HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/22/2017 - FIRST READING OF ORDINANCE NO. 116, 2017, AMENDINGAgenda Item 3
Item # 3 Page 1
AGENDA ITEM SUMMARY August 22, 2017
City Council
STAFF
Donnie Dustin, Water Resources Manager
Carol Webb, Water Resources/Treatmnt Opns Mgr
Lance Smith, Utilities Strategic Finance Director
Eric Potyondy, Legal
SUBJECT
First Reading of Ordinance No. 116, 2017, Amending Chapter 26 of the Code of the City of Fort Collins to
Make Various Changes Related to the Raw Water Requirements, to Hereinafter Be Known as the “Water
Supply Requirements.”
EXECUTIVE SUMMARY
The purpose of this item is to consider adoption of various changes to the Utilities Raw Water Requirements
(RWR). The RWR are a dedication of water rights or cash-in-lieu (CIL) of water rights to ensure that adequate
water supply and associated infrastructure are available to serve the water needs of development. The three
main changes are decreasing the amount of RWR, increasing the CIL rate and moving to a cash-focused
system. These changes will increase development costs in the Utilities water service area, but are necessary
for meeting the water needs of that development. Following direction given at the February 14, 2017 City
Council work session, staff has conducted additional outreach and addressed City Council questions. This item
was presented on July 11, 2017 to the Council Finance Committee, which recommended the item be
considered for adoption by the entire City Council.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading. The following is a summary of the proposed
changes:
Adjust the RWR schedules to reflect recent (lower) water use
o Use number of bedrooms for indoor component of residential schedule
Increase the Cash-in-Lieu (“CIL”) rate to $16,700 per acre-foot of RWR
Accept cash, existing City-issued water certificates and credits, North Poudre Irrigation Company
(“NPIC”) shares, and Colorado-Big Thompson Project (“CBT”) units for RWR satisfaction
o No longer allow dedication of other water rights
Review and adjust (if necessary) the CIL rate biennially
Review and adjust (if necessary) the RWR schedules every 5 to 7 years
Implement RWR and CIL rate changes on April 1, 2018
Rename the RWR as the “Water Supply Requirements”
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 re-development needing increased water service). Changes to the RWR and CIL rate
have not been made for many years.
Agenda Item 3
Item # 3 Page 2
Staff presented the proposed changes to the RWR and CIL rate at the February 14, 2017 City Council work
session. The material provided for that work session, which contains more detailed information on the
background and proposed changes, is included as Attachment 1. Council direction was to consider delayed
implementation of the changes, provide information about the impact on rates to delaying or not implementing
the changes, conduct additional public outreach (including to the general public), orient new Councilmembers
on the related issues, and provide justification for contingencies embedded in the CIL rate.
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 2).
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 and CIL rate will
only apply to water service from Utilities and within the Utilities water service area. This does not preclude
future changes to the RWR and CIL rate for water service from Utilities based on potential outcomes of the
regional discussions or from the Districts modifying their respective water dedication requirements.
Current Raw Water Requirements (RWR)
The RWR starts with determining the amount of RWR that must be provided to Utilities, which are generally
based on water use and development type. Once the amount of RWR is determined, it can currently be met
by:
Dedication of acceptable water rights (mostly local ditch company shares);
A payment of cash-in-lieu of water rights (currently $6,500 per acre-foot of RWR);
Turning over City-issued water certificates or credits.
Future Development and Water Use Changes
The amount of RWR needed to meet Utilities’ future water supply needs includes calculating the projected
amount of future water use from new and redevelopment and then 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.
The Utilities’ water service area population is projected to grow by about 45,000 people by the year 2065 (from
the current service area 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.
The current RWR schedules are based on a 1983 study. Utilities staff analyzed 10 years (2006-2015) of
monthly water billing data. Due in great part to successful conservation efforts, water consumption for almost
every customer category has decreased from the amount required under the current RWR calculations. In
addition, the analyses suggest that the best models for predicting water consumption for both single-family and
multi-family residential developments are those based on lot size and number of bedrooms.
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:
Agenda Item 3
Item # 3 Page 3
Single Family/Duplex RWR (acre-feet)
= 1.92 x [ 7.048 x Lot size (sq. ft.) ] + [ 12,216.9 x Bedrooms (#) ]
[ 325,851 (gallons/acre-foot) ]
Multi-Family (> 2 units) RWR (acre-feet)
= 1.92 x [ 9.636 x Lot size (sq. ft.) ] + [ 13,592.8 x Bedrooms (#) ]
[325,851 (gallons/acre-foot) ]
Commercial RWR (acre-feet) =
¾-inch tap: 0.90
1-inch tap: 2.26
1 ½-inch tap: 4.72
2-inch tap: 7.91
> 2-inch tap: case-by-case
Water Supply Needs and Other Costs for Increasing Firm Yield
Utilities projects the need for new infrastructure and some additional water rights to increase the Utilities firm
yield by about 7,800 acre-feet in order to meet projected future growth in the water service area by 2065.
Alone, acquiring the new infrastructure and water rights would not provide adequate water supplies needed for
those future customers without use of the existing water supply system. As explained in the previous material
(Attachment 1), a “buy-in” component was added to consider the total value of the water supply system that
new development will need. The following briefly lists these components and their projected costs/value in
2017 dollars:
$63.9M: Infrastructure (mostly additional storage, e.g., Halligan Water Supply Project)
$25.5M: Future water rights (requires storage to be effective)
$40.5M: Value of existing portfolio to be utilized by new development
Combining these costs provides the total current cost to increase the firm yield for new development (or
redevelopment) of approximately $129.9 million.
Cash-in-Lieu (CIL) Rate Changes
As explained in the previous material (Attachment 1), staff developed a hybrid CIL rate approach that uses the
total costs to increase the firm yield and divides this amount by the additional provided.
CIL Rate (Hybrid Approach):
$129.9M (cost to increase firm yield) / 7,800 acre-feet (increased firm yield)
= $16,700 per acre-foot of RWR
Cash Focus Considerations
It is imperative that the RWR become a “cash focused” system. This would mean no longer accepting water
rights to meet the RWR, except for CBT units and NPIC shares that come with storage that provide year-round
use and firm yield. Existing City-issued water certificates, as well as credits from previously-satisfied RWR, will
still be accepted. Cash will allow focus on acquiring additional storage capacity, agility to acquire specific water
rights, and flexibility to pursue other (potentially regionally collaborative) water supply options.
It should be noted that the conversion factor for water rights accepted by the City are currently set by the
Water Board. Under the proposed changes, the Water Board would no longer have this function because the
conversion factors would be set forth in the City Code. For NPIC shares, the current Water Board-approved
Agenda Item 3
Item # 3 Page 4
conversion factor was revised from 5 acre-feet per share to 4-acre feet per share. This recognizes that each
NPIC share includes 4 CBT units, which is the main value of these shares to the Utilities.
Commercial Surcharges
Commercial taps that have met the RWR since the mid-1980s have also received an equivalent water
allotment. After a customer’s total annual water use goes over that allotment in a given calendar year, their
water bill includes a surcharge rate applied to all water use over the allotment (along with the standard water
rate). The current surcharge rate is $3.06 per 1,000 gallons (for use over the annual allotment). Funds
collected via this surcharge are used to acquire additional water supplies that compensate for the use over
what was initially provided. The proposed increases to the CIL rate will increase the surcharge rate to $7.86
per 1,000 gallons. Allotments can be increased closer to actual use by meeting additional RWR.
Since the change to the surcharge rate is significant, Utilities staff is conducting focused outreach to existing
customers who consistently exceed their annual allotment. In particular, Utilities water conservation staff is
contacting these customers about ways to reduce their use. Also, upon final adoption of the RWR/CIL rate
changes by City Council and assuming a delayed implementation of those changes, these customers will be
alerted to the opportunity to increase their allotments before the proposed CIL rate increases take effect.
