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Department of Utilities
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Prepared By: Curtis Bauers, Utilities Director
Date Prepared: May 14, 2015
PURPOSE
To consider the implementation of a water surcharge for the purpose of recouping costs associated with significant rate increases by the City of Thornton in the potable water supply under contract with the City of Westminster.
BACKGROUND
The City of Thornton has a perpetual lease agreement with the City of Westminster to lease Westminster two million gallons of potable water per day (plus or minus ten percent), in perpetuity. In order to supplement its existing supply and to assure that Brighton had a sufficient supply to meet peak demands, the City of Brighton entered into an agreement in 2009, leasing that water supply contract from the City of Westminster. Westminster charges Brighton the same fee that Thornton charges, which is at the lowest available rate on Thornton's rate schedule. Therefore, Brighton pays for the potable water supply at the lowest rate in Thornton's rate schedule.
In addition to paying for the volume of water leased daily, Brighton is also charged a carriage charge by Thornton which allows Brighton to use Thornton's water distribution system to carry the water from Westminster to Brighton. This fee is currently $0.20 per thousand gallons and varies based on any rate increases, calculated as the average percentage increase across all rate categories.
Thornton has recently adopted an Ordinance significantly increasing its water rates in all categories over the next three years. Across their entire rate structure there was a 13% increase in rates beginning May 1, 2015 and then an additional 13% percent increase will occur on January 1, 2016 and again on January 1, 2017.
The rates that Brighton pays for volumetric usage are being impacted more heavily than the average increase. The rates Brighton is charged inc...
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