HomeMy WebLinkAboutMemo - Read Before Packet - 11/16/2021 - Memorandum From Donnie Dustin And Lance Smith Re:
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Fort Collins, CO 80522
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M E M O R A N D U M
DATE: November 16, 2021
TO: Mayor Arndt and Councilmembers
FROM: Donnie Dustin, P.E., Water Resources Manager
Lance Smith, Utilities Strategic Finance Director
THROUGH: Kelly DiMartino, Interim City Manager
Gretchen Stanford, Acting Interim Utilities Executive Director
RE: November 16, 2021 City Council Meeting Agenda Item #8 Second reading of
Ordinances No. 151, 202, Amending Chapter 26 of the Code of the City of Fort
Collins to Revise Miscellaneous Water Fees and Charges, Including the Water
Supply Requirement Fee.
As requested, on November 15 at the Council Leadership Planning Team meeting, staff was
asked to provide more information to City Council on the intended use of the expected revenues
from the Water Supply Requirement (WSR) fee.
The revenues from the WSR fee will be used to pay for the future infrastructure (mostly storage
in the Halligan Water Supply Project) and future water rights needed to increase the reliable
be used to meet demands from new and
redevelopment, while also benefiting existing customers. If adopted on second reading, the fee is
anticipated to contribute about $84M towards the Halligan Water Supply Project with the
remainder being covered by rate payers. This calculation assumes a cost of about $195M for
Halligan, which is about $100M more than when the fee was originally calculated. The current
WSR fee methodology (initially developed in 2018) is designed to calculate the cost of
developing an acre-foot of water regardless of who gets the benefit.
The proportional buy-in component of the WSR fee recognizes paying for water assets already in
the Utilities portfolio, but those assets are needed to fill the Halligan project that provides most
of the reliable yield. The proportional buy-in component essentially reflects the cost if new
development had to pay for those water rights elsewhere.
All WSR fee revenues collected will help pay for the future infrastructure and water rights
highlighted to increase water supply reliability, but also can be used to pay for any future water
supply system costs needed such as future pipeline replacements or developing additional
supplies due to climate change. If new growth or redevelopment does not pay its fair portion of
the costs, then the difference will need to be made up by the existing ratepayers via rate
increases.