Future RWR/CIL Adjustments
It is recommended that the CIL rate be reviewed every two years, as a part of the other City biennial fee review
process, and adjusted as needed to reflect changes such as construction or water rights costs. It is also
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.
Previous Council Requests
Council had the following requests for additional information at the February 14, 2017 work session, which are
followed by staff responses:
Please provide justification for the contingencies used in the proposed changes.
o A 25 percent contingency was added to the infrastructure and water right components of the
projected costs that were part of the proposed CIL rate. The main cost in the infrastructure
component is based on the estimated cost of the Halligan Water Supply Project. However, the
City may get a permit for an alternative project that could be up to 2.5 times the cost of
enlarging Halligan Reservoir. The cost of the future water rights component are based on
current market values and the contingency considers potential inflation of these rights. CBT
units cost about four times their cost 6 years ago. Given these examples, Utilities staff
believes the 25 percent contingency is justified (if not conservatively low).
Please orient new Councilmembers on these issues if Council action is delayed until after the April
(2017) municipal elections.
o Councilmember Summers was briefed on these changes (along with many other Utilities
items) by the Utilities Executive Director in late June 2017. In addition, as a member of the
Council Finance Committee, Mr. Summers was oriented at the July 11, 2017 meeting when
this topic was discussed.
CITY FINANCIAL IMPACTS
Although the amount of RWR is being decreased, the significant increase in the CIL rate will result in overall
cost increases for all types of development in the Utilities water service area. However, these cost increases
are necessary to ensure an adequate water supply to serve new development. Even with these increases,
however, Utilities’ RWR costs will remain one of the lowest when compared with other local water providers.
Agenda Item 3
Item # 3 Page 5
Council had the following requests related to City financial impacts at the February 14, 2017 work session,
which are followed by staff responses:
Staff should consider delayed implementation of the changes on the order of 6 to 12 months, and
should define the impacts of this schedule.
o Delaying the implementation of the RWR and CIL rate changes can be done, but doing so
would result in less RWR fees being collected over the delay period. In the last 3 years, the
amount of RWR met has averaged about 800 AF. Assuming this average will continue for the
next year or two, then the reduction in RWR fees collected could be significant. If all RWR
(under both the current and proposed systems) was met with cash only (no credits or water
rights), the reduction in fees collected would be approximately $1.7 million every 6 months or
about $3.5 million per year. Any shortfalls would fall upon the ratepayers through future rate
increases. A $3.5 million annual shortfall would represent 12% of the 2016 annual water fund
operating revenues of $29.7 million.
Staff should provide information about the impact on ratepayers from not making these changes and
how rates have changed over time.
o There are two main changes to the RWR/CIL rate system that effect the revenues generated.
First, the proposed decreases in overall RWR to be satisfied are to recognize lower water use
as a result of long-term water conservation. Not making the RWR changes would create a
disconnect between current data regarding the amount of water that is actually being used and
the amount of water being required by the RWR. Therefore, if the RWR is decreased, but the
CIL rate remains at $6,500 per acre-foot of RWR, the reduction in RWR fees collected over
the next 50 years would be about $49 million. This shortfall would fall upon the ratepayers
through future rate increases, which could be significant.
o Utilities water rate increases have varied over past years. More recently, Utilities has
advocated for gradual, but consistent rate increases to avoid large, unexpected ones (which
might be needed if the proposed changes to the RWR/CIL rate are not made).
BOARD / COMMISSION RECOMMENDATION
At its July 20, 2017 meeting, the Water Board recommended adoption of the proposed changes in a six by a
vote of 6-2. The two opposing votes believed that the $40.5 million “buy-in” component of the proposed CIL
rate was too low and that it should be higher to more accurately reflect the value of the Utilities existing water
supply portfolio that new development will have access to use. (Attachment 3)
The proposed changes were also presented to the Affordable Housing Board (AHB). The AHB provided a
letter to Utilities asking for exceptions to these changes (Attachment 4) which briefly entailed either (1)
freezing the current CIL rates for qualified affordable housing developments (QAHD), (2) phase in changes
and apply to QAHD last, and (3) lock CIL rates for QAHD at the beginning of the development process. Making
these types of changes would result in lost Utilities impact fees that would need to be made up through
increases to Utilities water rates, which is counter to the Utilities enterprise fund operations by using enterprise
funds to subsidize affordable housing. For this reason, Utilities does not have the authority to implement this
request. Utilities staff is committed to being part of an internal City task force organized by the Social
Sustainability Department to consider affordable housing issues. The task forces will discuss the issues
presented in the AHB letter, along with similar changes for other Utilities impact fees. Potential changes can
then be presented to the AHB and City Council once they are more thoroughly developed.
Staff also presented to the following boards/commissions:
Economic Advisory Commission – the Commission was generally supportive of the proposed changes
Natural Resources Advisory Board – the Board was generally supportive of the proposed changes, with
some members advocating for a higher CIL rate.
Agenda Item 3
Item # 3 Page 6
PUBLIC OUTREACH
Utilities staff has presented the proposed RWR and CIL rate changes to key stakeholders including local ditch
companies (from which Utilities has historically accepted shares), the Fort Collins Chamber of Commerce, the
Northern Colorado Home Builders Association, Utilities key accounts, several individual affected developers
and water right holders, and various discussions with the Districts.
As requested by City Council at the February 14, 2017 work session, Utilities staff attempted to conduct
general public outreach via focus groups on how Utilities assess water impact fees for new development and
how it might affect water rates. Out of 100 randomly-selected customers that were contacted (from a larger
pool of customers that had previously agreed to be contacted for surveys and focus groups), only one agreed
to attend. Therefore, the focus groups were cancelled. The City’s Financial Services staff has convened a Fee
Working Group, which includes members of the public via City Board and Commission members (including a
Water Board member), that will meet over the next several months to discuss all development fees (including
the RWR and CIL rate).
Input Received
The following summarizes various input received during the outreach process, followed by staff reactions or
adjustments made to the proposed changes to address the input:
Concern about the increased costs to housing in Fort Collins.
o Although these changes will increase the cost of new housing in Fort Collins, the proposed
changes are needed to provide an adequate water supply to this new development. Even with
the overall increase in water costs for new development in the Utilities service area, these
costs will still be lower than most in the region.
The “buy-in” component of the CIL rate is like paying for something twice; where does that revenue get
used?
o The $40.5 million “buy-in” component of the CIL rate considers the future customer’s use of a
portion of the existing water supply system. Only acquiring the projected infrastructure and
water rights needs explained above would not provide enough water supplies to support the
projected growth. They need to use portions of the existing water supply system. The revenue
generated from this portion will reduce future costs associated with upkeep of the water supply
system and 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.
No longer accepting local ditch company shares will devalue those shares.
o The ditch shares historically accepted by Utilities have always been and will continue to be
available for purchase by others (including the City), which should help to maintain their value.
Recently, the East Larimer County Water District (or “ELCO”, which serves the northeast
potion of the City’s GMA) began accepting several of the ditch company shares that were
historically accepted by Utilities. This concern of devaluation was focused on shares of the
Pleasant Valley and Lake Canal Company (PVLC), which is not accepted by ELCO or other
known water providers. Utilities staff projects the need for some additional PVLC shares and
shareholders can contact staff if they wish to sell their shares. Utilities would intend to
purchase them at a fair market value.
o While staff recognizes that this change may impact the market value of these water rights
(local ditch shares) in the near term, the use of such rights to meet the RWR for development
has only been minimal in recent years. Moreover, as the Utilities approaches build out of its
water service area, it is imperative that the final additions to the water rights portfolio are
strategically made through targeted purchases of certain water rights.
