What is a rate study?
Rate studies examine how you are charged for water, sewer, drainage or the rate structure (i.e. the formula we use to calculate your bill). Rate studies also examine the rate that you are charged for that service or the amount you pay on your monthly bill.
Rate studies review the “cost of service” for different types of customers (single family residential, commercial, irrigation) to make sure the rates charged for each group are tied to the demands they place on the system.
Rate studies include development of a financial plan for 5-10 years to determine how much money is needed to maintain, upgrade and/or expand the system. Rates are designed to ensure the utility has the money to meet these needs.
Who was on the Utility Rate Citizen Committee (URCC) and what did they do?
The URCC included members of the Planning
Commission, the Citizens Budget Advisory Council, the Citizens Sustainability
Advisory Board and community members at large.
They spent 6 months working with the City and its consultant on the “how” to charge residents for
water, sewer and drainage services or the rate
structure. They prioritized different goals for the rate structure like
– conservation, affordability, revenue stability, ease of understanding, bill
impacts, etc. And then helped to design the rate structure, or formula for
charging different types of customers, to meet those goals. Conservation, equity in rates between
different customer types and affordability were the top objectives selected by
What changes have been proposed to the rate structures (how rates are charged)?
Water Rate Structure Changes:
· Increase in service charge ensure revenue stability (i.e. so you are not relying on revenue that can fluctuate with water use).
· Residential customers will change to a tiered rate for how much you use each month. This helps meet two of the goals of the rate study: 1) encourages conservation and 2) ensures that indoor water use remains affordable and is charged at the lowest cost.
· Irrigation, multifamily, commercial customers will not have a tiered rate. Rates for these customers were adjusted to reflect cost of service. For example, the rates for irrigation only accounts was increased to align with the demand that irrigation customers place on the system (i.e. peaks and high-volume periods).
Sewer Rate Structure Changes:
· The monthly fixed charge has been decreased. It was determined through the rate study analysis that Golden could maintain revenue needs and revenue stability with a decrease that would help to keep rates affordable.
Drainage Rate Structure Changes:The rate study looked at the cost of service for drainage services and how much demand single family residential puts on the system vs. commercial properties and re-aligned these rates to reflect that (i.e. SFR was not paying enough and commercial was paying too much).
What changes have been proposed to the rates (how much we are charged)?
Water rates will increase by 6.2% to maintain the financial health of the utility.
Drainage rates will increase by 12% to maintain the financial health of the utility.Wastewater rates will not change.
How do the new rates compare to other regional utility providers?
How will these changes impact my utility bill?
The impact will vary depending on what type of customer you are: single-family residential, multi-family residential, commercial, or irrigation. For the average single-family residential account, the sum of the changes to rates and the rate structure will be an increase in an average monthly bill of $3.70. In the summer, when irrigating, the increase will be approximately $9.40.
Reminder: the rate structure is how customers are charged for service based on the demands they place on the system (the formula). The rate is the amount the City needs to charge to reach its revenue goals to support ongoing maintenance and investment in the system.
Bill impacts are for a typical single-family residential customer and include:
o The rate structure change to a tiered water rate structure
o The rate structure decrease in the fixed service charge for sewer
o The rate structure re-alignment of drainage service costs to align with demand
o The proposed 6.2% water rate increase for 2020
o The proposed 12% drainage rate increase for 2020