Attachment A.pdf

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MEMORANDUM

P.O. BOX 4100 FRISCO, COLORADO 80443

TO: MAYOR AND TOWN COUNCIL

FROM: BONNIE MOINET, FINANCE DIRECTOR

RE: WATER RATE ORDINANCE 19-07

DATE: MAY 28, 2019

Background: The Town last completed a water rate study in May of 2006, effective in January 2007. This study covered a ten year period beginning in 2007 and remained in effect through 2016. Rates have remained unchanged for over two years.

In 2018, Council directed staff to conduct a new five-year study and present various rate alternatives to Council. The Council has held three worksessions on this subject matter. One on November 27, 2018, at which time the Council asked staff to return with more in-depth analysis and recommendations, which was provided during the February 12, 2019 work session. Due to the complixicity of the analysis, and the various options to consider, Council requested additional information, which was provided during the April 23, 2019 work session. During the April worksession, Council provided direction to implement “Alternative 3”, which was identified as the option to meet the goals of the Water Efficiency Plan, encourage conservation, sustain the infrastructure of the water system, and provide a sustainable revenue for the water system based on number of EQRs. The details of this alternative are as follows:

Base and Tiers Usage / gallons Fees and Rates Base Rate none $45/ quarter Tier 1: 0,001 to 8,000 $1.12/1,000 gallons Tier 2: 8,001 to 16,000 $2.24/1,000 gallons Tier 3: 16,001 to 50,000 $4.00/1,000 gallons Tier 4: 50,001 or more $5.00/1,000 gallons

The five-year plan for this alternative reflected a 5% annual increase in all of the above fees and rates and a 10% annual increase in tap fees. The proposed rate changes are planned for implementation in the 4th quarter of 2019.

Analysis: During the April 23, 2019 work session, Council requested staff place the water rates discussion on regular agenda with options to implement between a three percent (3%) and five percent (5%) annual increases. Staff has prepared estimates (see attachments) illustrating revenues generated by annual increases of 3%, 4% and 5% and a graduated annual increase of 3% for the second year of implementation, 4% for the third year and 5% in subsequent years.

The differences between the annual rate increases does not significantly affect the Water Fund fund balance nor the individual users. Please refer to the attachments to this report for more detail.

Ordinance: Water Rates 2019 Town Council Meeting: May 28, 2019

- 2 -

The Town Attorney has prepared the appropriate ordinance (attached), which is complete except for the specific amount the water rates are to be increased. The following questions are provided to assist the Council in providing direction to staff to complete the ordinance for the water rates and the Town’s TAP fees.

1. Does Council approve the rate structure identified as Alternative 3 and shown above in the background section of this memo to become effective October 1, 2019?

2. Does Council approve one of the following options?:

Option 1: 3% annual increase in service fees and usage rates.

Option 2: 4% annual increase in service fees and usage rates.

Option 3: 5% annual increase in service fees and usage rates.

Option 4: 3% annual increase in service fees and usage rates in the second year of implementation, a 4% annual increase in the third year, and 5% annual increase in the 4th and subsequent years.

3. Does Council approve a 10% annual increase in the Town’s tap fees to become effective October 1, 2019?

Financial Impact: Staff has attached several worksheets for your review, demonstrating financial impacts of the proposed optional rate structures. All of the options maintain the Water Fund balance at approximately $2,000,000 year-over-year. The adoption of the Water Efficiency Plan and the addition of conservation programs have led to increases in capital project needs and ongoing revenue. These projects and programs were not known at the time of 2019 budget preparation but are reflected in the projections.