The proposed changes will increase costs for projects that are already in the development process.
o Developers typically consider the total cost of a development with the water (and other) fees
that are in place before they acquire permits and start construction, particularly for commercial
and multi-family developments which are typically built in a short time period and sold as one
Agenda Item 3
Item # 3 Page 7
project (versus single family homes, which an entire development can take years to build and
the home prices can adjust with the fees). Some developers requested a delayed
implementation to avoid these types of cost impacts. According to the Planning Department, it
takes approximately 9 to 12 months from a first submittal to a final development plan - at
which point the RWR can be assessed and met (or paid). Given that these changes were
initially presented to City Council on February 14, 2017 (and thus made public) and staff’s
recommendation is to delay implementation until April 1, 2018, this should provide adequate
time for developments that started in early 2017 to meet the RWR under the current system
and CIL rate.
No longer accepting water rights will injure developers that have collected them for planned
developments that are early in the City’s process.
o Some developers have submitted a large overall development plan (“ODP”) to the City that
has multiple phases of development that might takes several years to build out. Also, some
developers have started development that take longer than the typical 9-12 months to get
through the City approval process. These developers may have collected water rights (local
ditch shares) for these projects, but are not yet at the stage of development to turn them in to
meet the RWR. Discontinuing acceptance of water rights would burden the developers that
have planned accordingly. In order to prevent this type of burden, staff has included provisions
to allow dedication of these water rights under the following set of conditions:
Developer shows proof of starting the development and ownership of shares for the
development to be dedicated prior to February 14, 2017;
Transfer of water rights to the City occurs prior to January 1, 2019; and
The dedicated water rights shall not be transferred to another property (in case of
changes to the development).
ATTACHMENTS
1. Work Session Agenda materials, February 14, 2017 (PDF)
2. Fort Collins Area Water Districts Map (PDF)
3. Water Board minutes, July 20, 2017 (draft) (PDF)
4. Affordable Housing Board, April 19, 2017 (PDF)
5. Council Finance Committee minutes, July 11, 2017 (draft) (PDF)
6. Powerpoint presentation (PDF)
DATE:
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:
x Adjust RWR schedules to reflect recent (lower) water use
o Use number of bedrooms for indoor component of residential schedule
x Adjust CIL rate per a hybrid cost approach
o Increase CIL rate to $16,700 per acre-foot of RWR
x Accept cash only (and existing City-issued water certificates and credits)
o Discontinue the dedication of water rights
x 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.
ATTACHMENT 1
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
x 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.
x 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.
x 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
Figure 2
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).
$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
$19,500
$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
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:
x 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;
x January 27: Fort Collins Chamber of Commerce
x February 8: Northern Colorado Home Builders Association (did not occur before this AIS)
x 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:
x Adjust Raw Water Requirement (RWR) schedules to reflect recent (lower) water use
o Use number of bedrooms for indoor component of residential schedule
x Adjust the Cash-in-Lieu (CIL) rate per a hybrid cost approach
o Increase CIL rate to $16,700 per acre-foot of requirement
x Accept cash only (and existing City-issued water certificates and credits) for RWR satisfaction
x Review and adjust (if necessary) the CIL rate biennially
x 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:
x Adopt changes to RWR and CIL rate and implement immediately
x Adopt changes to RWR and CIL rate, but delay implementation by a few months
x 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)
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
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.
ǡʹͲͳ
Ǥ Ǥ
Re: Fort Collins Utilities Cash-in-Lieu Charges for Water to Serve New Development
ǤǤǣ
ȋ Ȍ ƬȋȌ ǦǦ
Ǥ
ǡ ǯ ǡ
Ǥ Ǥ
ǯǤ
ǯ ǣ
ǯ ǦǦǫ
ǯ ȋǤǤ Ȍǫ
ǯ ǦǦǫ
ǦǦ ǫ
ǯ ǡ
Method for establishing the cash-in-lieu requirement.ǯʹͲͳͷ
ǡ ǡǡ ǦǦ
ȋȌǤ
ǡ ǯ ǡ
Ȅ ǦǦ Ȅ Ǥ
ǡDzdzǡ Ǥ
PAGE 2
ǦǦ
Ȅequity buy-in incremental cost Ǥ
Equity buy-in approach.
Ǥ
PAGE 3
Ǥ
Estimated value of FCU’s water resource system.
ǡ ǯ
ǣ ǯ ǡ
Ǥ
Estimated minimum value of FCU’s existing water resource portfolio.
ͳǡǯ
̈́ͳǤʹǤ
Dz̈́ͳdz ʹͲͳʹ
Ǥʹ
ǯȂǦȋǦȌǡ
PAGE 4
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. ǡ
ǡ
Ǥ ǡ
̈́͵ͲǡͲͲͲ Ǧǡ Ǧ
Ǥʹͷ
Ȁ Ǥ
ȋ Ǧǡ
PAGE 7
Figure 2. Estimate Range of Potential Values for FCU’s Water Resource System
Value per acre-foot of firm yield. ͵
ǡ ǦǤ
Ȅ ͵ͲǡͺͲͲ ͵ͺǡͲͲ Ȅ
Ǥ
̈́͵͵ǡͺͲͲ̈́͵ͻǡʹͲͲ ǦǤ
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. ǯ
ǦǦ
Ǥ
FCU’s current approach. ȋȌ
ͳͻͺͲǤǡ
ǡ
ǡǣ
αͳǤͻʹȏȋǤͳͺȌΪȋͳǤʹ ȌȐ
ǡǣ
αǤ͵ͶͷΪȋʹǤ͵ͲͶ Ȍ͵
ǡ ȋ
ǦǦ Ȍ Χ ʹ
Ǥ ʹ ǦǦ
Ǥ
Ǥ
ǡǡǤ
Conceptual approach to establishing RWR.
ʹͲͳͷǡ ǦǦ
ʹʹ
͵ Φ Ǥ
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
Ǥǡ ǡͳͻʹʹ
Ȁ ǦǦ
ǤͶ
ǯǡ
ȋȀ ǦǦ
ȌǤ
Requirement based on overall gross or net acreage of new development.
ȋ Ǧ
Ǧ ȌǤ
ǡ Ǥ
Requirement based on number of dwelling units or taps.ǡ
ͷǡ
Ȁ
PAGE 10
Findings and recommendations. ǦǦ
ǡ Ǥ
ȋʹͲȌ
Ǥ ǦǦ
ǤDz dzȋͳǤͻʹ
Ȍ
ǡ Ǥ
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.
