific water rights in future
Flexibility to pursue other options Can still acquire water rights
Incorrect rights are inefficient; ineffective
without infrastructure (storage)
Storage increases supply with existing
(and future) water rights
Could include regional aspects Focus on best rights
Staff Recommendations
1. Adjust RWR schedules based on recent use
• Residential based on # of bedrooms
2. Use “Hybrid” approach cash-in-lieu rate
• CIL = $16,700/AF of RWR
3. Accept cash only (and credits)
4. Periodically adjust CIL, RWR
5. “Water Supply Requirements”
23
Implementation Alternatives
• Adopt changes and implement immediately
• Adopt changes and delay implementation by a few months
• Adopt changes and phase in changes over several months
24
Affordable Housing
• Concern for both Affordable Housing (as defined in City Code) and
housing affordability in Fort Collins
• Future Affordable Housing projects are 95% multi-family
• Cost for all housing will increase (in Utilities service area)
• Multi-family cost impact will be lessened by reduced RWR
• Social Sustainability creating an internal task force to address fees
and housing affordability
25
Next Steps
26
Additional
public outreach
City Council
action/adoption
Changes become
effective
On-going:
• Water District discussions
• Affordable Housing task force
Feb-
Mar
Apr-
May Jul-
Sep
Direction Sought
27
What feedback does Council have on the proposal to:
• Change the amount of raw water required?
• Change the cash-in-lieu rate and methodology?
• Accept cash only?
• Require periodic updates to the RWR and CIL rate?
28
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INTERSTATE 25
S SHIELDS ST
S COLLEGE AVE
S TAFT HILL RD
E VINE DR
S TIMBERLINE RD
LAPORTE AVE
E PROSPECT RD
S LEMAY AVE
E DOUGLAS RD
W DRAKE RD
STATE HIGHWAY 392
N OVERLAND TRL
E MULBERRY ST
E DRAKE RD
S COUNTY ROAD 5
COUNTY ROAD 54G
N US HIGHWAY 287
N SHIELDS ST
W MULBERRY ST
W PROSPECT RD
S OVERLAND TRL
E COUNTY ROAD 30
ZIEGLER RD
W TRILBY RD
E HORSETOOTH RD
N COUNTY ROAD 23
W COUNTY ROAD 38E
CARPENTER RD
S COUNTY ROAD 23
E LINCOLN AVE
N TAFT HILL RD
E COUNTY ROAD 38
W HORSETOOTH RD
TURNBERRY RD
W ELIZABETH ST
N LEMAY AVE
TERRY LAKE RD
S COUNTY ROAD 19
N COUNTY ROAD 5
S CENTENNIAL DR
GREGORY RD
GIDDINGS RD
W LAUREL ST
KECHTER RD
S US HIGHWAY 287
E COUNTY ROAD 54
E COUNTY ROAD 52
/
Fort Collins Area Water Districts
012345 0.5
Miles
Water Districts
East Larimer County Water District
Fort Collins Loveland Water District
Fort Collins Utilities (Water)
Sunset Water District
West Fort Collins Water District
!!City Limits
GMA
Major Streets
Railroads
Figure Updated: 9/23/2015
ATTACHMENT 1