Attachments

A. Water Rate Increase Options # 1 through 4 B. Schedule of Proposed Increased Rates and Tap Fees C. Water Rate Comparison by Type of User – Based on Alternative 3 D. Ordinance for adoption

Reviews and Approvals: This report has been reviewed and approved by:

Bonnie Moinet, Finance Director Nancy Kerry, Town Manager - Approved

Town of Frisco Water Fund Projections - 2019 through 2024 Water Rate Study New Alternative 3 - 3% annual increase

Revenues Revised 2020 2021 2022 2023 2024 No. of taps online 4,443 4,479 4,515 4,551 4,587 4,623

Operating Revenues User Charges:

Base Fees - $45/EQR/Qtr (beginning 4th Q 2019) 199,933 806,211 837,072 869,049 902,161 936,610 Usage Fees (beginning 2020) 759,009 557,069 573,837 591,053 608,822 627,085 Water Meter Sales 5,000 5,000 5,000 5,000 5,000 5,000 Sale of Assets 4,000 4,000 4,000 4,000 4,000 4,000 Investment Income 45,000 45,000 45,000 45,000 45,000 45,000 Loan Repayment from Capital Improvement Fund 30,000 95,000 95,000 95,000 95,000 95,000 Subtotal - Operating Revenues 1,042,942 1,512,280 1,559,909 1,609,102 1,659,983 1,712,695

Capital Contributions No. of taps sold 36 36 36 36 36 36 Plant Investment Fees (10% Increase/year beginning 4th Q 2019) 158,670 170,280 187,308 206,039 226,643 249,307 Subtotal - Capital Contributions 158,670 170,280 187,308 206,039 226,643 249,307 Total Revenues 1,201,612 1,682,560 1,747,217 1,815,141 1,886,626 1,962,002

Expenditures Salaries and Benefits (3% annual increase) 380,631 392,050 403,811 415,926 428,404 441,256 Administrative Fees 42,500 42,500 42,500 42,500 42,500 42,500 Professional Fees 85,000 85,000 85,000 85,000 85,000 85,000 Supplies and Chemicals (3% annual increase) 49,000 50,470 51,984 53,544 55,150 56,804 Utilities (3% annual increase) 70,000 72,100 74,263 76,491 78,786 81,149 Repair and Maintenance (3% annual increase) 62,000 63,860 65,776 67,749 69,782 71,875 General Expenses (3% annual increase) 83,800 86,314 88,903 91,571 94,318 97,147 Water Meter Replacements (3% annual increase) 40,000 41,200 42,436 43,709 45,020 46,371 Total Expenditures 812,931 833,494 854,674 876,489 898,959 922,102

Net Operating Revenue 388,681 849,066 892,543 938,652 987,667 1,039,899

Start at the Tap - 5 year program - $300,000/year 300,000 300,000 300,000 300,000 300,000 Old Meter Replacement 150,000 Slow the Flow Program - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Water Smart - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Capital Outlay 437,000 250,000 1,065,000 1,465,000 1,215,000 500,000

Net Change in Fund Balance -48,319 149,066 -472,457 -826,348 -527,333 239,899

Fund Balance - January 1 3,516,176 3,467,857 3,616,923 3,144,466 2,318,118 1,790,785

Fund Balance - December 31 3,467,857 3,616,923 3,144,466 2,318,118 1,790,785 2,030,685

New Alternative 3 Assumptions: Increase in quarterly service fee; no water usage included in quarterly fee; tiered usage rate changes; rates & service fees increase 3%/year. Tap fees increased 10%/year. 2020: service charge - $45/quarter; Tier 1 - 1-8,000 gal - $.00112/gal; Tier 2: 8,001-16,000 - $.00224/gal; Tier 3: 16,001-50,000 - $.004/gal;

Tier 4: 50,001+ - $.005/gal

Option 1: 3% Increase

Water Rate Study New Alternative 3 - 4% annual increase

Revenues Revised 2020 2021 2022 2023 2024 No. of taps online 4,443 4,479 4,515 4,551 4,587 4,623

Operating Revenues User Charges:

Base Fees - $45/EQR/Qtr (beginning 4th Q 2019) 199,933 806,211 845,199 885,979 928,766 973,408 Usage Fees (beginning 2020) 759,009 552,020 579,437 602,542 624,810 651,686 Water Meter Sales 5,000 5,000 5,000 5,000 5,000 5,000 Sale of Assets 4,000 4,000 4,000 4,000 4,000 4,000 Investment Income 45,000 45,000 45,000 45,000 45,000 45,000 Loan Repayment from Capital Improvement Fund 30,000 95,000 95,000 95,000 95,000 95,000 Subtotal - Operating Revenues 1,042,942 1,507,231 1,573,636 1,637,521 1,702,576 1,774,094