Ǥ
ǡ
ȋ ʹȌǤ
ǡ
Ǥ ǡǡ
ȋǤǤ Ȍ
Ǥ
ǦǦǤ
Ǧ ȋǤǤ̈́͵͵ǡͺͲͲ
̈́͵ͻǡʹͲͲ ǦȌǤ ǡ
ǦǦ
Ǥ
ǡʹǡ
ǦǦǤ ǦǦ
Ǥ ǡ
ǡǦ ȋǤǤ
ȌǤ
ȋ̈́ʹ̈́ͺͻ ͵Ȍ
Ǥ
Ǥ ǡ
Ǥ
PAGE 11
ǡ
DzǦdz Ǥ ǡ ǦǦ
ȋ ȌȂ
ǯ Ǥ ǡ
ǡʹͲͲ Ǧȋ
ȌǤ Ǧ
ǯȋǤǤǡ̈́͵͵ǡͺͲͲ̈́͵ͻǡʹͲͲ ǦȌ
ǡ ȋǤǤǡ ǯ
PAGE 12
Ǧ ǡ ǯ ǡ
Ǧ ǦǦ Ǥ
Ǧ ȋ̈́͵͵ǡͺͲͲ̈́͵ͻǡʹͲͲ Ǧ
ǡ Ȍ
ǡ
Ǥ Ǧ
ǡ
Ǥ
ǡ ǦǦ
Ǥ
ǡ
ǡ Ǧ
ǦǤ
ǡ Ǥ
ǡ
ǡ
ǦǦ Ǥ
ǦǦ ǯ
ǡ
Ǥ
ǦǦ ǦǤ
Ǧǡ
Ǥ ǡǦ
Ǧ ǡǦ
Ǥ
ǡ
Ǥ
PAGE 13
Ȃ
ȋǯʹͲͳͷ
Ȍ
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
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
DRAFT Unapproved Minutes Excerpt
Water Board July 20, 2017
Changes to the Utilities Raw Water Requirements
(Attachments available upon request)
Water Resources Manager Donnie Dustin summarized changes to the Utilities Raw Water
Requirements (RWR) and the timeline of public outreach. RWR are the water rights or fee paid
by new development to ensure that adequate water supply and associated infrastructure are
available to serve the water needs of development; the amount paid is based on use and type of
development. Currently RWR can be satisfied with acceptable water rights, cash-in-lieu (CIL) of
water rights, city certificates (credits), or a combination. Changes to RWR and CIL have not
been made in many years.
Staff requests Water Board’s recommendation for approval of proposed changes before seeking
adoption by City Council on August 15 and September 5. Staff previously presented this topic to
Water Board on October 5, 2016 and to City Council Work Session on February 14, 2017, and
has since presented to other City boards and commissions, and to several key stakeholders (e.g.
local ditch company boards).
Discussion Highlights
Board members commented on or inquired about various related topics including: future water
supply needs and the cost to increase firm yield for new development; Halligan Reservoir costs
and how they relate to future water supply needs; adjustments staff made to the proposal as a
result of public outreach, such as delayed implementation and related financial impact;
assessments paid to ditch companies; the types of water rights/shares accepted; water supply
costs for a typical single family home in Northern Colorado; and methodology for proposed
changes. Mr. Dustin, Utilities Strategic Finance Director Lance Smith, Water Resources and
Treatment Operations Manager Carol Webb, and Assistant City Attorney Eric Potyondy
responded to Water Board members’ questions.
Board Member Michael Brown moved that Water Board recommend that City Council
adopt the proposed changes to the Utilities Raw Water Requirements, which includes
changes to the cash-in-lieu rate.
Board Member Kent Bruxvoort seconded the motion.
Discussion on the Motion: Board members discussed the staff recommendation to delay
implementation to April 1, 2018 and the benefits of a long time frame to address developer
concerns. Staff stated that if the proposed changes and April implementation date are adopted by
City Council, it should provide adequate time for developers to complete current projects under
the current RWR and CIL rate system. For developers that have acquired water rights in
anticipation of completing longer-term projects (e.g., Overall Development Plan process or more
complex developments), they can dedicate water rights until January 1, 2019 as long as the
developers show they were in the City’s development process and that they owned the water
rights prior to February 14, 2017 (date of City Council work session on proposed changes).
Board members stated concerns about a possible unintended consequence of higher workload on
ATTACHMENT 3
City engineers to process a potential rush of permits in a short amount of time, and whether staff
is equipped to handle larger amounts of cash and water rights certificates coming in to fulfill
RWR. Staff stated that it is well equipped for this eventuality.
Vote on the motion: It passed 6-2, with Board Members Jim Kuiken and Phyllis Ortman
opposed. Reasons for dissenting votes: Board Members Kuiken and Ortman believe the $40.5
million number is too low of an estimate for the “buy-in” value of the City’s existing water
portfolio (used in the calculation for future water supply needs, which is used to determine the
CIL rate) and don’t want to set the precedent of not charging the full buy-in cost now. They
stated concern about being vulnerable to legal action by developers who might take the stance
that previous developers were not charged the full buy-in costs in the past and that the City must
stick with its past methodology. Staff responded that BBC Research and Consulting (a consultant
hired to review the proposed changes) determined the full buy-in cost to be $33,800 (which was
calculated with the current market value of the Utilities existing and future water supply
portfolio). Staff further explained that the buy-in component estimated the value of the water that
the new development would use and applied the long-term CIL rate of $6,500, which continues
to be the current market value of the types of water rights that would be used in the additional
storage Utilities is working to acquire. Staff also explained that it has a legal responsibility to
only charge for the impact of the new development (as opposed to the full current market value).
Social Sustainability
321 Maple Street
PO Box 580
Fort Collins, CO 80522
970.221.6758
TO: Carol Webb, Donnie Dustin and Lance Smith, City Water Utilities
FROM: Affordable Housing Board
DATE: April 19, 2017
RE: Proposed Changes to Raw Water Requirements
The Affordable Housing Board very much appreciates your April 6
th
, 2017 presentation to the
board on the proposed changes to raw water requirements.
As you are aware, housing affordability is a major issue in Fort Collins. The costs of utilities is
one factor that can affect affordability. The proposed changes to the raw water requirements are a
factor that will affect the financial feasibility of qualified affordable housing developments
targeted for low-wage earners. The goals of the City’s 2015-2019 Affordable Housing Strategic
Plan will be jeopardized if our developer partners cannot produce these units.
Currently, most new affordable housing in the City is multi-family construction, which requires
less water per unit than single-family homes. In recognition of this utility benefit, as well as the
community need for affordable housing, water costs for these developments should not be
charged at the same rate as other market-rate developments.
The Affordable Housing Board recommends that the City’s water utilities staff present the
following options to City Council related to the proposed raw water requirements rate increases:
1. The proposed water rate increase not be applied to any qualified affordable housing
development, and that current rates be frozen for this housing type. Since affordable housing
production is a small fraction of overall development in the City, we do not feel the City’s
overall financial health would be jeopardized by implementing this rate freeze. Perhaps an
analysis of a current project such as the Village on Redwood could best illustrate the financial
impact of this policy.
Or alternatively,
2. That any rate increase phasing be applied to qualified affordable housing last, and not be less than
24 months from the time when rate increases go into effect.
3. In addition, given the increased complexity of funding sources and the increased time needed
to acquire them, affordable housing projects take longer to complete than market-rate projects.
The Board recommends water rates for new affordable housing developments be locked at the
time of the development proposal submission. Investors require developers of affordable
housing to lock in their funding sources and budget amounts early in the process, so certainty of
actual costs is crucial. It is extremely difficult for these development deals to manage a rate
increase mid-process.
We appreciate your consideration of these recommendations. The Board would appreciate being
kept informed about this issue.
ATTACHMENT 4
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Minutes
(EXCERPT FOR RAW WATER REQUIREMENTS)
07/11/17
1:30 - 4:00 pm
Colorado River Community Room – 222 Laporte
Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers
Staff: Darin Atteberry, Mike Beckstead, Jeff Mihelich, John Duval, Travis Storin, John Voss,
Tiana Smith, Lawrence Pollack, Andres Gavaldon, Joanne Cech, Lance Smith, Josh Birks,
Carrie Daggett, Laurie Kadrich, Helen Matson, Kerri Allison, Sue Beck-Ferkiss,
Rachel, Springob, Tyler Marr, Teresa Roche, Joaquin ‘Keen’ Garbiso, Mark Jackson, Kurt
Ravenschlag, Michelle Provaznik
Others: Kevin Jones (Chamber of Commerce), James Manire (First Southwest), Jim Burke,
(Assurance Senior Manager, RSM US LLP) T
C. Raw Water / Cash in Lieu
Donnie Dustin, P.E., Water Resources Manager
Lance Smith, Utilities Strategic Finance Director
Carol Webb, Water Resources and Treatment Operations Manager
SUBJECT FOR DISCUSSION: Changes to the Utilities Raw Water Requirements
EXECUTIVE SUMMARY
The purpose of this work session is to provide the Council Finance Committee with an overview of the
proposed changes to the Utilities Raw Water Requirement system and associated cash-in-lieu rate, and
actions taken by Utilities staff following direction given at the February 14, 2017 City Council work
session. Staff will be seeking adoption of these changes at the August 15 and September 5 City Council
regular meetings.
