60, 61 and 101 will drive up water rates across Colorado

Many Coloradans get their water from municipal enterprises, including customers of Aurora Water, Denver Water, Fort Collins Utilities and Pueblo Water Works.

These are local enterprises funded by the fees they charge for providing water and other services to their customers. The Bad Three – Amendment 60, Amendment 61 and Proposition 101 – will drive up water rates for these and other customers throughout Colorado.

Amendment 60 requires enterprises and authorities to begin paying property taxes. Because they have few if any revenues outside of the fees they charge for services, local utilities will have to raise rates to cover the costs of property tax bills. Amendment 61 limits local utilities to 10-year bond financing, even though most water projects have useful lives of 30 years or more. Utilities currently finance projects with 20- to 30-year bonds, and limiting repayment to 10 years will cause annual payments to double. Finally, Proposition 101 cuts vehicle ownership taxes, which support water districts in many communities.

Utilities across the state have analyzed the effects of these proposals and what they might do to rates. Here are examples of increases customers can expect:

• If Denver Water were required to pay property taxes on all its land and facilities, the tax burden could be about $20 million in 2010, and it estimates that would trigger a 10 percent rate increase on top of the normal rate increases to fund operations. Limiting bond financing to 10 years will result in another 7 percent increase over the next 10 years.
• Aurora Water would raise water and wastewater fees 15 to 20 percent to pay for property taxes.
• The city of Fort Collins would pay $18 million in property taxes, resulting in a 12 percent increase in water rates.
• Grand Junction estimates the water department would increase rates by 8.5 percent in both 2011 and 2012 to cover the costs of property taxes.
• In Pueblo, the water board estimates that it would need to increase rates by 18 to 20 percent if all three measures pass.
• The Eagle River Water and Sanitation District projects rate increases of 20 to 25 percent for customers from Vail to Edwards if all three measures pass.
• Colorado Springs Utilities customers would see their rates go up 152 percent by 2016 if Amendments 60 and 61 pass. The utility also could be forced to abandon the Southern Delivery System Project.
• Longmont estimates that water rates would go up by 59 percent to pay an estimated $1.9 million in property taxes.
• Loveland City Utilities projects a water rate increase of 12 percent if Amendment 60 passes.
• Westminster estimates that Amendment 60 will result in increases in water bills of $18 to $76 per month.

It makes no sense to impose property taxes on municipal utilities only to have these costs passed on to ratepayers.

This is just one example that shows while purporting to reduce taxes, these complex and convoluted proposals will actually result in many Coloradans being forced to pay higher fees for needed services.