Rates & Charges
During the Oct. 27, 2020 Board of Trustees meeting, the Board approved an ordinance adopting changes to the Town's utility fees based on the findings and recommendations of the recently completed Utility Rate Study. The Board selected the option they believe has the least impact on most customers and incentivizes water conservation.
Utility Rate Study
Town of Erie financial policies require the Town to have a formal Utility Rate Study performed on the utility fund (water, wastewater, and storm drainage) charges at least every five years. The last such study was conducted in 2014. In 2019, the Town contracted with Raftelis Financial Consultants to perform the formal utility rate study for water, wastewater, and storm drainage monthly customer charges, water and wastewater tap fees, raw water dedication fees, and storm drainage impact fees.
The key assumptions of the 2020 study were as follows:
- Residential growth: 400 taps per year
- Target Reserves: 90 days of operations, plus 1 year's depreciation expense
- Debt Service Coverage; as required by the respective debt covenants
The goals of the study are to determine the revenue needed to cover annual operations and maintenance costs and capital improvement projects, meet debt service requirements, provide for sufficient operating reserves and maintain the utility's self-sufficiency over a 5-year period.
The Utility Rate Study included all utility customer classifications (Residential, Commercial, Irrigation, and Multi-Family). The summary brochure addresses changes to the Residential & Multi-Family classifications.
2021-2025 Utility Rates
- Is there a penalty for late payment?
Yes. The Town of Erie adds a fee to utility bills for delinquent payment.
All customers are given a single-day grace period after their due date to pay their bill. After that day, a fee that is 1% of the unpaid billing amount is added to the account.
Late Payment Penalties
All customers are given a single-day grace period after their due date to pay their bill. After that day, a fee that is 1% of the unpaid billing amount is added to the customer account.
Let's assume your bill for the month of March was $100 and you did not pay that amount. A 1% fee (or $1) would be added to your account. For the month of April, your bill is $100 again, but now your customer account will reflect an unpaid balance of $201 - covering the month you didn't pay, the current month, and the 1% fee.
Water Shut-Off Procedures
Customers are given one full month to make payment after the due date on their bill. If payment is not made in that month (or a payment plan is not created with the Utility Billing Division), their water service will be disconnected.
Let's use the scenario above: your utility bill was due on Friday, March 24 and you did not pay the bill. A doorhanger would be posted at your residence on the Tuesday a month later - in this case, on Tuesday, April 26. If the required amount isn't paid in full (or a payment plan isn't created) by 10 a.m. on Thursday - our team will begin shut-off procedures on Thursday starting just after 10 a.m.
A total fee of $40 is also added to any account that requires disconnection and reconnection.
Once the necessary payment is made, customers can call to have their water service re-connected again ASAP. Disconnection and reconnection teams work weekdays from 7:30 a.m. to 3 p.m., excluding Town-observed holidays.
- How is my utility bill calculated?
Your monthly utility bill has three components for water, wastewater, and storm drainage services.
Customers are charged for water service through a fixed service charge and a tiered volume charge.
- The fixed service charge covers billing costs and customer costs such as field service crews, meter replacement, and repair.
- The tiered volume charge recovers the cost to collect, treat, and distribute water, as well as fire protection. Water is charged on an actual basis and typically fluctuates each month.
Customers are charged for wastewater service through a fixed service charge determined by your average winter usage for December, January, and February. We do this because typically, all water used is used indoors in these months, so it is a reasonable estimation of your wastewater service needs. Wastewater charges are consistent month-to-month after being updated annually.
Customers are charged for stormwater drainage through a fixed monthly charge.
- How does the Town supply our community with water?
The Town of Erie is committed to providing our more than 34,000 water customers with safe, reliable, high-quality water services essential to everyday life. The Town’s primary water source is the Colorado-Big Thompson Project, which originates on the western slope. Other sources include water stored in Windy Gap and Gross Reservoirs. In emergencies, we have access to Lafayette Water and Lefthand Water. The Town is also actively exploring access to groundwater sources and is always involved in other regional partnerships to address water access into the future.
- How does the cost of Erie’s water compare to our neighbors?
Diverting water from the western slope to the Front Range is a very lengthy, complex, and expensive process. Water is governed in Colorado by the Prior Appropriation Doctrine – or as it’s known in shorthand, “first in time, first in right.” Older cities typically hold senior water rights and younger cities typically have junior rights; Erie is among the latter group, which means our raw water costs are often higher than some of our neighbors.
But youth has its advantages too. For instance, in Colorado and nationwide, many utilities are grappling with funding the expensive prospect of replacing aging infrastructure. Fortunately, as Erie is a younger community, our water customers enjoy the benefits of our modern, efficient infrastructure.
- How do I read my utility bill?
Summary of Responsible Parties' Information
In the upper right of the Utility Bill is the summary of responsible parties’ information; bill due dates, bill amount, and how the bill is set to be paid. (It will only say Paid By Draft if that is set up).
Customer Account Information
Across the top are the responsible parties' name, address, and account number:
Current Billing Period
The next row is the information for the current billing period. Going from left to right; view the:
- Service status: in this example it says active – water is actively being supplied to this location.
- Service dates The town bills water service on a monthly schedule; in this case the range is the 4th of December to the 4th of January, a total of 31 days in this case.