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, existing City-issued water certificates and credits, North Poudre Irrigation Company
shares, and CBT units for RWR satisfaction
o No longer allow dedication of other water rights
ATTACHMENT 5
2
Review and adjust (if necessary) the CIL rate biennially
Review and adjust (if necessary) the RWR schedules every 5 to 7 years
Implement RWR and CIL rate changes on April 1, 2018
Change Code from “Raw Water Requirements” to “Water Supply Requirements”
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. What questions or feedback does the Council Finance Committee have regarding the proposed
changes?
2. Does the Council Finance Committee support these changes and recommend bringing them to the
full City Council for adoption?
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 re-development needing increased water service). Changes to
the RWR and CIL rate have not been made for many years.
Staff presented the proposed changes to the RWR and CIL rate at the February 14, 2017 City Council
work session. The material provided for that work session, which contains more detailed information
on the background and proposed changes, are included as ATTACHMENT 1. Council direction was to
consider delayed implementation of the changes, provide information about the impact on rates to
delaying or not implementing the changes, conduct additional public outreach (including to the general
public), orient new Councilmembers on the related issues, and provide justification for contingencies
embedded in the CIL rate. This report will briefly recap the proposed changes and address the direction
given by City Council, as well as highlight the public input received on the proposed changes.
Implementation Options
Implement all RWR and CIL rate changes on:
October 1, 2017 (8 months after the Feb. 14 City Council Work Session)
April 1, 2018 (a further 6-month delay)
o Staff Recommendation: allows time to address developer concerns with minor impact to rate payers
October 1, 2018 (a further 1-year delay)
These proposed changes have been incorporated into the pertinent sections of the City’s Municipal
Code, which is provided in the attached draft Ordinance (ATTACHMENT 4).
Next Steps
Present changes at the July 20 Water Board meeting for their recommendation
Bring changes for adoption at August 15 and September 5 City Council meetings
Presented proposed changes at the Council February 14 work session
Three main proposed changes:
1) Decrease the RWR to reflect lower water use
3
2) Increase cash-in-lieu rate to $16,700 AF of RWR (current rate is $6,500 AF)
3) Cash Focus - Accepting Cash vs. Water Rights except Colorado Big Thompson (CBT) water
CFC Discussion
Ross Cunniff regarding the attempted general public outreach; this is not likely to be applicable to a
rate payer
Mayor Troxell; heard from a developer - potential projection limited to 40% as it relates to its water
requirements
Donnie Dustin; that was related to the East Larimer County Water District RWR process in which if
developers turn in water rights, they only get a certain percentage of the RWR value until they go
through the water court process
Mayor Troxell; Outreach - could be applicable to Fort Collins-Loveland and East Larimer County Water
Districts, which is part of Carol’s Regional Water Collaboration (RWC) discussions
Carol Webb; working on RWC strategies and tactics with water requirements a potential focus to
better serve growth areas in the GMA
Ross Cunniff; we need some legal reading to benefit non rate payers. What is driving reduced
consumption?
Donnie Dustin; tiered rate structures - people have reduced their use; based on past 3 years – if we
don’t make changes these changes the impact will be up to $3.5M in a year in reduced impact fees
collected
Ross Cunniff; if we lose revenue because we didn’t size tap fees appropriately we could potentially ask
all rate payers to make that up which would be highly undesirable. Is an even smaller tap size option
being investigated? (tiny houses)
Lance Smith; ¾ is the smallest for residential but we could look at smaller - depends on lot size and
number of bedrooms - inherit if you are going to achieve savings
Donnie Dustin; the current and proposed RWR schedules are based on lot size and size of home such
that the RWR is less for a smaller house on a smaller lot
Ross Cunniff; this is ready to go - big step forward
1
Changes to the Utilities Raw Water Requirements
Donnie Dustin, P.E., Water Resources Manager
City Council
August 22, 2017
ATTACHMENT 6
HORSETOOTH
RESERVOIR
2
Water Impact 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
POUDRE RIVER
WATER
SUPPLY
HORSETOOTH
RESERVOIR
3
This discussion
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
5
Amount of Raw Water Required
Amount of Raw Water Requirement
(RWR)
RWR Changes
• Service area population +45,000 by 2065
• 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
• Expected RWR ~7,700 acre-feet
6
Residential indoor use
better correlated to
number of bedrooms
7
Amount Cash-in-of Raw Lieu Water (CIL) Required Rate
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
8
Future supplies would not provide adequate yield
without existing portfolio
Hybrid Cost Approach
• Proposed Cash-in-lieu rate:
= $16,700 / AF
Current CIL rate = $6,500 / AF
••••• •• •••••• •••• ••••• =
7,$129.800 9• ••
Cash-in-lieu Rate
9
10 10
$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
11 11
$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
$12,600
$13,500
$14,000
$14,180
$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 A Typical Single Family Home in Northern
Colorado
12 12
$19,500
$31,700
$37,800
$62,500
$68,000
$103,100
$111,500
$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
13 13
14
Amount Cash of Focused Raw Water System Required
Accepting Cash vs. Water Rights
No longer allow dedication of water rights,
except Colorado-Big Thompson (CBT) water
15
Focus on infrastructure first
Can still acquire water rights
Flexibility to pursue other options
Storage increases supply with existing
(and future) water rights
Could include regional aspects
Focus on best rights
Feb. 14 Council Direction
• Consider delayed implementation
• Explain rate payer impacts from:
• Delayed implementation
• Not making these changes
• Conduct additional public outreach
• Include general public
• Provide justification for contingencies
• Orient new Councilmembers
16
Outreach
• Presentations made to:
• Stakeholders: Chamber, Home Builders, ditch companies, key
accounts, individual shareholders and developers
• Boards/Commissions: Water, Affordable Housing, Economic,
Natural Resources
• Water Board: recommend adoption of changes
• Council Finance Committee: ready for Council consideration
• Attempted general public outreach via focus groups
• Cancelled due to lack of interest
• Fee Working Group on all development fees
17
Outreach summary
• Concern with increased housing costs
• Explain “buy-in” component of CIL rate
• Increased costs to current developments
• No longer accepting water rights will
• Devalue local shares
• Penalize good planning
• Affordable Housing Board exceptions
• General support from other boards
18
Adjustments Due to Outreach
• Recommend delayed implementation
• Allow developers to finish projects at current costs
• Allow planned water rights dedication (under certain conditions)
• Development started and rights acquired before Feb. 14, 2017
19
Potential Revenue Loss
• Loss from delayed implementation
• 6-months: ~$1.7M loss
• 1-year: ~$3.5M loss
• $3.5M = 12% of 2016 operating revenues
• Revenue loss made up by future rate increases
20
Implementation Options
• Implement all RWR and CIL changes on:
• October 1, 2017 (immediate)
• April 1, 2018 (6-month delay)
• October 1, 2018 (1 year delay)
• Staff recommends April 1, 2018
• Allows time to address developer concerns
21
Staff Recommendations
1. Adjust RWR schedules based on recent use
• Residential based on # of bedrooms
2. Increase CIL rate to $16,700/AF of RWR
3. Cash focused system (and credits)
4. Periodically adjust CIL, RWR
5. Implement all changes April 1, 2018
22
23
-1-
ORDINANCE NO.116, 2017
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING CHAPTER 26 OF THE CODE OF THE CITY OF FORT COLLINS
TO MAKE VARIOUS CHANGES RELATED TO THE RAW WATER REQUIREMENTS,
TO HEREINAFTER BE KNOWN AS THE “WATER SUPPLY REQUIREMENTS”
WHEREAS, the City Council is empowered and directed by Article XII, Section 6, of the
City Charter to fix, establish, maintain, and provide for the collection of such rates, fees, or
charges for utility services furnished by the City as will produce revenues sufficient to pay the
costs, expenses, and other obligations of the water utility, as set forth therein; and
WHEREAS, the City owns and operates a water utility that provides treated water service
to customers with its service area; and
WHEREAS, through various water supply furnishing or development programs, the City
has historically required that persons desiring new or increased water service from the water
utility, among other things, furnish or otherwise provide to the City certain rights to use water or
payments of cash-in-lieu thereof in order to offset the impacts of the requested water service,
which requirements are currently set forth in Sections 26-129, 26-147, 26-148, 26-149, and 26-
150 of the Code of the City of Fort Collins as the raw water requirements (“RWR”), and
referenced in Sections 2-436, 26-74, 26-94, 26-207, 26-632, 26-651 and 26-653; and
WHEREAS, City staff has historically reviewed the water supply furnishing or
development requirements periodically to ensure that the rights to use water and cash payments
received by the City are sufficient; and
WHEREAS, City staff has completed a comprehensive and thorough review of the RWR
and has determined that various changes thereto are necessary to ensure that, among other things,
the impacts of new and increased water service are offset and that the water utility has sufficient
water supplies and infrastructure to serve customers of the water utility with an adequate level of
service; and
WHEREAS, the City Manager and City staff have recommended to the City Council that
the following changes be made, which include, but are not limited to, renaming the RWR as the
“Water Supply Requirements” and changing the functions of the Water Board to no longer
include determination of raw water conservation factors.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS, as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That Section 2-436 of the Code of the City of Fort Collins is hereby
amended to read as follows:
-2-
Sec. 2-436. - Creation and purposes.
