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HomeMy WebLinkAbout10-13-2025 - Study Session Agenda PacketSPECIAL STUDY SESSION AGENDA CITY COUNCIL MEETING CITY OF WHEAT RIDGE, COLORADO Monday, October 13, 2025 Will start at the conclusion of the Regular City Council which starts at 6:30 p.m. This meeting will be conducted as a virtual meeting, and in person, at: 7500 West 29th Avenue, Municipal Building, Council Chambers. City Council members and City staff members will be physically present at the Municipal building for this meeting. The public may participate in these ways: • Attend the meeting in person at City Hall. Use the appropriate roster to sign up to speak upon arrival. • Provide comment in advance at www.wheatridgespeaks.org (comment by noon on October 13, 2025) • Virtually attend and participate in the meeting through a device or phone: Click here to pre-register and provide public comment by Zoom (You must preregister before 6:00 p.m. on October 13, 2025) • View the meeting live or later at www.wheatridgespeaks.org, Channel 8, or YouTube Live at https://www.ci.wheatridge.co.us/view Individuals with disabilities are encouraged to participate in all public meetings sponsored by the City of Wheat Ridge. The City will upon request, provide auxiliary aids and services leading to effective communication for people with disabilities, including qualified sign language interpreters, assistive listening devices, documents in Braille, and other ways of making communications accessible to people who have speech, hearing, or vision impairments. To request auxiliary aid, service for effective communication, or document in a different format, please use this form or contact ADA Coordinator, (Kelly McLaughlin at ada@ci.wheatridge.co.us or 303-235-2885) as soon as possible, preferably 7 days before the activity or event. Public Comment on Agenda Items 1. Stormwater Utility Feasibility Study Item No. 1 Memorandum TO: Mayor and City Council THROUGH: Patrick Goff, City Manager FROM: Kent Kisselman, Interim Public Works Director Eric Czaikowski, Infrastructure Project Manager DATE: October 13, 2025 SUBJECT: Stormwater Utility Feasibility Study ISSUE: The City of Wheat Ridge previously adopted a Stormwater Master Plan to address a range of critical needs, including system enhancements to prevent flooding, maintenance of aging infrastructure, and various operational requirements. Recently, the City has also experienced multiple sinkholes attributed to stormwater pipe failures, underscoring the need for sustainable, long-term investment in the stormwater system. Raftelis Financial Consultants, Inc. (Raftelis) has conducted a comprehensive Stormwater Utility Feasibility Study to assess the City's needs and evaluate funding options. Raftelis will present the findings and recommendations of the study, including a proposed framework for implementing a stormwater utility fee that aligns with the City's infrastructure and environmental goals. PRIOR ACTION: • City Council approved a contract with RESPEC Consulting Services on March 25, 2024, for the development of a Stormwater Master Plan • Preliminary results from the Stormwater Master Plan were presented to City Council at the November 18, 2024, study session • City Council adopted a Stormwater Master Plan with RESPEC Consulting Services on May 12, 2025, to improve and provide planning for stormwater infrastructure and operations • Stormwater Rate Study RFP issued and subsequent approval of a contract with Raftelis on July 28, 2025, for the development of a Stormwater Utility Feasibility Study FINANCIAL IMPACT: The contract amount with Raftelis for the Study was $64,390. Providing funding is necessary to bring the items listed in the Stormwater Master Plan into fruition. Most Study Session Memo – Stormwater Utility Feasibility Study October 13, 2025 Page 2 municipalities in the surrounding area rely on a stormwater fee to upgrade and maintain their infrastructure. The chart below illustrates these monthly rates for single family residents. BACKGROUND: Effective stormwater management is a fundamental element of responsible community development. Proper planning, design, and construction of urban drainage systems are essential to protecting properties, structures, and critical infrastructure from flood-related damage and potential loss of life. In Wheat Ridge, continued urban development has significantly reduced opportunities to incorporate traditional stormwater detention facilities that help capture and slowly release runoff. As a result, the City increasingly relies on installing larger underground pipes that convey stormwater directly to major