Capital Contributions No. of taps sold 36 36 36 36 36 36 Plant Investment Fees (10% Increase/year beginning 4th Q 2019) 158,670 170,280 187,308 206,039 226,643 249,307 Subtotal - Capital Contributions 158,670 170,280 187,308 206,039 226,643 249,307 Total Revenues 1,201,612 1,677,511 1,760,944 1,843,560 1,929,218 2,023,401

Expenditures Salaries and Benefits (3% annual increase) 380,631 392,050 403,811 415,926 428,404 441,256 Administrative Fees 42,500 42,500 42,500 42,500 42,500 42,500 Professional Fees 85,000 85,000 85,000 85,000 85,000 85,000 Supplies and Chemicals (3% annual increase) 49,000 50,470 51,984 53,544 55,150 56,804 Utilities (3% annual increase) 70,000 72,100 74,263 76,491 78,786 81,149 Repair and Maintenance (3% annual increase) 62,000 63,860 65,776 67,749 69,782 71,875 General Expenses (3% annual increase) 83,800 86,314 88,903 91,571 94,318 97,147 Water Meter Replacements (3% annual increase) 40,000 41,200 42,436 43,709 45,020 46,371 Total Expenditures 812,931 833,494 854,674 876,489 898,959 922,102

Net Operating Revenue 388,681 844,017 906,270 967,071 1,030,260 1,101,299

Start at the Tap - 5 year program - $300,000/year 300,000 300,000 300,000 300,000 300,000 Old Meter Replacement 150,000 Slow the Flow Program - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Water Smart - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Capital Outlay 437,000 250,000 1,065,000 1,465,000 1,215,000 500,000

Net Change in Fund Balance -48,319 144,017 -458,730 -797,929 -484,740 301,299

Fund Balance - January 1 3,516,176 3,467,857 3,611,874 3,153,144 2,355,214 1,870,474

Fund Balance - December 31 3,467,857 3,611,874 3,153,144 2,355,214 1,870,474 2,171,773

New Alternative 3 Assumptions: Increase in quarterly service fee; no water usage included in quarterly fee; tiered usage rate changes; rates & service fees increase 4%/year. Tap fees increased 10%/year. 2020: service charge - $45/quarter; Tier 1 - 1-8,000 gal - $.00112/gal; Tier 2: 8,001-16,000 - $.00224/gal; Tier 3: 16,001-50,000 - $.004/gal;

Tier 4: 50,001+ - $.005/gal

Option 2: 4% Increase

Water Rate Study New Alternative 3 - 5% annual increase

Revenues Revised 2020 2021 2022 2023 2024 No. of taps online 4,443 4,479 4,515 4,551 4,587 4,623

Operating Revenues User Charges:

Base Fees - $45/EQR/Qtr (beginning 4th Q 2019) 199,933 806,211 853,326 903,091 955,737 1,011,501 Usage Fees (beginning 2020) 759,009 552,020 584,980 609,999 644,995 677,142 Water Meter Sales 5,000 5,000 5,000 5,000 5,000 5,000 Sale of Assets 4,000 4,000 4,000 4,000 4,000 4,000 Investment Income 45,000 45,000 45,000 45,000 45,000 45,000 Loan Repayment from Capital Improvement Fund 30,000 95,000 95,000 95,000 95,000 95,000 Subtotal - Operating Revenues 1,042,942 1,507,231 1,587,306 1,662,090 1,749,732 1,837,643

Capital Contributions No. of taps sold 36 36 36 36 36 36 Plant Investment Fees (10% Increase/year beginning 4th Q 2019) 158,670 170,280 187,308 206,039 226,643 249,307 Subtotal - Capital Contributions 158,670 170,280 187,308 206,039 226,643 249,307 Total Revenues 1,201,612 1,677,511 1,774,614 1,868,128 1,976,375 2,086,950

