Due to the drought, Denver Water is adding a surcharge to GMWSD water. It was up to the district as to how that fee was collected. The decision became complicated as we worked to unravel three separate issues:

1. Is the surcharge to impose water conservation?

2. Is the surcharge for lost revenue due to conservation?

3. What does lost revenue mean for the way GMWSD has been assessing Denver Water’s regular rates?

Drought conditions are serious, and conservation is something we should all support.  Limiting outdoor watering to two days per week should achieve a 20% reduction in water usage, which is a positive outcome. However, reduced water usage also reduces revenue, which is a major issue for Denver Water, as its operating costs remain largely unchanged despite the projected reduced water usage.

Therefore, the surcharge decision was not really about the importance of water conservation – it was to determine a method to replace the lost revenue.

Once the board understood this was mostly a revenue issue, the decision became easier. After all, if the surcharge is for things that everyone uses, like customer service and access to water, then everyone should pay for that equally. From a financial standpoint, whether an individual household or the district as a whole uses less water, Denver Water still must recover the same overall costs.

Therefore, the Board approved a flat monthly fee for all customers. This is a significant policy change because it now includes apartments and multi-family units, which did not pay the surcharge during previous droughts even though they contribute to overall system demand and costs. Furthermore, new development is still permitted during drought conditions, even though that adds water demand, while existing customers are under watering restrictions.

The Board also chose to treat the drought as an emergency, and use reserve funds to cover half of the surcharge cost.  As a result, the temporary additional monthly fee was reduced from approximately $13 to $6.53 per month per single-family equivalent unit, only while the drought continues. To repeat:

New drought surcharge = $6.53 per month per single family equivalent during drought

This was a big decision for the board. Now that we have exposed a base amount that Denver Water must be paid, we can look into ways to distribute this more equally among our users in future budgets