drainageways. At the same time, limited maintenance of the existing stormwater infrastructure has contributed to system degradation, including recent incidents of sinkholes caused by pipe failures. These conditions highlight the growing need for sustained investment in both new infrastructure and maintenance of the current system. To address these challenges, the City adopted the Stormwater Master Plan on May 12, 2025, which provides a comprehensive roadmap for system improvements and operational needs. One of the Plan’s primary recommendations is to conduct a rate study to evaluate the feasibility of establishing a stormwater utility fee as a dedicated funding source. To advance the Master Plan’s recommendations, the City engaged Raftelis to perform a Stormwater Utility Feasibility Study. The study assessed current and future system needs, reviewed best practices from other communities, and developed potential rate structures for a dedicated utility fee. Raftelis has completed its analysis and will present its findings and recommendations to City Council. The proposed stormwater utility fee would create a stable and equitable revenue stream to fund both ongoing system maintenance and critical capital improvements alleviating the pressure currently placed on the City’s General and CIP Funds. Study Session Memo – Stormwater Utility Feasibility Study October 13, 2025 Page 3 Monthly Single Family Residential Fee for Peer Communities Currently the city does not have an Enterprise Fund to provide the necessary revenue for stormwater maintenance and upgrades. An arbitrary amount of $10 per month for Wheat Ridge residents (single family residential (SFR)) was selected to illustrate how much funding would be collected with this fee and the short fall that would need additional funding such as low interest bonds. An impervious area (IA) charge was also used to analyze projected funding. A customer is charged based on impervious surface on the property. Impervious surfaces do not allow stormwater to infiltrate. Greater amounts of IA increase the total volume and peak rates of runoff and lead to increased pollution, thus increasing demand upon the stormwater system and stormwater program. The majority of stormwater utilities across the U.S. use IA exclusively as a basis for their fees. Raftelis used a two-pronged approach to estimate units of service and impervious area. SFR parcels were assumed to be charged a flat rate of 1 equivalent residential unit (ERU) each. Non-single family residential properties, which includes multi-family (greater than three units), industrial, commercial, non-profits, schools, etc. are typically charged a variable rate based on their actual impervious area. The same GIS parcel and $28.46 $26.53 $21.79 $21.66 $18.85 $12.82 $11.75 $11.32 $10.00 $10.00 $9.88 $8.97 $8.72 $8.70 $7.64 $7.50 $6.92 $5.50 $5.36 $2.00 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 Boulder Greeley Denver Englewood Longmont Erie Golden Loveland Wheat Ridge Lyons Littleton Castle Rock Windsor Parker Louisville Arvada Adams County Brighton Pueblo Northglenn Study Session Memo – Stormwater Utility Feasibility Study October 13, 2025 Page 4 aerial imagery data utilized to calculate the ERU were used to estimate impervious surface area on non-single family residential (NSFR) properties via a visual review. Units of service on SFR and NSFR properties were summed up for total units of service. Raftelis developed an open-source Microsoft Excel-based financial model to calculate estimated rates under different funding scenarios based on stormwater program revenue requirements and estimated units of service. The financial model includes proposed O&M expenses, proposed capital renewal and replacement expenses, and additional capital projects. The model allows the user to change the percentage allocation of existing costs, as well as capital project timing and funding approaches to see the impact on proposed rate. The tables below illustrate the revenue requirements based on this rate. Revenue Requirement 2026 - 2030 2026 2027 2028 2029 2030 Operating Expenses Operations $ 366,100 $ 379,500 $ 393,300 $ 407,700 $ 422,800 Maintenance Programs $ 489,000 $ 503,800 $ 519,000 $ 534,600 $ 550,600 Total Operating Expenses $ 855,100 $ 883,300 $ 912,300 $ 942,300 $ 973,400 Non-Operating Expenses Revenue Bond Payments $ - $ - $ - $ - $ 239,100 PAYGO $ - $ 1,803,000 $ 1,486,000 $ 1,723,000 $ 2,993,000 Transfer to Operating Reserve $ 210,900 $ 6,900 $ 7,200 $ 7,400 $ 7,700 Total Non-Operating Expenses $ 210,900 $ 1,809,900 $ 1,493,200 $ 1,730,400 $ 3,239,800 Total Revenue Requirements $ 1,066,000 $ 2,693,200 $ 2,405,500 $ 2,672,700 $ 4,213,200 Study Session Memo – Stormwater Utility Feasibility Study October 13, 2025 Page 5 Revenue Requirement 2031 - 2035 2031 2032 2033 2034 2035 Operating Expenses Operations $ 438,400 $ 454,500 $ 471,200 $ 488,700 $ 506,900 Maintenance Programs $ 567,100 $ 584,000 $ 601,500 $ 619,600 $ 638,100 Total Operating Expenses $ 1,005,500 $ 1,038,500 $ 1,072,700 $ 1,108,300 $ 1,145,000 Non-Operating Expenses Revenue Bond Payments $ 1,535,900 $ 1,535,900 $ 1,796,000 $ 2,304,600 $ 2,304,600 PAYGO $ 1,576,000 $ 2,313,000 $ 1,453,000 $ - $ - Transfer to Operating Reserve $ 7,900 $ 8,100 $ 8,500 $ 8,700 $ 9,100 Total Non-Operating Expenses $ 3,119,800 $ 3,857,000 $ 3,257,500 $ 2,313,300 $ 2,313,700 Total Revenue Requirements $ 4,125,300 $ 4,895,500 $ 4,330,200 $ 3,421,600 $ 3,458,700 RECOMMENDATIONS: Option 1 – Implement a Stormwater Utility Fee in 2026 Direct staff to establish a stormwater utility and implement a monthly stormwater fee (illustratively, $10 per single-family equivalent unit) beginning in 2026. Pros: Creates a dedicated, stable revenue source; reduces reliance on General Fund resources; addresses critical infrastructure needs. Cons: Increases costs for residents and businesses; requires administrative setup and public outreach. Option 2 – Phase-In a Stormwater Utility Fee Over Time Approve the formation of a utility but phase in the fee over two to three years, starting with a lower rate and increasing gradually. Pros: Allows time for public education and smooth adjustment to the new fee; begins generating dedicated revenue. Cons: Slower fund accumulation may delay capital projects; partial reliance on existing Study Session Memo – Stormwater Utility Feasibility Study October 13, 2025 Page 6 funding sources remains. Option 3 – Defer Implementation and Reevaluate Funding Options Continue to fund stormwater improvements through the General Fund, Capital Improvement Program, and potential external funding (grants or low-interest loans) while revisiting the utility concept at a later date. Pros: Avoids immediate new fees; allows time to seek alternative funding sources. Cons: Sustains underfunding of critical stormwater needs; increases long-term costs and risk of infrastructure failures. Staff seeks Council direction on whether to proceed with implementation of a stormwater utility, phase-in approach, or deferment for further analysis. Raftelis will be available at the study session to present findings and answer questions. ATTACHMENTS: 1. Stormwater Utility Feasibility Study CITY OF WHEAT RIDGE Stormwater Utility Feasibility Study FINAL REPORT / September 26, 2025 ATTACHMENT 1 227 W. Trade Street, Suite 1400, Charlotte, NC 28202 www.raftelis.com September 26, 2025 Mr. Eric Czaikowski Infrastructure Project Manager City of Wheat Ridge 7500 West 29th Avenue Wheat Ridge, CO 80033 Subject: Stormwater Utility Feasibility Study Report Dear Mr. Czaikowski: Raftelis is pleased to provide this Stormwater Utility Feasibility Study report to the City of Wheat Ridge (City). The goal of this study was to evaluate the feasibility of implementing a stormwater utility, which included gathering information on the City’s stormwater program and regulatory requirements, calculating revenue requirements, estimating units of service, and calculating estimated rates under a potential fee. The report summarizes the proposed stormwater utility rate structure, units of service analysis, revenue requirements (operations and maintenance, capital and reserves), financial analysis, funding scenarios, policy decisions (both already made and to be made) and implementation considerations. Proposed expenditures and rates have been compared to peer communities to provide an understanding of the jurisdictions to which Wheat Ridge may be compared by the public. Please note that revenue bonds are modeled in the financial scenarios below; however Raftelis is not acting as a Municipal Advisor, and the opinions or views contained herein are not intended to be, and do not constitute “advice” within the meaning of the Municipal Advisor Rule. It has been a pleasure working with you, and we thank you and City staff for the support provided during this study. We look forward to continuing to assist the City. Sincerely, Henrietta Locklear Senior Vice President Contents 1. Introduction .................................................................................. 1 2. Program and Revenue Requirements .......................................... 