Expenditures Salaries and Benefits (3% annual increase) 380,631 392,050 403,811 415,926 415,926 415,926 Administrative Fees 42,500 42,500 42,500 42,500 42,500 42,500 Professional Fees 85,000 85,000 85,000 85,000 85,000 85,000 Supplies and Chemicals (3% annual increase) 49,000 50,470 51,984 53,544 53,544 53,544 Utilities (3% annual increase) 70,000 72,100 74,263 76,491 76,491 76,491 Repair and Maintenance (3% annual increase) 62,000 63,860 65,776 67,749 67,749 67,749 General Expenses (3% annual increase) 83,800 86,314 88,903 91,571 91,571 91,571 Water Meter Replacements (3% annual increase) 40,000 41,200 42,436 43,709 43,709 43,709 Total Expenditures 812,931 833,494 854,674 876,489 876,489 876,489

Net Operating Revenue 388,681 844,017 919,940 991,639 1,099,886 1,210,461

Start at the Tap - 5 year program - $300,000/year 300,000 300,000 300,000 300,000 300,000 Old Meter Replacement 150,000 Slow the Flow Program - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Water Smart - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Capital Outlay 437,000 250,000 1,065,000 1,465,000 1,215,000 500,000

Net Change in Fund Balance -48,319 144,017 -445,060 -773,361 -415,114 410,461

Fund Balance - January 1 3,516,176 3,467,857 3,611,874 3,166,814 2,393,453 1,978,339

Fund Balance - December 31 3,467,857 3,611,874 3,166,814 2,393,453 1,978,339 2,388,800

New Alternative 3 Assumptions: Increase in quarterly service fee; no water usage included in quarterly fee; tiered usage rate changes; rates & service fees increase 5%/year. Tap fees increased 10%/year. 2020: service charge - $45/quarter; Tier 1 - 1-8,000 gal - $.00112/gal; Tier 2: 8,001-16,000 - $.00224/gal; Tier 3: 16,001-50,000 - $.004/gal; Tier 4: 50,001+ - $.005/gal

Option 3 - 5% Increase

Water Rate Projections - 2019 through 2024 Water Rate Study New Alternative 3 - Graduated annual increase

Revenues Revised 2020 2021 2022 2023 2024 No. of taps online 4,443 4,479 4,515 4,551 4,587 4,623

Operating Revenues User Charges:

Base Fees - $45/EQR/Qtr (beginning 4th Q 2019) 199,933 806,211 837,072 877,423 928,766 982,839 Usage Fees (beginning 2020) 759,009 552,020 573,837 597,186 638,808 657,966 Water Meter Sales 5,000 5,000 5,000 5,000 5,000 5,000 Sale of Assets 4,000 4,000 4,000 4,000 4,000 4,000 Investment Income 45,000 45,000 45,000 45,000 45,000 45,000 Loan Repayment from Capital Improvement Fund 30,000 95,000 95,000 95,000 95,000 95,000 Subtotal - Operating Revenues 1,042,942 1,507,231 1,559,909 1,623,609 1,716,574 1,789,805

Capital Contributions No. of taps sold 36 36 36 36 36 36 Plant Investment Fees (10% Increase/year beginning 2020) 158,670 174,537 191,991 211,190 232,309 255,540 Subtotal - Capital Contributions 158,670 174,537 191,991 211,190 232,309 255,540 Total Revenues 1,201,612 1,681,768 1,751,899 1,834,799 1,948,882 2,045,345

Expenditures Salaries and Benefits (3% annual increase) 380,631 392,050 403,811 415,926 428,404 441,256 Administrative Fees 42,500 42,500 42,500 42,500 42,500 42,500 Professional Fees 85,000 85,000 85,000 85,000 85,000 85,000 Supplies and Chemicals (3% annual increase) 49,000 50,470 51,984 53,544 55,150 56,804 Utilities (3% annual increase) 70,000 72,100 74,263 76,491 78,786 81,149 Repair and Maintenance (3% annual increase) 62,000 63,860 65,776 67,749 69,782 71,875 General Expenses (3% annual increase) 83,800 86,314 88,903 91,571 94,318 97,147 Water Meter Replacements (3% annual increase) 40,000 41,200 42,436 43,709 45,020 46,371 Total Expenditures 812,931 833,494 854,674 876,489 898,959 922,102

