North Forty News
First, it was water, and now it is wastewater, as the Town of Wellington boots up to slog through another big decision that will impact anyone with sewage needs in the Wellington area.
The Town of Wellington Board of Trustees decided to do things differently. They utilized a Resident Roundtable committee to kick off the solution-focused conversations. Members included Community Activities Commission volunteers, Parks Advisory Board volunteers, Chamber of Commerce and Wellington Main Street program board members, town staff, and residents and business owners. The team gathered for four work sessions over the holiday season and presented their recommendations to the Board on January 11, 2022.
Trustee Rebekka Kinney shares, “The round table concept was recommended as a best practice from the Colorado Municipal League during the 2021 conference. I knew we had to bring it to Wellington! Public comment and participation are so important, but the complexity of this issue requires more. True engagement, education, and participation occur through processes like this. I’m so encouraged by these concerned citizens’ time investment and enthusiasm to approach this major consideration productively. Their recommendations are priceless and will be integral in every decision moving forward on this project. Providing a reliable, safe, and resilient utility is our top goal, with the least possible impact on our fees. It’s a tough and very complex decision. I’m grateful for the productive input from this dedicated group of citizens, and I look forward to using this model to address other major topics in our community.”
“On behalf of all involved, we believe this opportunity to learn and provide feedback was amazing and really showed the town’s willingness to listen to citizens,” shared roundtable member Anita Hardy.
Wellington’s Wastewater Plant is 20 years old and, at the current growth rate, will reach capacity by 2024. Twenty years is an average expected lifespan for a wastewater plant, and it has served Wellington’s needs well. In considering what to do, the team is looking at a projected growth of 24,000 citizens by 2040. It currently serves around 12,000 residents. State and Federal regulatory requirements have changed, and upgrades are needed to meet nutrient removal requirements. The Town can be fined $54,833 a day in civil penalties if they do not meet compliance standards by late 2024. The team plans to utilize all the existing facilities and keep the expanded needs well within the current site for the waster water plant. But, upgrades are needed to double the current capacity and meet new, more stringent compliance standards.
Utilities are funded through Impact fees paid by developers and homebuilders, loans and grants, and rates paid by current customers. Expenses include operations, maintenance, and capital improvements. The utility’s financial health requires monitoring and regular periodic rate and impact fees adjustments to keep the enterprise funds balanced. The last time the sewer base rate increased was in 2016, when it went up a dollar to $20.63, and an increase in Sewer Impact Fee went from $7,500 to $9,700 in 2021.
It is not an option for no action to be taken, and the Board of Trustees, town staff, residents, and consultants have explored various options to solve the impact of rate increases. The town staff has been working on this problem for a while. They will do competitive bidding on equipment, materials, and subcontractors to hone in on the best estimate. The Project Needs and Environmental Assessments were completed, and a Public Hearing was held on January 11, 2022, allowing for public comment. This was a required component of attempting to secure a State Revolving Fund Loan (SRF), the most cost-effective funding option available to the Town. Federal funding requires compliance with the National Environmental Policy Act, which will also be incorporated in the final plan.
On January 11, the Resident Roundtable committee members shared their recommendations to the Board, which included the value of including the community in the discussions, being a good steward of taxpayers dollars, being transparent about the plan, having good planning, and having equality in the need for rate increases. They suggested options for maximizing fiscal creativity, such as transferring funds and evaluating loan terms. They requested incremental rate increases, annually assessing the rates and equitability between residential and commercial customers. Finally, they suggested promoting resources that can help cut utility costs, such as the Hardship Utility Grant (HUG) program and water conservation programs. They also requested to continue to be part of the discussions.
A work session on January 18 brought the Town Trustees and Mayor, the Resident Roundtable members, and town staff together to discuss the options and next steps. The group discussed the water rates alongside the wastewater discussion, as the water topic hasn’t settled just yet, and the two issues are related. What goes in must come out.