2 2.1. Current Program and Funding Approach ...................................................................2 2.2. Cost Drivers ...................................................................................................................2 2.3. O&M Costs .....................................................................................................................2 2.4. Capital Project Costs ....................................................................................................4 2.5. Reserve Funds ..............................................................................................................7 3. Data and Units of Service Evaluation .......................................... 8 3.1. Rate Structure Options .................................................................................................8 3.2. Rate Structure Recommendation ................................................................................8 3.3. Data Evaluation .............................................................................................................9 3.4. ERU Determination .......................................................................................................9 3.5. Units of Service Estimation ........................................................................................ 13 4. Funding Evaluation .................................................................... 16 4.1. Total Revenue Requirements and Preliminary Rates .............................................. 16 4.2. Proposed Stormwater Rate Comparisons ................................................................ 18 4.3. Stormwater Credit Program Considerations ............................................................ 20 5. Implementation Considerations ................................................. 21 5.1. Implementation Data Needs ....................................................................................... 21 5.2. Billing Methods ........................................................................................................... 21 5.3. Billing Finalization ...................................................................................................... 22 5.4. Legal and Policy Considerations ............................................................................... 22 5.5. Public Outreach and Engagement ............................................................................. 22 5.6. Implementation and Outreach Schedule ................................................................... 24 Tables Table 1. Operating Costs ......................................................................................................................... 3 Table 2. Maintenance Costs .................................................................................................................... 3 Table 3. O&M Revenue Requirement 2026 - 2030 ................................................................................... 3 Table 4. O&M Revenue Requirement 2031 - 2035 ................................................................................... 4 Table 5. Ranked Priority Projects ............................................................................................................. 4 Table 6. Other Priority Projects ................................................................................................................ 4 Table 7. Regional Stormwater Projects .................................................................................................... 5 Table 8. Capital Project Planned Spending 2026 - 2030 .......................................................................... 5 Table 9. Capital Project Planned Spending 2031 - 2035 .......................................................................... 6 Table 10. Debt Issuance Summary .......................................................................................................... 6 Table 11. Operating Reserve Targets 2026 - 2030 .................................................................................. 7 Table 12. Operating Reserve Targets 2031 - 2035 .................................................................................. 7 Table 13. Single Family Residential Parcel Counts and Representation in the Sample .......................... 10 Table 14. Estimated Units of Service based on Estimated ERU Value ................................................... 15 Table 15. Revenue Requirement 2026 - 2030 ........................................................................................ 16 Table 16. Revenue Requirement 2031 - 2035 ........................................................................................ 16 Table 17. Proposed Rates per ERU 2026 - 2035 ................................................................................... 