. . .
(b) The purposes of the Board shall be to advise the City Council in matters
pertaining to water, wastewater and stormwater utility policy issues and to act as a quasi-
judicial body relating to certain matters. These matters shall include, without limitation,
the following:
(2) To act as a quasi-judicial body relating to floodplain regulation variances,
stormwater fee disputes, determining raw water conversion factors and storm
drainage design criteria variances;
. . .
Section 3. That Section 26-74 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-74. - Conditions for granting permits.
A permit will be granted if all of the following conditions are met:
. . .
(3) The new or additional use of water will not adversely impact water users within
the City limits and the applicant has satisfied all raw water supply requirements imposed
by this Article;
. . .
Section 4. That Section 26-94 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-94. - Individual service lines for each building required.
. . .
(4) Plant investment fees, raw water supply requirements and any other
applicable charges required in connection with the additional building to which
service is to be provided shall be remitted as provided in this Article. For a
carriage house, additional plant investment fees and raw water supply
requirements, as well as monthly meter rates and any other water-related charges,
shall be determined based on the addition of a new dwelling unit on the property;
and
. . .
-3-
Section 5. That Section 26-129 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-129. - Schedule D, miscellaneous fees and charges.
The following fees and service charges shall be paid by water users, whether inside or
outside the City limits:
(a) Connection fees and service charges shall be as set forth in Subsection 26-712(b).
(b) The fire hydrant fees and charges shall be as follows:
(1) For installation of meter Per meter $43.00
(2) For removal of meter Per meter $43.00
(3) For daily rental for meter and fittings Per meter $8.60
(4) For water service
Per 1,000
gallons
$6.00$10.349
A deposit may be required in the amount of the
charges for the anticipated water usage and rental.
(c) The fees and requirements for raw water supply shall be as follows
(1) To satisfy raw water requirements (RWR)
Water Supply Requirement (WSR) with in-lieu
cash payments
Per
acre-foot
of RWR
WSR $6,500.0016,700.00
(2) Excess water use surcharge assessed on
commercial and irrigation taps when water use is
in excess of the applicable annual allotment
Per 1,000
gallons $3.067.86
(3) The annual water allotment, based on the minimum RWR
WSR shall be as follows:
Meter Size (inches)
Annual
Allotment
(gallons/
year)
-4-
¾ 293,270294,050
1 977,550738,250
1½ 1,955,1101,539,060
2 3,128,1702,577,610
Above 2
325,851
gallons per
acre foot RWR of
WSR
. . .
Section 6. That Section 26-147 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-147. - Grant of water rights; required.
All owners of premises requesting original water service from the City shall, before being
granted a water service permit, satisfy the assessed raw water requirement (RWR) Water
Supply Requirements (WSR) as determined in this Division without cost to the City. The
raw water requirements are WSR is as provided in this Division.
Section 7. That Section 26-148 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-148. - Raw water requirement (RWR)Water Supply Requirement (WSR);
residential service.
(a) Residential service for RWR WSR shall include single-family, duplex, multi-
family and mobile home, and multi-family dwelling units.
(1) For residential service to single family, duplex, and mobile home dwelling
units, Tthe formula to calculate the WSR shall be:
RWR
WSR =
1.92 × [(.18 × Number of Dwelling Units) + (1.2 × Net Acres)]
1.92 x [(7.048 x Lot Size) + (12,216.9 x Bedrooms)] / 325,851
Where:
RWR
WSR = Raw water requirement Water Supply Requirement in acre-feet.
Net acres
Lot Size
=
Area of development the parcel for which water service is requested,
in acres square feet, excluding public street rights-of-way, City-
maintained tracts and rights-of-way, ditches, railways or other areas
-5-
typically maintained by persons other than the owner of the premises
or an agent of the owner. For a single-family residential lot greater
than one-half acre in size, the lot size shall be deemed to be one-half
acre for the purpose of this raw water requirement calculation.
Bedrooms
Number of bedrooms on the parcel for which water service is
requested, as determined by the City.
(2) For residential service to multi-family dwelling units (greater than 2
dwelling units), the formula to calculate the WSR shall be:
WSR =
1.92 x [(9.636 x Lot Size) + (13,592.8 x Bedrooms)] / 325,851
Where:
WSR = Water Supply Requirement in acre-feet.
Lot Size
=
Area of the parcel for which water service is requested, in square feet,
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.
Bedrooms
Number of bedrooms on the parcel for which water service is
requested.
(b) In the event an applicant applying for a residential water service permit has, prior
to March 1, 1984, surrendered water rights or otherwise satisfied the requirements of the
City under an earlier water supply furnishing or development program, then the RWR
WSR for that property will be considered satisfied under this Section.
Section 8. That Section 26-149 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-149. - Raw water requirement Water Supply Requirement (WSR);
nonresidential service.
(a) Nonresidential service for WSR shall apply to all services not included in the
residential category and shall include, without limitation, all service to customers for:
commercial,; industrial,; public entity,; group housing, such as nursing homes,
fraternities,; hotels and motels,; and mixed-use customers purposes.
(b) The minimum RWR WSR for water meters up to two and zero tenths (2.0) inches
in diameter are as follows:
Meter Size (inches) RWR (acre-feet)
¾ .90
1.0 3.002.27
1.5 6.004.72
2.0 9.607.91
-6-
(c) The RWR WSR for customers requiring a meter larger than two and zero tenths
(2.0) inches, and for customers requiring two (2) or more meters, shall be determined by
multiplying the applicant's estimate of peak annual use, or the total annual allotment for
the meter or meters, whichever is greater, by one and ninety-two one-hundredths (1.92),
provided that such estimate is first approved and accepted by the Utilities Executive
Director.