During the work session, several options were presented to the Board. The proposed sewer rate options include one scenario with a stepped increase to both the base and usage rate and one scenario with a commitment to a portion of the expected American Recovery Plan Act (ARPA) funding ($1,300,000). All the sewer rate scenarios assume a 30-year loan term and a $390,000 transfer from the General Fund to the Sewer Fund. The projected loan will be for $48,000,000 with an anticipated 2.25% interest rate, though the actual loan amount has not yet been finalized. There will be a 5% annual increase to base and usage rate for the subsequent five years. There will be a shortfall in the Town required fund balance reserve policy (110% of annual debt service), with an (up to) 15% deficit for up to 4 consecutive years.
They then went through four scenarios, with different amounts for each scenario’s sewer base and usage rate increases. The Board most liked Scenario 2 and 4, including the stepped increase with ARPA or without. The base rate is based on 0-3k gallons of sewer needs a month with a usage rate per thousand gallons for 4k gallons and up. Starting in 2022, this would mean a base rate of $30-32 and a usage rate of $9-$10. In 2022 it would go up to $40-45 for the base rate and $12-$13 for usage rate per thousand gallons over 3k. In 2024 it would be a $42-$47.25 base rate with a $12.60 – $13.65 usage rate. Discussions will continue to iron out the final numbers.
The average Wellington customer produces around 4k gallons of wastewater per month. They determine this by gauging the average water usage from January through March, assuming that there is limited to no outdoor irrigation during this time.
Timeline-wise, construction is expected to begin in mid-2022, with completion and start-up of the expanded plant happening by mid-2024. It should be complete before those daily penalties for noncompliance with regulatory requirements kick in. Folks will start seeing changes in their sewer bill in May 2022.
The Resident Roundtable was pleased with the January 18 work session outcomes. To reduce the financial impacts to residents, the Board of Trustees is considering transferring funds from the General Fund to the Sewer Fund. This transfer could potentially amount to up to 10% of the total revenues within the sewer fund. This means that funding will have to be cut in other areas, and those areas are still yet to be determined as discussions continue. A sinking fund is being created for the sewer fund from impact fees to plan now for future expansions to avoid large rate increases in the future. There will be further discussion about whether or not the ARPA funding of 1.3 million will go towards the water or sewer fund to help cut costs in other ways. They are reviewing changes to administrative fees currently incorporated in each fund. The budget and expenses are looked at annually since multiple things can change every year, for example, new state and federal legislation or funding opportunities. The Hardship Utility Grant (HUG) fund, designed to help residents pay utility bills, will continue in 2022.
The trustees asked town staff to bring back more details on sewer Scenario #2 and #4 and include a comparison of the ARPA fund options of going towards water vs. sewer. They also asked for a sample bill of the winter and summer months to share the whole picture better. Town staff had 48 hours to pull this off, as the board packet needed to be ready by January 21.
Roundtable member Anita Hardy shares, “I am confident that the Trustees truly heard our concerns with budget efficiencies. I am thrilled to see the recommendations we made were not only listened to but heard, as evidenced by their application in the options presented at the work session. As all the Trustees and quite a few staff members are Town residents, these decisions aren’t made lightly, as they impact not only the community at large but themselves as well.”
Wyatt Schwendeman-Curtis, who served on the Roundtable, shares, “As a member of the Roundtable and a citizen of Wellington, I believe this Resident Roundtable was a tremendous success, and I look forward to the continuation of the Roundtable and presenting ideas to the Board in the future. Since it was a success, I hope that more Resident Roundtables will be utilized for other Town projects.”
The next Board of Trustees Meeting is on January 25 at 6:30 pm at the Leeper Center. They offer a Zoom link for those unable to attend in person. There will be an opportunity for public comment and possible adoption.
While no one wants to have to pay more for their wastewater needs, especially not after increases related to our freshwater needs, the reality is it has to happen. Otherwise, grab your boots, folks; we might be up sewage creek.
For more information visit townofwellington.com.