SUPPLEMENTAL WATER RESOURCE FEE

EFFECTIVE MARCH 7, 2007

On March 7, 2007, the Stonegate Village Metropolitan District Board of Directors adopted a Supplemental Water Resource Fee of $13,504 effective immediately. 

The purpose of the fee is to recover the costs of a new renewable water resource supply and facilities.  The costs of the renewable water resource program were developed by Stonegate's engineer, RG Consulting Engineers, Inc; the costs and methodology of the fee were analyzed by Red Oak Consulting.

Red Oak followed an industry-standard approach to calculate Stonegate's water resource fee.  The incremental cost (or growth fee) approach was followed which requires the separation of the growth-related portion of the water resource capital improvement plan (CIP) from the total.  The fee is then calculated based on the projected number of new single family equivalent connections (SFEs). 

Water Resource Fee Approach

When properly designed, a water resource fee should be a one-time charge to new connections to the system that recovers the District's investments to provide renewable water resources and facilities to new customers.  Under Colorado law, the key to the water resource fees (or rational nexus) is that the District collects these fees from new connections only for its un-recovered investment in available capacity - either existing or planned.  Deficiency remediation should not be included in the fee calculations.

The incremental cost approach for calculating fees is most appropriate for Stonegate's water resource fee.  Under the incremental cost approach, new customers pay a proportionate share of the expansion-related costs of the new water resource facilities.  The fee is calculated using the water resource CIPs developed by RG based on ultimate SFEs to be served by Stonegate and future water requirements. 

Multi-Purpose Project Allocations

Allocating the costs of multi-purpose projects is an integral part of calculating an improvement fee.  A multi-purpose project is an improvement that will serve both growth and address existing needs.  Few projects are designed and built exclusively to serve growth or solve an existing deficiency.  Rather, projects are designed to maximize economies of scale in design and construction.  Therefore, projects serving both growth and rehabilitation/upgrade (i.e., multi-purpose projects) are allocated to growth and non-growth.

Each project in the capital improvement plan was evaluated for how it served the existing users compared to future customers.  For all projects, RG determined that 25.5 percent of the project costs were due to future users.  Existing customers served by Stonegate are responsible for the remaining 74.5 percent of the project costs. 

Capacity Estimation

The estimated number of new users is 1,396.  This takes into consideration projections of the two other areas, Lincoln Park and Compark Business Campus, to which Stonegate provides water and sanitation services.  The actual community of Stonegate has been fully developed and anticipates only a few new users.

Fee Calculation

The water resource fee is calculated based on the cost of the growth-related capital projects, the estimated costs of financing (carrying costs), and the additional capacities estimated by these projects.  Based on the water resource capital improvement plan and the estimated number of future users, the water resource fee per new single family equivalency is $13,503.

For more information or a copy of the adopted resolution implementing the fee, please call 303-858-9909.