Gypsum Sewer Rate Increase

On January 14, 2020, the Gypsum Town Council approved an ordinance that will increase all wastewater collection and processing base rates by six percent (6%), for both commercial and residential users. Effective, February 1, 2020, monthly residential sewer charges will be $25.44 and monthly commercial sewer charges will be $39.22 per EQR purchased in 2020. Commercial and residential sewer rates will continue to increase by 6% for five years thereafter.

Also included in this ordinance is a tiered commercial rate structure, that will charge an additional $6.00 per thousand gallons of wastewater disposal above the base rate (which includes 15,000 gallons per EQR purchased of wastewater disposal) for any commercial property. 

The rate increase is in preparation for some significant capital costs necessary to expand and improve the Gypsum wastewater treatment facility and is the first sewer rate increase in 13 years.

The Background

In 2018, the Town of Gypsum commissioned a study of our wastewater collection and treatment systems to determine how the town should respond to growth, market trends, demographic shifts, and future regulatory requirements. The study revealed that an expansion of the existing wastewater treatment plant will be required within 10 to 15 years. Further, significant upgrades to the plant will be required in essentially the same timeframe due to the pending regulatory changes. Finally, a segment of the existing collection system does not have enough capacity to handle buildout flows and larger pipes will be needed. The preliminary estimate for the improvements identified in the report range from $24 to $37 million.

While grants and other financing options will be an important component of funding these improvements, it is also important to ensure that customers are being charged equitably and the utility’s financial health is maintained. For this reason, the town completed a rate study in 2019 to determine the rates needed to fund the upcoming capital improvements. A detailed long-term financial model was created based on community growth, projected timing of capital expenditures and expanding operational costs, financed through a combination of grants, loans, and increased user fees. Our financial plan includes significant borrowing (80%) enabled by a 6% user rate increase, each year, for the next six years. The basic concept behind our rate system is that new development pays for plant expansion through tap fees and users pay for operations through monthly user fees. However, system improvements required by process obsolescence, regulatory changes, and technical improvements are legitimately borne by both new development and existing users.

Questions?

If you would like more information on the future wastewater system improvements, the tiered commercial rates, the financing feasibility study, or have questions, please contact Community Development at 970-524-7688 or email jim@townofgypsum.com.