17 Table 18. Projected Cash Flows 2026 - 2030 ......................................................................................... 17 Table 19. Projected Cash Flows 2031 - 2035 ......................................................................................... 17 Figures Figure 1. Capital Projects Revenue Requirement..................................................................................... 7 Figure 2. Geographic Distribution of SFR Sample .................................................................................. 10 Figure 3. Examples of Measured Impervious Area on Sample Parcels .................................................. 11 Figure 4. Impervious Area Distribution for SFR Sample (by parcel type) ................................................ 12 Figure 5. Sample Minimum, Median, and Max Impervious Area for each SFR Parcel Type ................... 12 Figure 6. Example grid with SFR parcels and roads blacked out ............................................................ 14 Figure 7. Projected Cash Flows 2026 - 2035 ......................................................................................... 17 Figure 8. Monthly NSFR Fee per 3,800 square feet for Peer Communities ............................................ 18 Figure 9. Monthly SFR Fee for Peer Communities ................................................................................. 19 Figure 10. BWSC Stormwater Parcel Viewer Tool ................................................................................. 24 Appendices Appendix: Final SFR Sample List (Parcel Identification Numbers) THIS PAGE INTENTIONALLY LEFT BLANK City of Wheat Ridge / Stormwater Utility Feasibility Study 1 1. Introduction The City of Wheat Ridge (City) is located just west of Denver in Jefferson County, Colorado. It covers 9.5 square miles and has a population of approximately 32,400, as of 2020. The City has grown from a primarily agricultural community to a more modern city with increasingly dense development. The City’s stormwater system has approximately 45 miles of pipes, but given its history, the City’s drainage infrastructure was not proactively planned or developed, and there are significant parts of the city with undersized or no drainage infrastructure at all. In recent years, major system failures highlighted the general system condition, and the City took several critical measures to understand and address the stormwater infrastructure needs. Importantly, Wheat Ridge voters approved ballot measure 2J in November 2023, extending a sales tax to fund, through bond issuance, capital improvements across the city, including enhancing drainage and floodplain infrastructure at high priority areas and critical locations. For a longer-range view, the City also commissioned and completed a stormwater master plan (SWMP), performed by RESPEC Company, LLC (RESPEC), and adopted the final plan in May 2025. This study highlighted critical needs of the stormwater system, including Priority Enhancement Projects, Regional Stormwater Projects, Existing System Repairs, Detailed Drainage Studies, Personnel, and Equipment recommendations. The study also included a conceptual stormwater utility fee analysis. The City also worked with University of Colorado’s Department of Geography and Environmental Sciences to conduct a preliminary funding analysis completed in Spring 2025. The report discussed a general approach to developing a stormwater utility fee, which, if established, could generate revenues to support stormwater operations, maintenance, and capital project delivery. When structured appropriately, stormwater utilities provide an equitable way to fund stormwater management costs because customers pay based on their demand upon the stormwater system. Without a dedicated stormwater fee, the City primarily relies upon tax revenues to fund the stormwater infrastructure program. This can risk funding instability or insufficiency, as funds are subject to reallocation when other City priorities arise. Following the recommendations of the master plan, the City engaged Raftelis to evaluate the feasibility of implementing a stormwater utility, which included gathering information on the City’s stormwater program and regulatory requirements, projecting operations and maintenance (O&M) and capital expenses, estimating units of service, developing a feasible financial plan, and calculating potential rates. The City has significant unmet stormwater management needs, including large investments in stormwater capital infrastructure to address major flooding issues. The City also needs to shift from reactive maintenance