Business Retention and Development Committee Agenda and Packet 2017 10 02

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Table 1: Schedule of Water System Development Charges Meter Size Existing Facilities Proposed Water Resource Total 3/4 $ 25,900 $ 13,100 $ 17,400 $ 30,500 1 $ 46,200 $ 23,400 $ 31,000 $ 54,400 11/2 $ 103,600 $ 52,400 $ 69,600 $ 122,000 LCity of Louisville COLORADO • SINCE 1878 City of Louisville Water and Sewer Tap Fee Increase Effective October 1, 2016 Effective October 1, 2016 water and sewer tap fees will be increasing for all new construction. If you have a building project in process, please contact Cory Peterson at (303) 335-4610 to discuss how this change might impact your project. Tap fees are required to be paid at the time a building construction permit is issued The City of Louisville charges Development Tap fees for new construction to cover growth related costs and construction impact on City utilities. Louisville's water and sewer tap fees include a Facility or Infrastructure Investment Fee which is set to recover an equitable portion of the value of the City's infrastructure required to meet the new demand of the customer on the utility system. The infrastructure includes all components required to divert, distribute and treat water to/from customers. Periodically the City reviews the cost of the infrastructure portion of the tap fees to ensure new users are paying an equitable portion of the overall costs to maintain and improve the utility system. A recent evaluation determined the infrastructure portion of the water and sewer tap fees should be increased to address the utility system's replacement cost. This is based on the value of the improvements made to the system and the replacement costs for the rest of the system since the infrastructure fee was previously set. In addition to the Facility Fee, the water tap fee has a Water Resources Fee set to recover the value of the City's raw water supplies purchased to meet the demand of the new customer. The water resources portion is based on the current market value of the water resources owned by the City. Recent water purchases are used as a basis for determining the current market value. Water purchases are valued in terms of the cost per acre foot (AF) of reliable annual water delivery. Louisville relies upon the value of a unit of the Colorado Big Thompson Project commonly referred to as a CB -T unit. A single CB -T unit provides 0.6 AF of water supply. The market for water rights in Colorado has become even more competitive in recent years and the current market value of CB -T water has reached a price range of up to $25,000 per unit or $41,667 per AF. Louisville has chosen a water resources value of $40,000 per AF to base the water resources component of water tap fees on. Effective October 1, 2016. Tap fees will increase as outlined in the table of fees below as a result of the increase in the cost of water to the City and the increase in the value of the City's water infrastructure since 2014 (the last time water tap fees were adjusted based on system value and current costs).