(d) Upon application for a water service permit after March 1, 1984, each applicant
who is a nonresidential user shall be assigned an annual allotment of water equal to the
greater of: the RWR WSR as determined pursuant to this Section;and any RWR WSR
that was satisfied at the time of application for nonresidential water service; any
increased annual allotment pursuant to Subsection (g) below; and the volume of the water
furnishing requirement of the City under an earlier water supply furnishing or
development program, as determined by the City. Further, in the event that, pursuant to
Subsection (f) below, a nonresidential user submits more raw water than required under
the provisions of this Subsection, then the annual allotment shall be determined pursuant
to said Subsection (f). When a user uses more water than the annual allotment, as
determined by monthly billing records in a given calendar year, an Excess Water Use
Surcharge in the amount prescribed in § 26-129 will be assessed on the volume of water
used in excess of the annual allotment.
(e) In the case where existing water service to a property is being changed or a new
water service permit is being issued, the utility shall assign an annual allotment and credit
the nonresidential user towards the new water service permit as follows. If an annual
allotment has been assigned, the credit towards the new water service shall be for the
amount of the annual allotment for the property. If the existing credit towards the new
water service is greater than the annual allotment to be assigned for the new water service
permit, no cash refund or water certificates issued by the City shall be provided to the
applicant. If no annual allotment has been assigned, the credit towards the new water
service shall be the amount prescribed in § 26-129 for the existing meters serving the
property. The credit authorized under this subsection is not transferrable.
(ef) In the event an applicant applying for a nonresidential water service permit has,
prior to March 1, 1984, surrendered water rights or otherwise satisfied the requirements
of the City under an earlier water supply furnishing or development program, then the
minimum RWR WSR for that property shall be considered satisfied under this Section.
However, such nonresidential user shall be subject to the Excess Water Use Surcharge
when the annual allotment is exceeded.
(fg) A nonresidential user may increase said user's annual allotment by submitting,
water rights, City certificates or cash in addition to the minimum required, water rights,
water certificates issued by the City, or cash in the amount prescribed in § 26-129 for
each acre-foot of WSR. Such submission, if made on or before December 31, 2007, shall
be deemed to raise the user's annual allotment by an equivalent amount. Such submission,
if made after December 31, 2007, shall raise the user's annual allotment by the amount of
equivalent water rights submitted in acre-feet divided by one and ninety-two one-
-7-
hundredths (1.92). Any increase of a user’s annual allotment will be applied to
subsequent billing and other matters and shall not be applied retroactively.
(gh) Notwithstanding any other provisions of this Division, water certificates issued by
the City under the Agreement, dated May 10, 1971, between the City and the Josh Ames
Ditch Company, shall be subject to the following:
(1) If such certificates are used to meet the RWR WSR upon the annexation
of land into the City, each certificate shall be accepted by the City as fulfilling the
RWR WSR in the ratio of one certificate for each one-eighth (1/8) acre of land
annexed, and if nonresidential service to the annexed land is requested, an annual
allotment shall be imposed that is equal to the applicant’s estimate of peak annual
use on the annexed land, provided that such estimate does not exceed the amount
of water, as determined by the Utilities Executive Director, that can reasonably be
delivered through the number and size of taps in the water service permit issued
for the annexed land, that such estimate is based on the applicant’s documented
intended use(s) of the annexed land, and that such estimate is first approved and
accepted by the Utilities Executive Director. For the purposes of this subsection,
“upon the annexation of land into the City” refers to the one hundred (100) day
period beginning on the day the ordinance of annexation is approved by Council
on second reading.
. . .
(hi) Applicants seeking a temporary water connection under Subsection 26-120(e)(1)
shall meet the RWR modified WSR as set forth in this Subsection and Subsection 26-
150(a)(4) and shall be assigned an annual allotment as set forth in this Subsection. The
RWR modified WSR for such applicants shall be three times the maximum estimated
amount of water that would be applied to the subject native vegetation during one
irrigation season, as determined by the Utilities Executive Director. The annual allotment
shall for such applicants shall be the maximum estimated amount of water that would be
applied to the subject native vegetation during one irrigation season, as determined by the
Utilities Executive Director.
Section 9. That Section 26-150 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-150. - Raw water requirementsWater Supply Requirement (WSR);
satisfaction.
(a) The RWR WSR imposed pursuant to this Division may be satisfied by one (1) or
more of the following methods:
(1) Transfer to the City the following rights to be accepted at the following
rates:
-8-
Colorado-Big Thompson units 1.0 acre foot per unit
North Poudre Irrigation Company shares 4.0 acre feet per share
Water rights acceptable to the City may be transferred to the City. The Water
Board determines which water rights are acceptable to the City and determines the
appropriate conversion factors to be used in determining the yield from each of
the acceptable sources. The determinations of the board are final and conclusive.
(2) Water certificates issued by the City may be submitted in satisfaction of
the RWR. Submittal to the City water certificates issued by the City. The value of
each certificate shall be as stated on the face of the certificate and pursuant to §
26-149(gh), if and to the extent applicable.
(3) A cash payment in the amount prescribed in § 26-129 for each acre-foot of
RWR may be made to the City.Payment of cash in the amount prescribed in §26-
129 for each acre-foot of WSR.
(4) Applicants seeking a temporary water connection under Subsection 26-
120(e)(1) shall meet the RWR by a payment to Utilities in the amount of six
dollars and zero cents ($6.00) per one thousand (1,000) gallons.For applicants
seeking a temporary water connection under Subsection 26-120(e)(1), payment of
cash to Utilities in the amount stated for water service in §26-129(b)(4).
(5) Transfer to the City of the rights identified in this Subsection (5), provided
that the applicant meets the requirements of this Subsection (5). On or before
January 1, 2019, the applicant must submit an application for a water service
permit together with a request to submit rights to meet the WSR pursuant to this
Subsection (5), which shall include proof, to the satisfaction of the Utilities
Executive Director, that the applicant: has owned the rights intended to be
transferred to the City since February 14, 2017; has been pursuing plans to
develop property in the Utilities water service area as evidenced a complete
application for an overall development plan, project development plan, change of
use, or major amendment submitted to the City on or before February 14, 2017;
and acquired said rights for the purpose of meeting the City’s water furnishing
requirements for said property as set forth in an affidavit. If such a request is
approved, the rights approved to satisfy the WSR for said property shall not be
transferred to another property. The water rights that may be transferred to the
City pursuant to Subsection (5) and the conversion factors are as follows:
Arthur Irrigation Company shares 3.442 acre feet per share
Colorado-Big Thompson units 1.0 acre foot per unit
Larimer County Canal No. 2 Irrigating
Company shares
42.687 acre feet per shares
New Mercer Ditch Company shares 30.326 acre feet per share
North Poudre Irrigation Company shares 4.0 acre feet per share
Pleasant Valley and Lake Canal Company 39.74 acre feet per share
-9-
shares
Warren Lake Reservoir Company shares 10 acre feet per share
(b) The satisfaction of the minimum RWR WSR shall be made no later than the time
of issuance of the water service permit. An owner of water rights or City-issued water
certificates issued by the City may submit acceptable water rights and/or City-issued
water certificates them to the City, together with an application for a water service
permit, and will be credited accordingly for raw water value to satisfy, in whole or in
part, on the assessed RWR WSR on such application for a water service permit. Once the
water rights or City-issued water certificate issued by the City and water right have been
designated to satisfy the RWR WSR, or the requirements of the City under an earlier
water supply furnishing or development program for water service, for a particular
premises, they shall not be transferred to another property.
