HomeMy WebLinkAboutMemo - Mail Packet - 7/16/2019 - Memorandum From Lisa Rosintoski Re: Information And Outreach Plan Regarding Proposed Increase To Excess Water Use Surcharges For 2020Utilities
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222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
fcgov.com/utilities
M E M O R A N D U M
DATE: July 9, 2019
TO: Mayor Troxell and Councilmembers
FROM: Lisa Rosintoski, Utilities Deputy Director, Customer Connections
THROUGH: Darin Atteberry, City Manager
Jeff Mihelich, Deputy City Manager
Kevin R. Gertig, Utilities Executive Director
RE: Information and outreach plan regarding proposed increase to Excess Water Use
surcharges scheduled for 2020
Bottom Line:
City Council may receive comments from current Utilities commercial water customers who will be
impacted by a proposed increase (24%) to the Excess Water Use surcharge. Customers expressed
significant concerns over the last increase (166%, effective January 1, 2018) and some reached out to
Councilmembers. This memo provides background on the Excess Water Use surcharge and details
about the outreach effort to inform affected customers earlier and provide resources (e.g., the new
Allotment Management Program) to mitigate impacts. Staff will share results with Council in fall
2019 (currently slated for October 8 work session).
Key Terms:
Non-residential Water Supply Requirement (WSR): Developers must provide water
supplies to meet the demands of a new development and to ensure a reliable source of supply
in dry years. The WSR methodology is generally reviewed every 5-7 years.
Non-residential: All commercial, industrial, public entity, group housing, nursing homes,
fraternities, hotels, motels, commonly owned areas, club houses and pools; includes HOA
common spaces and irrigation accounts.
Cash-in-lieu (CIL): A developer may pay cash instead of satisfying the WSR through water
rights. Existing customers may pay the CIL rate to increase their allotment. CIL is based on
the cost to develop additional water resources and is reviewed every two years.
Allotment: Annual volume of water associated with a given tap (only taps installed after
1984). This volume is often associated with the WSR satisfied at the time of development, but
a customer may increase their allotment at any time.
Excess Water Use (EWU) surcharge: A volumetric charge assessed on all water used
through the remainder of the calendar year once a customer has exceeded their annual
allotment (in addition to the applicable regular utility rates). This surcharge is tied to the CIL
rate. Revenue from the EWU surcharge goes toward acquiring, developing and improving
Utilities’ water supplies to address the impact of customers exceeding planned water
demands.
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History:
Utilities requires new development to provide water supplies to meet the demands of the new
development. Prior to 1984, these new accounts were not assigned an allotment. Beginning in 1984,
Fort Collins Utilities started assigning new non-residential water taps an annual allotment based on
the volume of the Water Supply Requirement (WSR).
About 1,200 (34%) of non-residential water customers have an allotment. In any given year, around
300 (10%) of non-residential taps exceed their allotment.
Customers typically exceed because:
1. They are using water inefficiently.
2. There has been a change in business type (e.g., gas station turns into a restaurant).
3. The allotment is too small for the property’s water need.
City Council approved significant modifications to the WSR (effective January 1, 2018), which
increased the CIL rate from $6,500 to $17,300, and the EWU surcharge from $3.06 per 1,000 gallons
to $8.14 per 1,000 gallons in excess of the allotment. Some customers faced up to $40,000 in EWU
surcharges in 2018, with over half paying at least $4,000 and 30 paying over $10,000 annually. Over
1,200 staff-hours were spent addressing customer concerns in 2018.
The primary customer concerns were:
1. In specific situations, customers could not mitigate impacts without costly solutions.
2. Dramatic cost increase (166%).
3. Not enough time to prepare for change, water efficiency projects or to factor into annual
budgeting.
Customer Resources:
Staff developed the Landscape Water Budget program, an allotment notification service, expanded
the leak notification service, and worked to get allotment information and use-to-date on the new
Utilities bill after the new Customer Information System is implemented. Learn more at
fcgov.com/commercial-irrigation.
Staff created the Allotment Management Program (AMP), Ordinance No. 050, 2019, to address
Concern 1 above. AMP supports customers whose allotments are too small for the water needs of the
landscape. The program provides qualified applicants a temporary waiver from the EWU surcharges
while they implement a landscape project to permanently reduce water use. Customers can redirect
money that would have been spent on EWU surcharges into a project that will help to minimize or
even avoid surcharges in the future. Learn more at fcgov.com/AMP.
The AMP application period launches in July 2019, and the first waiver will be made available to
customers implementing projects in 2020. AMP will help some, but not all, customers that may be
affected by the proposed 2020 EWU surcharge increase.
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2019 Outreach Plan:
In response to Concerns 2 and 3, staff has developed an outreach plan to inform and support
customers that may be affected by the increase in 2020.
Create an online form for customers to provide written comment.
Notify potentially impacted customers of the 2020 increase and opportunity to provide
comment (letters to approximately 350 customers, emails to 130 customers, July 2019).
o Reach out to customers with the highest potential EWU surcharges via direct phone
calls (July – August 2019).
Public open house to launch the Allotment Management Program (July 9).
o Event advertised through postcards, emails and a newsletter.
Follow-up informational event about AMP and other water efficiency programs and services
(September or October 2019).
As always, staff continues to support customers with strong customer service and connects customers
to the options that work best for them. In addition to these outreach efforts, Utilities Finance is
conducting outreach to developers impacted by the related CIL increase. Information about this was
presented to the Council Finance Committee on July 17.
CC: Lance Smith, Utilities Strategic Finance Director
Carol Webb, Utilities Deputy Director, Water Resources and Treatment Operations
Donnie Dustin, Water Resources Manager
Liesel Hans, Water Conservation Manager
Mark Cassalia, Customer Accounts Manager
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