Net Operating Revenue 388,681 848,274 897,226 958,310 1,049,924 1,123,242

Start at the Tap - 5 year program - $300,000/year 300,000 300,000 300,000 300,000 300,000 Old Meter Replacement 150,000 Slow the Flow Program - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Water Smart - 5 year program - $10,000/year 10,000 10,000 10,000 10,000 10,000 Capital Outlay 437,000 250,000 1,065,000 1,465,000 1,215,000 500,000

Net Change in Fund Balance -48,319 148,274 -467,774 -806,690 -465,076 323,242

Fund Balance - January 1 3,516,176 3,467,857 3,616,131 3,148,356 2,341,666 1,876,590

Fund Balance - December 31 3,467,857 3,616,131 3,148,356 2,341,666 1,876,590 2,199,832

New Alternative 3 Assumptions: Increase in quarterly service fee; no water usage included in quarterly fee; tiered usage rate changes; rates & service fees increase3%/1st year, 4%/2nd year; 5%/3rd year. Tap fees increased 10%/year. 2020: service charge - $45/quarter; Tier 1 - 1-8,000 gal - $.00112/gal; Tier 2: 8,001-16,000 - $.00224/gal;

Tier 3: 16,001-50,000 - $.004/gal; Tier 4: 50,001+ - $.005/gal

Option 4 - Graduated Increase

Schedule of Proposed Increased Rates and Tap Fees Sample Rate Chage Impact Water Rate Study - 2019

2020 2021 2022 2023 2024 2020 2021 2022 2023 202 2020 2021 2022 2023 2024 Base Rate per EQR/QTR $45.00 $46.35 $47.74 $49.17 $50.65 $45.00 $46.80 $48.67 $50.62 $52.64 $45.00 $47.25 $49.61 $52.09 $54.70 Usage per 1,000 Gal:

1-8,000 $1.12 $1.15 $1.19 $1.22 $1.26 $1.12 $1.16 $1.21 $1.26 $1.31 $1.12 $1.18 $1.23 $1.30 $1.36

8,001-16,000 $2.24 $2.31 $2.38 $2.45 $2.52 $2.24 $2.33 $2.42 $2.52 $2.62 $2.24 $2.35 $2.47 $2.59 $2.72

16,001-50,000 $4.00 $4.12 $4.24 $4.37 $4.50 $4.00 $4.16 $4.33 $4.50 $4.68 $4.00 $4.20 $4.41 $4.63 $4.86

50,000+ $5.00 $5.15 $5.30 $5.46 $5.63 $5.00 $5.20 $5.41 $5.62 $5.85 $5.00 $5.25 $5.51 $5.79 $6.08

New 3% 4% 5% 5% Graduated 2020 2021 2022 2023 2024 2019 $4,300 Base Rate per EQR/QTR $45.00 $46.35 $48.20 $50.61 $53.14 Usage per 1,000 Gal: 2020 $4,730 1-8,000 $1.12 $1.15 $1.20 $1.26 $1.32

2021 $5,203 8,001-16,000 $2.24 $2.31 $2.40 $2.52 $2.65

2022 $5,723 16,001-50,000 $4.00 $4.12 $4.28 $4.50 $4.72

2023 $6,296 50,000+ $5.00 $5.15 $5.36 $5.62 $5.90

2024 $6,925

3% Increase 4% Increase 5% Increase

TAP FEES-10% ANNUAL INCREASE

Option 1 Option 2 Option 3

Option 4

Water Rate Comparison by Type of User - Based on Alternative # 3 2019 Water Rate Study

Base Rate

Tier 1

Tier 2

Tier 3

Tier 4

Annual Annual 5% Increase User Type Billing Billing over Current Residential Low Use $161.32 $209.12 29.63%

