To Our Valued Customers,
As we work through the 2023 budget planning season, and with inflation on all our minds, we recognize that you may have questions about how Parker Water & Sanitation District (PWSD) determines its rates and fees. Below are some basic principles and information that offer background into how PWSD makes these decisions.
When making a recommendation to the PWSD Board of Directors, staff keeps the following principles in mind:
- First and foremost is the need to focus on maintaining a long-term and sustainable water supply.
- It is necessary to meet all federal and state water and wastewater regulations.
- We need to maintain our water quality while continuously looking for improvement.
- To be competitive, we must provide appropriate salaries, benefits and work environments for our skilled staff.
When reviewing the staff’s recommendations, the PWSD Board of Directors operates on several basic principles:
- Growth pays for growth.
- For instance, new tap fees are dedicated to corresponding growth needs.
- Rate adjustments will be moderated to the Consumer Price Index (CPI). The CPI is maintained by the U.S. Bureau of Labor Statistics to measure the average change over time in the prices consumers pay for goods and services.
- For reference, the CPI for the last 10 years has increased an average of 2.53% annually. During that same period, PWSD’s rates have increased an average of 2.28% annually.
- Additionally, since 2019 the Board has approved reductions to the total mill levy collected by PWSD from 9.507 mills to 7.743 mills. Our plan for 2023 is to continue reducing the total mills collected by PWSD.
- Water is a finite commodity that requires decades long planning and large investments.
In addition to these guiding principles, there are some main categories of expenditures that need to be examined annually to determine the budget and any recommended rate or fee adjustments.
Operations & Maintenance: These are the daily costs associated with purifying and delivering drinking water to your home or business and treating wastewater (i.e., keeping our organization running on a daily basis). Examples include electricity, chemicals, fuel, wages and a portion of debt service. In 2022, we have seen increases in our O&M costs up to 30%, primarily due to inflation in the costs of materials, goods and services.
Capital: These are costs associated with acquiring or maintaining fixed assets, such as water storage tanks, treatment facilities, pipelines, wells and equipment. These projects may be deemed necessary because of new regulatory requirements, system growth, water quality needs, etc.
In 2022 alone, PWSD completed an expansion of the one of our wastewater facilities, built an additional storage building to house refurbished pumps and motors, installed filtration at two of our well houses, and continued work on our Platte Valley Water Partnership long-term water plan. Many of these projects were paid for utilizing system development fees received from new growth. Where possible, we have purchased materials for these projects early in order to lock in prices and combat inflation and supply chain issues.
Growth: Most of PWSD’s growth costs fall under capital expenditures, as new infrastructure must be built to accommodate our growing communities. Growth has recently started to slow due to market conditions, which may make it possible to defer some projects in the short-term.
Debt: As mentioned above, debt service falls under our O&M costs. Earlier in 2022, PWSD was able to leverage our AA+ bond rating to secure a low interest rate of 2.89% on a bond sale shortly before inflation caused rates to increase. This will help us work to minimize any rate adjustments.
We are always looking for ways to responsibly reduce our costs, while also making sure that we can continue to provide high quality water and wastewater services.
Thank you for being a PWSD customer.