With a continuous need for capital projects due to aging cast iron pipe nearing its end of life, combined with an increase in the cost of construction labor and materials, the district’s monthly service fee will increase to $12 per 3/4” equivalent starting January 1, 2022.
The monthly service fee was established to generate additional revenue to fully fund the necessary capital improvement projects that are identified in the district’s Capital Master Plan (Plan). Additionally, this fee provides funding for the district to continue routine maintenance activities for the district’s water distribution and wastewater collection systems and allows the district to maintain adequate cash reserves. Although the fee is billed through Denver Water’s monthly water bill, this revenue may also be used for wastewater collection maintenance and repairs.
Within the district’s water distribution system is a substantial amount of cast iron pipe that fails regularly, resulting in unplanned outages, property damage and significant emergency repair costs. Fully funding the 10-Year Plan leads to reduced operation and repair expenses by avoiding costly unscheduled repairs and replacements of deteriorating water mains. Most importantly, the accelerated water main replacement program helps avoid unplanned water shutoffs in your neighborhood and reduces the potential for public safety, public health and property damage impacts.
In 2022, construction costs are projected to increase by approximately 20% due to the ongoing supply chain challenges due to the COVID-19 pandemic. The district is currently experiencing costs increases that range from 20-70% on a variety of standard items including PVC pipe, fittings, and valves. The cost of PVC pipe hit an all-time high in 2021 after several chemical plants along the gulf coast were temporarily shut down due to multiple hurricanes and a lightning strike in Louisiana. Also impacting the industry was the fluke cold freeze that took place last February in Texas where several chemical plants were debilitated.
To meet the financial requirements of the scheduled pipe replacement projects and ensure the district can absorb the increased construction costs, the board of directors felt that it was necessary to increase the monthly service fee from $5 to $12 per ¾” equivalent starting January 1, 2022. Without the increase in the service fee, the district runs the risk of depleting its cash reserves as well as risk to public health and safety if unable to perform the proper level of maintenance required to deliver safe, reliable drinking water to our customers.
If you have questions about the fee, please contact the District at email@example.com or 303-979-2333.