Here are some of the common questions we have heard over the past several months. If you would like to submit a question or a comment, please e-mail questions@pwsd.org. You will see the answers reflected in this Q&A section.
< Questions About the Rate Study >
< Questions about the Community Working Group >
< Questions about Operations and Budgets >
< Questions about Conservation >
About the Rate Study
Why did you announce a rate hike and then rescind the action?
Both the board and staff of PWSD believed that the board’s action to raise water rates was in the best interest of the District and its customers. However, a number of our customers clearly disagreed with the nature and the timing of that action. For that reason, we have put a hold on any rate increases while we find a way to more closely involve the public in the rate discussion. We will also commission a formal rate study using impartial, outside experts.
Why didn’t you involve the public in this decision?
The District faces some very severe challenges in maintaining a safe, adequate water supply for our customers and managing in a period of rising costs. Admittedly, however, we could have handled the rate matter better, with more communication. We are remedying this situation now.
Who is doing the rate study?
We have hired Red Oak Consulting, a firm recognized nationally for their expertise in conducting rate studies for water and wastewater agencies. We are also establishing a community working group that will be reviewing this consultant’s work and have input into its final report. While there clearly is a need for a new rate structure, this independent consultant and the working group’s involvement will ensure a transparent process and a thorough professional analysis to create the best and most fair structure possible.
What will the rate study include?
The study will include a long-term financial analysis based on the needs of the District, as well as a cost-of-service analysis that explores a variety of options for ensuring the revenue will be there for capital projects that are critical to our water future.
When will the rate study be done?
We expect completion in August.
Is this just delaying the inevitable rate increases?
We have no preconceived notion of what the study will recommend. However a rate increase is likely, given the daunting challenges of moving from a non-renewable groundwater supply to a renewable surface water supply to meet present and future needs and the fact that rates have not increased in the past four years.
If rates are increased, the public will have been involved in the process and will have gained a fuller understanding of what the increase will accomplish. Once we have the rate study recommendations, which will include input from the community working group, we will then work diligently to get the information out to our ratepayers.
About the Community Working Group
How did you select members of the community working group?
A careful selection process was implemented to ensure that the committee is representative of various parts of the community. Individuals were also selected for their integrity and community involvement.
Do members represent various interests?
Yes. Members were selected specifically to provide a community cross-section. It would not serve our ratepayers or the District to have members who come into the process with their minds made up about the solutions to our challenges.
Why aren’t there any elected officials on the working group?
This is a citizens’ committee, not a political one. We wanted to avoid politicizing the process and want to make sure the committee has the independence it needs to be effective.
What kind of power does the community working group have to make decisions?
The committee is getting access to significant staff information and assisting staff to review the work of the rate consultant. Its input will be reflected in the consultant’s report and recommendations. The committee’s report will also be presented to the board.
It is ultimately the board’s responsibility to make the final decisions on the rate structure based on committee and consultant input.
Will the community working group recommendations be binding on the board?
Community input into the rate study is important but the board has the duty and responsibility to make these important decisions because they were elected to do so.
About Rates
Why do rates need to be increased?
PWSD must collect the cost of providing water and wastewater service to its customers. This cost includes both operation of the systems and capital projects. Due to inflation and additional operation and maintenance costs, the 2009 initial operating budget was an additional $2.5 million over the 2008 budget. The rate adjustment will help cover the increased costs. The District also must cover costs incurred by complying with additional state and federal regulations. In addition we have significant challenges in securing adequate water supplies for the long term.
When were rates last adjusted?
Water rates were last adjusted in 2005. Sewer rates were last adjusted in 2006.
How much will water rates increase?
The rate study by a specialist firm will determine recommendations. Then the board will vote on what rate adjustments will be made.
Are Parker Water rates high?
Rates for customers in the Parker Water district are about average compared to other water providers along the Front Range. A recent rate comparison study shows Parker Water near the middle of 15 other water districts. However, our rates do not rely on what occurs in any other district. We are responsible for covering our costs and achieving our mission of providing a secure water supply.
How are Parker Water operations funded?
Parker Water is primarily funded through water rates and tap fees, which are charged to new customers for connecting or “tapping” into the system. The District’s small, 1.839 property tax mill levy was recently reduced down from 1.985 mills.
What are some of the factors increasing Parker Water’s cost of doing business?
The District has had to absorb a 50 percent increase in electrical power costs since 2005, the time of the last water rate adjustment. The main use of power, besides operating the waste treatment plants, is electrical power supply to draw water from deep groundwater wells. Chemical costs used in the treatment of waste water have also soared. And, the community continues to grow. Parker Water and Sanitation District now has about 16,000 customers, a 27 percent increase since 2005.
Why should current customers pay for the needs of future generations?
Actually, capital improvements and new water resources will benefit current generations, not just our children and their children. Also, it is the current generation of users that is depleting current supplies.
About Operations and Budgets
What steps have you taken to reduce operating costs in these difficult times?
Budget revisions for water operations exceeded $2.4 million and included reductions in salaries ($51,100), Maintenance ($138,000), seminars and training ($65,300), rate-funded capital expenditures ($1,517,600) and many other line items. To see a comparison between the original budget and the revised budget, go here: <Res2009-3 Amended Reduced Budget>
Do you believe that compensation for PWSD executives and other employees is fair and in line with industry standards?
PWSD’s employees are fairly compensated with salaries and benefits that are in line with other public sector organizations. Our employees are committed and motivated and fair salaries and benefits help to keep them with us.
Do you believe that such costs as training, employee retreats and salary increases should be eliminated during a down economy?
We believe that our budget process recognizes and responds to situations in the economy. That is why we examined and eliminated about $1.5 million from our current budget. As with all businesses, we make value judgments about where to cut while still maintaining the capability to fulfill our mission of providing reliable water service. As an example, staff training ensures that complex equipment and treatment and disposal processes work correctly and makes employees more accomplished.
About Conservation
If customers have conserved so well, why do rates have to increase?
Rates need to keep pace with operating costs and with the challenges of obtaining more water for the future. Our fee structure, however, is based on a tiered system that charges more to customers that use more. Thus individuals and businesses that reduce their usage also reduce their costs.
Why don’t you give rebates for such things as low-flow toilets?
We believe the money that would be used for rebates for a few customers is better spent on services and educational programs that help all customers adopt more conservation practices.