Estes Park delays water-rate vote to Nov. 10 on proposed 15% yearly increases

The Estes Park Town Board continued its public hearing on Ordinance 18-26 to Nov. 10, delaying a vote on a consultant's proposal to raise all water rates 15% a year for the first three years.

The consultant who conducted the rate study said the town needs to begin increases now. The town has gone several years without one, he said, has been through a heavy inflationary period and faces a substantial capital plan. "We need to start now. We need to get some increases moving," the consultant said. The last increase for the town's water division was in 2022, and staff estimated the water-system projects will cost between $110 million and $150 million, with a new treatment plant the largest share. The consultant added that Estes Park adds few new utility units each year and has no large industry coming to offset costs, so most future revenue growth would come from rate increases rather than growth.

The consultant estimated that a typical residential customer using 4,500 gallons a month pays right around $80. He described that as a little above the national level but not dramatically higher. Trustee Chris Eshelman said a chart showed a monthly bill rising from about $80 to $232 under the high plan, noting "by 2035 we were up to $232 in your chart."

Eshelman also asked whether 15% is enough to catch up with the utility's needs and rising project costs. The consultant said the firm tested a 25% increase but found that backing it off later would leave the utility generating too much cash seven, eight or nine years out. He called the proposed increases a good balance. Mayor Gary Hall said the town should start aggressively but stay flexible, because conditions years from now are uncertain and changes will likely be needed. Trustee Frank Lancaster agreed with starting aggressively. "I would rather go up and then reduce our increases than say it's something and then have to go more than that," Lancaster said. He calculated that three years of increases compounded is 52%, and five years at 15% is a 101% increase.

Eshelman also questioned some of the project costs built into the plans. He said the roughly $11 million proposed for Mary's Lake felt high to him given that the town plans to mothball the plant. He asked whether the Fall River Estates pump house could be brought closer to what he said similar projects had cost before. Staff said it plans to use 2027 to refine probable construction costs and choose a funding package, weighing WIFIA funding, SRF funding or a combination. Staff said refining the estimates could lower costs in later years but would not change the proposed 15% increases for the first three years.

Staff outlined the condition of the system the money would address. The water distribution system ranges from good to poor, with older pipes suffering recurring leaks, limited looping in some areas and varying pressures. Even newer lines have limited lifespans. Water tank conditions range from moderate to poor, and some pumping facilities have limited backup equipment and controls. The Glacier Creek Water Treatment Plant was designed and built in the early '70s and is planned for decommissioning once a new treatment facility is commissioned. The town's first priorities include replacing the Thunder Mountain water storage tank and starting site selection and preliminary design for a new treatment plant that would use multiple water sources.

The rate study has two phases. The current phase sets initial rates, while phase 2 will look at rate fairness, the rates for residential and non-residential customers, tap fees and other charges. The consultant said he expects to return around July next year with phase 2 recommendations. A staff member said no one attended a drop-in session held for questions about the rate increase. The member said holding two hearings on the measure is the town's tradition, though the member did not think a rule requires it.