Frisco considers increasing water rates to reduce consumption, address aging infrastructure |

Frisco considers increasing water rates to reduce consumption, address aging infrastructure

Frisco passed an ordinance on first reading to increase the town's water rates on Tuesday.
Stock Photo / Steve Johnson / Pexels

How much should you be paying for your water?

That’s the question Frisco is asking as the town mulls over potential rate hikes for water services in hopes of keeping up with rising operating expenses, incentivizing conservation and funding future capital improvements to the system.

The town of Frisco’s last water rate study was completed in May 2006, spurring the town to adopt a three-percent annual increase across the board for services. The study covered a 10-year period effective through 2016, meaning that the town hasn’t raised water rates in two full years, despite consistent growth in usage during that time.

Frisco’s water usage has grown from over 168 million gallons in 2014 to almost 203 million in 2018. According to the most recent data from the town, residential users far and away logged the highest percentage of use (38 percent of total usage), followed by homeowner associations (26.5 percent) and commercial entities (21.3 percent).

The current operating costs for the town’s water services are about $875,000 a year, and the town received just under $950,000 in revenues from water services in 2018, though town officials feel their rates may be somewhat generous, especially compared to other water providers in the area. Frisco’s current rates include a $4,301 tap fee, along with a base rate of $40.33 per quarter for individuals using up to 18,000 gallons of water, $3.38 per 1,000 gallons for those using between 18,000 and 35,000 gallons per quarter, and $4.47 per 1,000 gallons for those using more than 35,000 gallons per quarter.

Comparatively, Breckenridge, Silverthorne and Dillon all currently charge tap fees in excess of $7,500 and Frisco’s base rate is the lowest among all water providers in the county.

While rate increases may be on the horizon, the town isn’t so much focused on increasing revenues as it is on finding ways to incentivize conservation while maintaining a fund balance capable of keeping up with rising operating expenses.

“I think the purpose of doing a rate adjustment is to meet our goals of the climate action plan, which encourages conservation,” said Bonnie Moinet, Frisco’s finance director. “But of course we have to meet our operating costs and capital needs. … It’s not unlike a business. You have to analyze your rates to make sure you can fund your operations going forward.”

As part of Frisco’s water efficiency goals adopted in 2017, the town is hoping to stabilize demands despite a growing population, aiming to reach 2025 with essentially no change in current production volumes. Some progress has already been made in the area of conservation, as the town was able to reduce municipal water consumption by 30 percent after identifying the source of unaccounted-for water last year. But the primary goal of any increases in water rates would be to encourage residents and businesses alike to reduce their use, a move most easily accomplished by offering financial incentives.

While the study is still in its infancy, the idea is that a new structure could directly correlate water usage with payments, wherein the more water you use the more it will cost you. Theoretically the town could put a third rate tier in place, likely lower than those already established, to incentivize individuals to reduce their water usage and save some money along the way.

“What we’re looking at is changing the range of rates, and maybe increasing the base service fee over time,” said Moinet. “Right now we have a base rate and two tiers. We’re thinking of expanding those tiers, and having three in addition to a base rate. We’re not anywhere close to making that decision yet, but we anticipate there will be a rate increase.”

In addition to potential changes in the rate structure, the town is also considering implementing other incentive programs to get people to reduce their water usage, which could come in the form of offering town subsidies to replace older fixtures with new, low-flow fixtures.

While not a emphasis of the new rate study, the town is also hoping that any changes could help to address concerns regarding potential large-scale capital improvement projects in the near future.

In November 2018, the town suffered a water main break on North Sixth Avenue in the River Pines area of town after a rusted valve blew its top. Frisco public works director Jeff Goble said that upon further inspection, the town discovered that about 2,000 feet of piping was installed completely submerged in water due to high ground water tables in the area. The town fears that water main breaks may become more common in the future if steps aren’t taken to address the issue, a process that would include replacing the main lines with C900 PVC pipe, HDPE service tubing and epoxy coated main line valves. In total, the public works department anticipates a project cost of between $600,000 and $750,000.

Additionally, the town may be required to initiate new water treatment processes at four different water sources serving Frisco due to high levels of lead recently discovered at town testing sites. If the town does add new treatment processes, the cost for additional infrastructure to the water treatment plant and the town’s wells could run anywhere from $350,000 to $455,000. Together, the two projects could combine for as much as $1.2 million, a significant dent in the town’s current $3 million water enterprise fund.

The study is still in its infancy, and the town is planning on reaching out to the public for feedback before moving forward with any set plans. The Frisco Town Council is expected to hold a work session on this issue in late April, and Moinet noted that the town doesn’t anticipate any increases before the fourth quarter this year.

“This is in its early stages,” emphasized Moinet. “We’re not trying to punish any one group of users or discourage development. We’re trying to encourage conservation and maintain our water systems. There will be plenty of opportunity for public comment and participation.”

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