to proactive maintenance to more efficiently and cost-effectively operate the system. The City’s current funding strategy does not meet their current stormwater needs and has led to deferred maintenance of the system. The City needs a more stable, dedicated, equitable and revenue-sufficient method to fund its stormwater program moving forward. City of Wheat Ridge / Stormwater Utility Feasibility Study 2 2. Program and Revenue Requirements 2.1. Current Program and Funding Approach The stormwater infrastructure maintenance and related activities are performed by the City’s Department of Public Works personnel. Funding for these activities comes from the City’s General Fund. Day-to-day stormwater management activities include modest infrastructure maintenance, street sweeping and other responsibilities defined primarily by the City’s National Pollutant Discharge Elimination Program (NPDES) Municipal Separate Storm Sewer System (MS4) permit. Some larger capital projects are funded through the 2J bond program, which is backed by sales tax revenue. The lack of a dedicated funding source for stormwater activities means that equipment, personnel, and capital project costs are handled on an as-needed basis, typically in emergency or reactionary circumstances and currently paid through the General Fund. 2.2. Cost Drivers The City does not currently have a defined stormwater program budget, and existing funding is relatively low, so the focus of this analysis are new costs identified and developed through the 2025 RESPEC SWMP and the accompanying report, and supplemental estimates provided by the City. Generally, the City’s stormwater management revenue requirements are related to O&M of the stormwater system and capital project spending. Historically, the City has focused on reactive maintenance needs; therefore deferred maintenance needs to improve the condition of assets and projects to address flooding are a substantial driver of capital expenses. 2.3. O&M Costs Operating costs broadly fit into 3 categories: personnel, equipment, and detailed drainage studies. Personnel costs developed by RESPEC include a new Infrastructure Project Manager to oversee the delivery of stormwater-related capital projects and otherwise improve management of the assets and infrastructure. The City has already filled this position. The SWMP calls for the hiring of a CIP Project Manager and additional operations staff, however, the City does not plan to fill these positions in the near term, so the costs have not been included in the financial model or subsequent stormwater fee rate calculations. The SWMP recommended that the City allocate a certain amount for equipment purchases dedicated to maintaining drainage infrastructure, and that the City conduct detailed drainage studies to better understand current and evolving needs over time. Even though the additional operations staff are not included, the additional equipment costs are included since Public Works staff will likely continue to support stormwater operations and will need specific equipment to maintain the stormwater system. Equipment costs and detailed drainage study costs were estimated over the 10-year period 2026 to 2035 in the master plan. Raftelis used these 10-year estimates to develop annual costs beginning in 2026, incorporating annual inflation in future years. A summary of the annual operating costs included in this analysis is shown below. City of Wheat Ridge / Stormwater Utility Feasibility Study 3 Table 1. Operating Costs Category Annual Costs (2026$) Personnel $118,000 Equipment $138,100 Detailed Drainage Studies $110,000 Total Operations Costs $366,100 The SWMP also recommended multiple maintenance-related activities in support of the stormwater system. Cleaning and televising pipes serves multiple purposes including restoring pipes to their designed cross- sections for conveyance, cataloguing pipe conditions, and identifying which pipes may need to be replaced. This, coupled with Geographic Information System (GIS) mapping, will allow the City to better understand the condition of pipes around the city, manage and track asset inventory, and prioritize replacement and additional maintenance projects. Cleaning and dredging existing detention facilities is a routine and essential maintenance activity for pollution purposes and for flooding mitigation. The City experienced a series of pipe failures in recent years, leading to $700,000 spent on emergency repairs in 2024 alone. The SWMP anticipates recommends an average of $1,200,000 per year for existing system repairs. In order to balance out the funding of this new enterprise fund, the budget ramps up to