(c) In no case shall the fact that a portion of a property was previously served with
City water excuse the furnishing of water rights WSR when new water service is
requested for other portions of the same property. In the event that a water user is
required to apply for an additional water service permit under the provisions of this
Article for premises already connected to the water utility, the user shall also be required
to satisfy any increase in the assessment of RWR WSR that results from the change in
use or status, prior to the issuance of the new permit.
Section 10. That Section 26-207 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-207. - Terms and abbreviations.
The following terms and abbreviations when used in this Article shall have the meanings
ascribed to them in this Section:
. . .
(2) Abbreviations :
. . .
nm. SIC shall mean standard industrial classification;
on. SPIF shall mean sewer plant investment fee;
po. SWDA shall mean Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq.;
qp. TOC shall mean total organic carbon;
rq. TSS shall mean total suspended solids;
sr. TTO shall mean total toxic organics; and
ts. U.S.C. shall mean United States Code.
mt. RWR WSR shall mean raw water supply requirements;
-10-
Section 11. That Section 26-632 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-632. - Deferral of fees.
With respect to any dwelling unit which is contained within or which constitutes an
affordable housing project as defined in § 26-631, the Water Plant Investment Fee
("WPIF"), Sewer Plant Investment Fee ("SPIF"), Stormwater Plant Investment Fee, the
Raw Water Supply Requirement In-lieu Cash Payment, and the Electric Development
Fees and Charges, as established in this Chapter, shall, upon the request of the applicant,
be deferred until the date of issuance of a certificate of occupancy (whether temporary or
permanent) for such unit(s) or until the first day of December of the year in which the
deferral was obtained, whichever first occurs. Notwithstanding any provision in this
Chapter to the contrary, in the event that, during the period of deferral, the amount of the
deferred fee is increased by ordinance of the City Council, the fee rate in effect at the
time of the issuance of the building permit shall apply. At the time of application for any
such deferral, the applicant shall pay to the City a fee in the amount of fifty dollars
($50.00) to partially defray the cost of administration. No person shall knowingly make
any false or misleading statement of fact in order to obtain any deferral of fees under this
Section.
Section 12. That Section 26-651 of the Code of the City of Fort Collins is hereby
amended to read follows:
Sec. 26-651. - Conditions for furnishing service within growth management area.
. . .
(b) New utility service may be furnished to property which is outside of the City
limits and within the Growth Management Area if the Utilities Executive Director
determines that the provision of such service is consistent with the relevant utility master
plan documents and is in the best interests of the City, the City's utilities and the relevant
utility, and if the following conditions are met:
(1) The utility concerned has surplus capacity over the immediate
requirements for service within the City and the applicant has satisfied any raw
water supply requirement assessed against property to be served with City water;
. . .
Section 13. That Section 26-653 of the Code of the City of Fort Collins is hereby
amended to read as follows:
Sec. 26-653. - Permit is revocable; agreement of user.
(a) So long as a property served is outside the City, any permit for utility services
issued under this Article is revocable and the utility concerned will supply service only to
-11-
the extent that it has surplus capacity over the requirements for service within the City
and only so long as the permittee is in compliance with and abides by the conditions of
the permit, including but not limited to all requirements of this Code applicable to utility
service. The use of City water under this Article does not constitute a relinquishment of
any water or water rights by the City. The City reserves and retains full dominion and
control over its water and water rights and their use. Upon revocation of a water service
permit for water use outside the City and the permanent disconnection of water service,
the City shall remit such raw water supply as has been previously surrendered to the City
by the outside-City user.
. . .
Introduced, considered favorably on first reading, and ordered published this 22nd day of
August, A.D. 2017, and to be presented for final passage on the 5th day of September, A.D.
2017.
__________________________________
Mayor
ATTEST:
_______________________________
Interim City Clerk
Passed and adopted on final reading on the 5th day of September, A.D. 2017.
__________________________________
Mayor
ATTEST:
_______________________________
Chief Deputy City Clerk
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
! ! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
! ! !
!
!
!
!
!
!
! !
!
!
!
! !
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! ! !
!
!
!
!
!
! !
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
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
0 0.5 1 2 3 4 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 2
̈́ǡͷͲͲ ǦȌǡ
̈́ͶͲǤͷǤ
ǡ
̈́ͳͳʹǤͲ̈́ͳʹͻǤͻǤ
ǯȋǡͺͲͲ Ȍǡ
̈́ͳͶǡͶͲͲ
̈́ͳǡͲͲ ǦǤ
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.
DzǦdz ǡ ǡ
Ǥ
Ȅȋ
Ȍ Ǥ
Ǥ ǡ
Ǥ
"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
Ǥ
ǡ ǡǡǡǡ Ǧ ǡ
ǡ ǡ
ǡǡ Ǥ
Requirement based on number of units and lot size. ǡ
ǡ
Ǥ ǡ
ǡ Ǥ
ȋ Ȍ
Ǥ
ǡ ͳͷǡͲͲͲ
Ǥ
Ǥ
ǡ ȋ
Ȍ
Ǥ
ǡ
Ǥ
Ͷ Ȁ ǦǦǡ
Ǥ ǡ ȋ Ȍ
Ȃ Ǧ Ǥ
ͷͷȀͺdzΧdzǡ Ǥ
Ȍ̈́ǡͷͲͲ
ȋ̈́ͷǡͲͲͲ
ȌǤ
ǡ ʹͷ
ȋǤǤ
ǡ ǡǦ
ȌǤ
ǡ
̈́ͳǤͷͳǡʹǤ
ǡǤʹǡ
ǡǤ
ǡ
ǡ̈́ʹͷǡͲͲͲ Ǥ
Ǧ ǡ
̈́ͳͲǡͲͲͲ Ǥ ǡ
̈́ͷǡͲͲͲ Ǥ
ǡ ǡ
ǯ ̈́ͳǤʹ͵Ǥ
Estimated minimum value of anticipated additions to water resource portfolio.
ǡ
Ǥ
̈́ͶǤʹǡ ǯ
̈́ʹǤǡ Ǧ
̈́ʹǤ͵
̈́ʹͲǤͶǤ
̈́ͳǤͷǤ ǡ
Ǥ
ǡǯ
̈́ͳǤ͵ͳǤ
ȋ
ȌǡȋȌǤ
ǡ
ǯ̈́ͺͲͲǤ
ǯ
ǡ Ǥ
ǯǡ
ǯ Ǥ
ǯ ȋ
Ǧ Ȍ Ǥ
Dzdz Ǥ ǡ
ǡȂ
Ǥ ǯǡ
̈́ʹͲǡͲͲͲ Ȃ
̈́ʹʹǤ
ǯ
ǡ
Ǧ
ǡƬ ǡ
Dz Ǥdz
ʹʹͺʹͲͳʹǤ
ǡǦ
ǡ
Ǧ Ǥ
ǡ
Ǥ ǡ ǡ
Dzdz ǡ
Ǥͳ
ǯ ǡ ǦǦ
Ǧ
ȋǤǤǡafter
ȌǤ
Ǥ
ǡ
ǡ Ǥ
ǡ ǡ
Ǥ
Incremental cost approach. Ǧ ǡ
ǯǡ
Ǥ ǡ
ȋ Ȍ
Ǥ
ǡ ǦǦ
ǡ Ǧ
ǦǤ
ȋȌ
ͳ
ȋȌǡ
ǡ
Ǧ ǡǤ
ǡ
ǯ Ǥ
ATTACHMENT 5
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
! ! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
! ! !
!
!
!
!
!
!
!!
!
!
!
! !
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! ! !
!
!
!
!
!
! !
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
! !
!
!
!
!
!
! !
!
!
!
!
!
!
!
!
!
!
!
!
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