Loveland 1996 WC Plan

• Project Type: Water Conservation Plan
• Project Name: City of Loveland Water Conservation Plan
• Title: Water Conservation Plan
• Date: 5/1/1996
• County: Larimer
• Water Conservation - Doc Type: Complete Plan

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Section 3

UTILITY ECONOMICS

Utility Finances

In 1995, Water and Power concluded the 1995 Ulility Rate and System Impact Fee Study
to determine appropriate rates and fees for water, wastewater and stormwater service. The
study used cost-of-service principles to evaluate required rate adjustments for each customer
class. The recommended rates have been adopted and are projected to be sufficient to meet
fiscal obligations. According to the study, the following goals were used in setting rates:

. Rates should be reasonable with each customer paying an equitable share of costs.

. Rates should be sufficient to maintain high quality drinking water and to treat and dis-
pose of wastewater in an environmentally sound and cost-effective manner.

. Funding should be sufficient to meet revenue requirements during the rate period and
capital facilities necessary for growth should be funded from system impact fees.

. Rates should be sufficient to meet revenue requirements and bond covenants,

Revenue

Revenue for water funds are derived from the sale of water, system impact fees, excess
use surcharges and interest income. Of$9,029,191 in 1994 revenue, $6,352,014 came from
the sale of water, $701,377 from interest and $1,975,800 from other revenue sources. Reve-
nues in 1996 are projected to be $8,682,800.

Water Rates

The way customers have been charged for water has gone through many changes
in the past 100 years. In the years before the City supplied water, an enterprising busi-
nessman charged 25 cents for a whiskey barrel of untreated water. In 1887, the Water
Utility was established and charged an annual flat rate, based on the type of dwelling
and the number of fixtures. For a home with five rooms or less, the rate was $12.
Each toilet and bathtub in the house carried an additional $2 fee. For a barber shop or
blacksmith shop, the rate was $10 per year, To keep one horse, cow or other animal
for private use, the fee was $2 per year and additional animals were only $1 a head.

Until 1968, rates were based on a flat fee determined by fixture count, but keep-
ing track of the number of bathrooms and toilet fixtures in homes was difficult. In
July 1968, the City developed a flat rate charge per family based on average water us-
age, and a charge for lawn watering based on lot size, A big change occurred in 1981
when monthly bills began reflecting actual water use with the installation of meters.
A water bill has an account charge and a consumption charge. Loveland has a uni-

May 1996

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Water Conservation Plan