Residential High Use $821.88 $1,007.52 22.59%

Residential Low Irrigation $198.50 $325.12 63.79%

Residential Moderate Irrigation $584.34 $705.40 20.72%

Grocery Store $12,051.30 $16,248.84 34.83%

Schools $24,584.02 $30,344.68 23.43%

Preschool $700.16 $1,214.56 73.47%

Motel $2,783.60 $4,923.84 76.89%

Hotel $12,582.96 $18,469.60 46.78%

Car Wash $3,351.50 $4,267.36 27.33%

Café $1,095.87 $1,591.52 45.23%

Restaurant $1,948.56 $3,319.88 70.38%

Gas Station $670.12 $1,047.04 56.25%

Alternative 3 Current Rates Beginning Tier: 1-8,000

$40.33/EQR $45/EQR

Usage included in qtrly fee

1-18,000 No usage incuded in qtrly fee

$3.38/1000 $1.12/1000 18,001-35000 1-8,000

$4.74/1000 $2.24/1000 35,001+ 8,001-16,000

16,001-50,000 $4.00/1000

50,000+ $5.00/1000

TOF.TWR.00469

TOWN OF FRISCO

COUNTY OF SUMMIT

STATE OF COLORADO

ORDINANCE 19 –07

AN ORDINANCE ESTABLISHING, PURSUANT TO SECTION 171-11 OF THE CODE OF

ORDINANCES OF THE TOWN OF FRISCO, THE PLANT INVESTMENT FEES, CAPITAL EQR

SCHEDULES, DELIVERY CHARGES, FLAT RATES, AND USAGE FEES TO BE CHARGED IN

CONNECTION WITH THE TOWN’S WATER SYSTEM.

WHEREAS, the Town of Frisco, Colorado (“Town”) is a home rule municipality, duly organized and existing under Article XX of the Colorado Constitution; and

WHEREAS, this ordinance is adopted pursuant to the Town’s home rule authority in order to protect the public health, safety and welfare by ensuring the continued economic viability of the Town’s water system, and the availability of water during times of drought; and

WHEREAS, Section 171-11.A. of the Code of Ordinances of the Town of Frisco authorizes the Town Council, by ordinance from time to time, to adopt plant investment fees, capital EQR schedules, delivery charges, flat rates and usage fees in connection with its water utility system; and

WHEREAS, the Town Council has directed the preparation of a water rates study by the Town’s Finance Director and Public Works Director to review and analyze the cost of day-to-day operations and ongoing maintenance and improvement of the Town’s water utility system against the revenues generated by or in connection with that system, and to provide information concerning the nature of extraordinary maintenance, capital improvement and capital replacement needs of the water utility system that are anticipated in the future; and

WHEREAS, the Town Council reviewed and discussed the water rates study during work session meetings on February 26, 2019 and April 23, 2019 ; and

WHEREAS, the Town Council finds, based upon the information provided in the water rates study, that the existing water rates, fees and charges of the Town’s water utility system are insufficient to provide the revenue needed for the projected expenses of day-to-day operations, ongoing maintenance and improvement of the Town’s water utility system, and that the rates and rate tiers currently in place do not adequately promote the conservation of water; and

WHEREAS, the Town Council finds that the extraordinary maintenance, capital improvement and capital replacement needs of the water system that are anticipated in the future include, but are not necessarily limited to, improvement of water treatment technology as a result of technological advances or regulatory requirements, re-testing, re-evaluation and possible re-habilitation of certain Town water wells that have been taken off-line, refurbishment of aging water wells and water storage facilities, the drilling of additional water wells to meet peak water production needs upon the build-out of developable portions of the Town, and the replacement of aging water delivery lines, particularly those portions of the Town’s delivery lines that were constructed of cast iron pipes; and

WHEREAS, based upon all of the foregoing, the Town Council finds that the Town’s current plant investment fees and water delivery charges are not sufficient to pay the long term costs of the production and delivery and water by the Town’s water utility system; and

WHEREAS, the Town Council anticipates that the plant investment fees and water delivery charge schedule adopted herein will provide revenues that are sufficient to meet the long term costs of the production and delivery of water by the Town’s water utility system.

NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF FRISCO

THAT:

Section 1. Words and phrases used in this Ordinance shall have the meanings and be defined as set forth in Section 171-2 and 180-9.3 of the Code of Ordinances of the Town of Frisco.

Section 2. The plant investment fees, capital EQR schedule, delivery charges, flat rates and fees to be collected by the Town in connection with the Town’s water system shall be as follows:

A. Plant Investment Fees. New Construction: Beginning on October 1, 2019, for purposes of plant investment fees, one (1) capital EQR equals four thousand three hundred and one dollars ($4,301.00). In each subsequent year to and including the year 2024, the plant investment fee will increase by 10 percent (10%) over the prior year’s fee as of October 1 of each year.

B. Plant Investment Fee Calculation. Plant investment fees shall be calculated, on a capital EQR basis, as follows:

1. Single-family residences, single-family homes and mobile homes established for permanent residences: one and zero-hundredths (1.00).

(a) An “affordable housing” unit as defined in Chapter 180 of the Code of Ordinances of the Town of Frisco (the “Code”), as amended, and which is deed restricted for at least twenty

(20) years to assure the unit is available as a long term rental shall have the Plant Investment Fee assessed at one-third (1/3) of the otherwise applicable rate.

2. Duplexes (two-family units), multifamily residential units, apartments, condominiums, townhouses and similar facilities in the same complex, one and zero-hundredths (1.00) per unit, plus the following if applicable:

(a) Clubhouse: one and five-tenths (1.5).

(b) Laundry facility: five-tenths (0.5) per washing machine.

3. Transient residential units: hotels, motels, dormitories, bed-breakfast (as defined in Community Development Policy Number CD-12) and similar facilities:

(a) Manager's unit: one and zero-hundredths (1.00).

(b) Units without kitchen facilities and with one (1) or two (2) bed spaces: twenty-five hundredths (0.25).

(c) Units with kitchen facilities and one (1) or two (2) bed spaces: seventy-five hundredths (0.75)

(d) Each additional bed space for Subsection B.3 (b) and (c) above: one-tenth (0.1).

(e) Travel trailer/camper park per space available: one and zero hundredths (1.00).

(f) Dormitories, per each bed space: one-tenth (0.1).

(g) For laundry facilities add five-tenths (0.5).

4. Restaurants, bars and lounges:

(a) Business with a seating capacity of fewer than twenty-five (25): one and twenty-five hundredths (1.25).

(b) Second twenty-five (25) seating capacity, or part thereof: eight tenths (0.8).

(c) Each additional twenty-five (25) seating capacity, or part thereof: six-tenths (0.6).

5. Service station:

(a) Without wash rack: one and fifty-hundredths (1.50).

(b) Each wash rack: one and zero hundredths (1.00).

6. Car wash, each rack: one and zero-tenths (1.0).

7. Commercial or public buildings, such as stores, offices and similar uses, having no process water:

(a) Minimum for each building or customer for up to one thousand (1.000) square feet of building area: one and zero-hundredths (1.00).

(b) Each additional one thousand (1,000) square feet of building area, or part thereof: sixty-hundredths (0.60).

(c) Each pair of public rest rooms: forty-hundredths (0.40).

8. Industrial warehouses with no public rest rooms and no process water requirements:

(a) Having less than two thousand (2,000) square feet of gross floor area: one and zero-hundredths (1.00).

(c) Each additional two thousand (2.000) square feet: eighty hundredths (0.80).

9. Churches and nonprofit organization halls (no residence or regular eating facilities): one and zero-hundredths (1.00).

10. Schools, public or private:

(a) Basic rate, per pupil capacity of fifty (50): two and zero-tenths (2.0).

(b) Each additional forty (40) students or fraction thereof: one and zero-tenths (1.0).

11. Swimming pools, hot tubs:

(a) Each twenty-five thousand (25,000) gallons, or fraction there-of, of swimming pool capacity: one and zero-hundredths (1.00).

(b) Hot tubs, other than for single-family use, per one hundred (100) gallons: eleven dollars ($11).

