Estes Park trustees back early water-rate increases as larger utility overhaul takes shape

Estes Park trustees signaled support Tuesday for beginning a major water-rate increase plan tied to the town’s water master plan, while pressing staff to sharpen cost estimates, speed up parts of the schedule and study ways to shift more of the burden to visitors, second-home owners and other nonresident users. Consultants told the Town Board that under a higher-cost scenario, typical residential rates could rise about 15% a year for five straight years to help fund major water-system upgrades, including a new treatment plant.

AE2S, the town’s rate consultant, presented preliminary Phase 1 findings built on the 2026 budget. Consultant Sean Gaddy said the town has not raised water rates since 2022 and now faces significant capital demands with little customer growth to spread the cost. Under a roughly $150 million implementation scenario, the utility’s annual revenue needs would grow from just under $9 million in 2027 to about $21 million to $22 million by 2035, he said. A lower-cost scenario of about $110 million would still require steep initial increases, but could allow the town to ease back to roughly 10% annual increases after the first several years.

The presentation tied the increases to the water master plan’s recommended projects, led by a new water treatment plant as well as storage, pipeline and pump-station work. Gaddy said the model assumes major borrowing for those projects, including a 30-year term and 120% debt-service coverage, and currently plans for a worst-case scenario without grants or loan forgiveness. He said staff built the model to be flexible because project costs, outside funding and final design details will change over time.

Mayor Gary Hall said he was “fully in support” of moving quickly on the initial increases, arguing that going several years without adjustments made the eventual jump harder on the community. Hall also urged staff to accelerate the timeline where possible, saying delays can drive up costs. At the same time, he questioned whether some estimates — especially the projected cost range for work at the Marys Lake treatment plant and some pump-station work — could be reduced through value engineering, saying he would rather see the town land closer to the lower-cost scenario than the $150 million version.

Trustees also focused on who should pay. One trustee said it would cause “heartburn” for residents to see home water bills double while financing infrastructure used by a tourism-based community, and asked how other destinations spread costs to visitors. Jackie, a town staff presenter, said that question is expected to be a central part of Phase 2 of the study, which would examine cost allocation by customer class and whether different rate structures could place more of the burden on guests, seasonal users and commercial customers whose demand patterns drive peak capacity. Gaddy added that tourist communities often also examine outside revenue sources such as sales tax, though he noted that would depend on local legal authority.

Staff said Phase 1 is expected to return to the board later this year for approval of the study and a proposed rate increase after public outreach and hearings. Jackie said outreach will include public meetings, presentations to community groups, bill inserts, videos, website updates and other messaging, with the expectation that rate discussions will draw more public attention than the master plan itself. If the board approves the first phase, staff expects to launch Phase 2 in 2027, with more detailed work on rate design, tap fees and class-by-class cost of service.

The board’s direction at the study session was not a final vote, but trustees broadly endorsed moving ahead with the planning while asking for more comparisons with tourism-heavy communities, more public education and continued work to refine project costs before later decisions on exact rates.