- Bill date: This is the date that the bill was generated by the Town of Erie The Penalty Date: This is the date after which a penalty fee will be assessed
- Due date: This is the date on which the payment must have been received by the Town to avoid any penalty.
Meter Readings and Volume
Moving down a row (and left to right) is the:
- Current meter reading
- Previous month’s reading
- Normalized volume used in this billing period
- Meter Readings: In the example below, the January reading of 472,662 gallons and the December reading of 468,635 gallons, and a billed usage of 4,000 gallons. Even though the math comes out to just over 4,000 gallons, the town rounds to 4,000. The rounding rules are pretty simple: The threshold is 500 gallons: anything less than 499 rounds down to the nearest thousand, and anything more than 500 rounds up to the nearest thousand.
- Summary of charges: This central section covers the breakdown of charges. Starting at the top, we see last month’s bill for $76.60 and the credit of ($76.60) showing that it was paid on time with no adjustments or penalties; with no past-due amount.
- Base water charge: In the example, the charge of $19.36 is determined based on the size of the water-line going into your house.
- Water usage tier 1: In the example, the charge of $22.12 is the 4000 gallons used at the $5.53 per 1,000 gallons for this tier 1 use. Remember, the usage tiers are called out at the bottom of the bill. The cost is $5.53 per 1000 gallons used. So at 4000 gallons, this charge comes to $22.12 or $5.53x4.
- Storm drainage usage: This charge of $11.98 is a base fee for all residential accounts.
Sewer Base Charge: This charge of $10.30 is a base fee for all users.Sewer Usage Charge: This charge of $28.35 is based on the volume of water used.
Bar graph: In the example, the bar graph depicts 9 months of water volume use for this service address from May through January. This address used just under 10,000 gallons in May and over 30,000 gallons in August.
Tier 1 use is 0 through 5,000 gallons at $5.53 per gallon
Tier 2 use is 5,001 through 15,000 gallons at $6.92 per gallon
Tier 3 use is 15,001 through 25,000 gallons at $10.35 per gallon
Tier 4 use is over 25,001 gallons at $15.49 per gallon
If John Doe had used 7000 gallons of water, his usage charge would be $41.49:
Tier 1, $5.53 x 5 = $27.65
Tier 2, $6.92 x 2 = $13.84
Single-family and Townhomes: Water monthly charge per 1,000 gallons:
- What does my utility bill cover?
Your utility bill includes charges for water, wastewater, and stormwater drainage services. The rates you pay on your utility bill cover the costs to provide these services to you. These services are paid for by the revenue generated from utility billing, and these utilities receive no funding from taxes.
- How are utility rates determined?
The Town of Erie financial policies require a formal rate study be performed on the utility fund (water, wastewater, and storm drainage) charges at least every five years. This is an industry best practice to ensure costs are recovered equitably from customer payments.
The most recent study was completed by Raftelis, a nationally recognized independent financial consultant specializing in rate and fee studies for water provider clients across the country. They recommended changes to rates and charges for water and wastewater, with no changes to stormwater drainage charges.
After review, the Town Council then voted to establish the new rates and charges effective in 2021. The changes are revenue-neutral, meaning that the utility fund is anticipated to receive the same amount of revenue in 2021 as it did in 2020. Still, the changes do reflect a focus on the following:
- Providing customers more opportunity to manage water use and their bills
- Emphasizing affordability by reducing the monthly service charge
- Encouraging conservation and rewarding customers who use less water by increasing the volumetric rate
The Town is changing how we charge for water and wastewater service in 2021 to provide affordable, high quality, reliable service that rewards water efficiency. Did you know the cost of water and wastewater services are paid entirely by the rates you pay, not by taxes? Additionally, the Town can use the revenue from water and wastewater rates only for those services; in this way, the Town’s utilities operate as financially distinct “Enterprise” services. To make sure we are consistent with the enterprise approach, the Town, through a nationally-recognized independent consultant, recently reviewed how we charge for these services. Based on this review, we are adjusting rates into a new structure that balances these priorities: affordability, conservation, revenue stability, and equity.
Under the new rates, higher users pay more and lower users to pay less because the rates more closely reflect the actual costs of service. In the new design, about 60 percent of customers will pay less than they do today, and 17 percent will see an increase of less than $50 a year. Learn more about the rates and the Town’s water conservation programs at www.erieco.gov/waterrates.
With input from the Board of Trustees and Town staff, Raftelis designed a rate structure that balances these Town priorities:
- How does the rate structure encourage water efficiency?
Water is a precious and limited resource in Colorado, and most utilities along the Front Range use tiered rates. Tiered water rates reward customers who use less water by charging the least amount per thousand gallons for use in the first tier, and increasingly more as customers use more water and graduate into higher levels.
The lowest rate tier corresponds to an amount of water sufficient to meet essential indoor household needs. Each subsequent tier charges a higher rate and is designed to send a price signal to households when using water for outdoor irrigation.
- How do we ensure that we don’t subsidize new and future neighbors who tie-in to the system?
Tap fees and raw water dedication fees ensure costs that growth incurs on our water, wastewater, and stormwater systems are fully recovered. Often paid by the developer – and passed along to the new homeowner in the purchase price – these are one-time fees charged by the Town at the permitting stage.
In 2021, a 3/4 inch tap fee will increase from $5,200 to $8,860. The raw water dedication fee will increase from $15,300 to $16,243.