Wellington faces 'hard decisions' as it raises water rates, looks to future
Wellington residents will see a 5% hike in their water and wastewater bills next year as the town grapples to fill a budget shortfall caused by a rainy summer, slowdown in building and an increase in the cost to purchase water.
On Tuesday, the town trustees approved a 5% annual rate hike for 2024-2028 that would cost the average ratepayer and extra $5.37 per month in winter and $12.45 in summer, when more water is used to water lawns. New rates will go into effect Jan. 1.
Trustees also approved an increase in capital investment fees paid by developers from $10,437 for water and $9,742 for wastewater per single-family home to $10,959 and $10,229, respectively.
The 2024 base water rate will go from $49.71 to $52.20 and the usage rate will go from $11.70 to $12.29 for the use of 4,000 to 7,000 gallons.
This is not a new problem for Wellington, which raised water rates and impact fees in 2020 to pay for an expansion of its water and wastewater treatment plants, imposed water restrictions and limited new residential building permits until the expansions are complete.
Once the water and wastewater treatment plant expansions are completed, they should accommodate additional growth for 20 to 30 years, which would generate more building and tap fees, allowing the water and wastewater funds to show a profit.
Currently, however, the water fund will be in a $593,000 hole in 2026 and the sewer fund $700,000 short.
The town is applying for grants, reducing capital projects and negotiating the price of water with North Poudre Irrigation Co., which could help reduce the shortfall in the water budget, said Meagan Smith, deputy director of public works.
Trustees also approved transferring the maximum amount from the general fund to the water and wastewater enterprise funds to reduce the impact to residents. Enterprise funds may only receive up to 10% of the revenue received in the fund from taxpayer transfers through the general fund under the Colorado Taxpayer's Bill of Rights, known as TABOR. The total transfer will reduce the general fund by $935,000 in 2023 and an estimated $1.06 million in 2024.
Mayor Calar Chaussee said in a statement: "This board has worked tirelessly to address financial shortfalls that began before any of us were elected in an effort to minimize the impact to ratepayers moving forward."
By adjusting the rate structure in 2023, maximizing the general fund transfer, and continuing to evaluate ways to lower costs for the utilities, "I am hopeful the rate will continue to be predictable in the future. Water and wastewater service is still an incredible value in Wellington, at less than 0.2 cents per gallon for essential use (3,000 gallons).”
At the same time the town is raising water and sewer rates, it is considering up to 6% merit and cost-of-living raises for workers, a move that didn't sit well with Trustee Jon Gaiter.
"Typically, when you know your business or organization is headed to a hole, you don't keep making it worse and increasing expenses," Gaiter said.
If the town can renegotiate its contract with North Poudre Irrigation Co., "that will solve almost all of our problems" in the water fund, he said. "On the sewer plant, we don't have a magic bullet to solve that problem ... it's a debt we have to pay, and we need to figure out how to address that. We have to stop spending more money; don't add positions, don't increase wages. We need to raise rates and we need to hold things on our end ... keeping expenses flat."
Raises would add about $104,000 to the water and wastewater budgets.
Trustee David Wiegand said the board needs to make some "hard, hard decisions. We have so many things that are out of our control. We don't know how much rain we will get; that directly impacts our income. Building permits? We have no idea. Inflation, interest rates? So many things are out of our control." Residents, he said, are already getting hit hard with higher real estate taxes, water and insurance rates. "We know we will need to do this. We are between a rock and a hard place."
Trustees need to lead by example, Wiegand said. "We've gotta plan for what's best for the people. We have to go with a rate increase" but do it in conjunction with other budget adjustments.
Trustee Rebekka Dailey said she hoped the passion with which trustees talk about reducing costs translates to supporting development. "When we say we need to 'cut costs, cut costs, cut costs,' yet stand up here and make it harder, more complicated or not as welcoming or encouraging for development to occur ... I hope we remember this conversation.
"This fee only happens when we have people who want to come to Wellington to build," she said. "If we aren't welcoming or we don't have staff to support this effort of them coming and being welcomed and having an easy and quick process to build in our community, we are shooting ourselves in the foot and not allowing ourselves to get revenue."
This article originally appeared on Fort Collins Coloradoan: Wellington faces 'hard decisions' as it raises water rates