12. Laundromat: one and zero-hundredths (1.00).

(a) Each washing machine: five-tenths (0.5).

13. The rate for commercial or individual users of unusual nature or using process water will be set individually by the Town Council.

14. Out-of-town tap fee will be one and one-half (1-1/2) the otherwise applicable capital EQR.

15. For establishments of any kind falling into more than one (1) category, each separate category will be computed individually and all categories totaled for that establishment's total charge.

16. Businesses of a seasonal nature which are open less than one hundred twenty (120) days per year shall be required to pay tap fees, as provided for above, unless otherwise determined by the Town Council.

C. Minimum Delivery Charges and Usage Charges. Beginning October 1, 2019, a quarterly rate of forty-five ($45.00) per EQR (the “Base Rate” or “minimum delivery charge”) will apply to metered billings which use less than 1000 gallons of water per quarter. Beginning October 1, 2019, the rates per thousand (1000) gallons of water usage per quarter, per usage tier, are as set forth in the Gallons/Rate table below. The usage charges shall be in addition to the Base Rate.

In each subsequent year, to and including the year 2024, the Base Rate, and each of the tiered rates set forth below shall increase [three, four or five] (3, 4 or 5%) percent over the prior year’s rate, respectively, as of October 1 of each year.

ALTERNATIVE: [As of October 1, 2020, the Base Rate and each of the tiered rates set forth below shall increase by three percent (3%) over the then-current rate. As of October 1, 2021, the Base Rate and each of the tiered rates set forth below shall increase by four percent (4%) over the then-current rate. As of October 1, 2022, and each October 1 thereafter to and through October 1, 2024, the Base Rate and each of the tiered rates set forth below shall increase by five percent (5%) over the then-current rate.]

Gallons Rate

No usage included in base rate $45.00 (“Base Rate”)/EQR

1 to 8,000 $1.12 per 1,000 gallons/EQR

8,001 to 16,000 $2.24 per 1,000 gallons/EQR

16,001 to 50,000 $4.00 per 1,000 gallons/EQR

50,001 and greater $5.00 per 1,000 gallons/EQR

Temporary construction water shall be billed at one dollar and fifty cents ($1.50) per thousand gallons used, plus a hydrant connection fee of twenty five dollars ($25).

D. Malfunctioning Meters. There shall be a flat rate for malfunctioning meters in the amount of two

(2) times the Base Rate.

E. Late Payment Charges, Late Notice Fees, Water Shut-Off and Reinstatement Fees.

All water accounts are subject to a finance charge for late payment at an annual percentage rate of eighteen percent (18%) (monthly rate of one and one-half percent (1.5%)) of the total past due balance. For any account with a past due balance, a late payment notice shall be sent to the customer and a fee of five dollars ($5.00) shall be charged to the account for the sending of the notice. For any account with a past due balance in excess of thirty (30) days, a shut-off notice shall be sent to the customer by certified mail, return receipt requested and a fee of ten dollars ($10.00) shall be charged to the account for the sending of the notice. For any customer that does not respond to the shut-off notice within the five (5) days set forth in the notice, a peace officer shall post a shut-off notice on the property and the Water Department shall locate the curb stop and shut off water service to the property. A fee of fifty dollars ($50.00) shall be charged to the account for the shut-off and posting of the notice. For any customer whose water service has been shut off, a reinstatement fee of one hundred dollars ($100.00) shall be charged for the reinstatement of water service.

Section 3. Effective Date. This ordinance shall become effective in accordance with the home-rule Charter of the Town of Frisco, Colorado. Effective October 1, 2019, any prior ordinance or resolution setting forth rates and charges in connection with the Town’s water system are hereby repealed and are of no further force or effect.

INTRODUCED, PASSED ON FIRST READING AND PUBLICATION AND POSTING ORDERED

THIS 28TH DAY OF MAY, 2019.

TOWN OF FRISCO, COLORADO:

Gary Wilkinson, Mayor

ATTEST:

Deborah Wohlmuth, CMC, Town Clerk