this spending level, and achieves the equivalent total spending on existing system repairs over the 10-year period. All maintenance costs were quantified over the 10-year period, and the estimated annual costs are shown in the table below. Table 2. Maintenance Costs Category Average Annual Costs (2026$) Clean & Televise Existing Pipes by Zone $ 314,000 Clean/Dredge Existing Detention Facilities $ 135,000 Geographic Information System Mapping $ 40,000 Existing System Repairs $ 1,200,000 Total Maintenance Costs $ 1,689,000 Total annual operations and maintenance costs are $855,100 starting in 2026. These costs are adjusted for inflation over the 10-year period considered in this stormwater utility analysis. The annual revenue requirements for both types of O&M costs are shown below in Table 3 and Table 4. . Table 3. O&M Revenue Requirement 2026 - 2030 2026 2027 2028 2029 2030 Operations $ 372,000 $ 378,200 $ 384,700 $ 391,600 $ 398,800 Maintenance Programs $ 1,089,000 $ 1,089,000 $ 1,889,000 $ 1,889,000 $ 1,889,000 Total $ 1,461,000 $ 1,467,200 $ 2,273,700 $ 2,280,600 $ 2,287,800 City of Wheat Ridge / Stormwater Utility Feasibility Study 4 Table 4. O&M Revenue Requirement 2031 - 2035 2031 2032 2033 2034 2035 Operations $ 406,300 $ 414,200 $ 422,500 $ 431,200 $ 440,400 Maintenance Programs $ 1,889,000 $ 1,889,000 $ 1,889,000 $ 1,689,000 $ 1,689,000 Total $ 2,295,300 $ 2,303,200 $ 2,311,500 $ 2,120,200 $ 2,129,400 As discussed above, these represent new costs, and aside from the recently hired Infrastructure Manager, they do not represent a reallocation of costs currently funded by general fund monies. 2.4. Capital Project Costs The SWMP included 8 ranked priority projects and provided project costs (in 2026$). These projects focus on reducing local flood risk by upsizing undersized or failing pipes and by installing additional pipes as needed. A summary of these projects can be found below in Table 5. Raftelis modeled project delivery timeframes and funding sources in coordination with City staff. Stormwater fee revenue is discussed in Section 4.1. Capital projects below are shown to be funded either with Pay-as-you-go (PAYGO) funding or through debt, which may take the form of revenue bonds or general obligation bonds, both of which would be serviced by stormwater fee revenue as modeled. Bond funding is first introduced in 2028 to allow time for the stormwater fund to collect revenues, build reserves, and improve the financial position of the fund prior to selling revenue bonds. The City should consult its financial advisor and conduct a financial feasibility analysis prior to issuing any debt. Table 5. Ranked Priority Projects Project Priority Total Project Cost Funding Source Funding Year Independence Street Ph1 1 $ 1,635,265 PAYGO 2027 Independence Street Ph2 2 $ 1,283,052 PAYGO 2029 Pierce Street Ph1 3 $ 1,417,498 Debt 2028 Pierce Street Ph2 4 $ 2,344,374 Debt 2030 Holland Street 5 $ 1,175,773 PAYGO 2031 W 32nd Avenue Ph1 6 $ 1,643,583 PAYGO 2034 W 32nd Avenue Ph2 7 $ 2,280,088 Debt 2035 W 44th Avenue 8 $ 4,246,723 Debt 2034 Total Ranked Priority Projects $16,026,400 Another set of projects mentioned in the SWMP are the priority projects that will require further coordination with the Colorado Department of Transportation (CDOT). Based on direction from the City, the two included projects were assumed to only be 50% funded by the stormwater utility fund. The remaining costs are assumed to be paid by CDOT. Table 6. Other Priority Projects Project Full Cost Funding Source Funding Year Kipling Street $1,966,000 Debt 2032 I-70 Frontage Rd $4,853,000 Debt 2034 Total Other Priority Projects $6,819,000 City of Wheat Ridge / Stormwater Utility Feasibility Study 5 The SWMP also contemplated regional stormwater projects totaling $32,000,000 to fund improvements in Clearvale, Lena Gulch, and Lewis Meadows Park. Typically, these types of projects are funded in part by Mile High Flood District (MHFD) so the estimated impact cost to the City is modeled at $16,000,000. Even at this reduced cost, this is the most expensive capital project in the SWMP, so it was broken into three phases and staggered every other year starting in 2031. All projects are assumed to be funded by a revenue bond or similar source. Table 7. Regional Stormwater Projects Project Full Cost Funding Source Funding Year Regional Stormwater Projects Ph1 $5,000,000 Debt 2031 Regional Stormwater Projects Ph2 $5,500,000 Debt 2033 Regional Stormwater Projects Ph3 $5,500,000 Debt 2035 Total Regional Stormwater Projects $16,000,000 Additionally, there are 12 priority repair projects being studied by J&T Consulting at the time of this report. Costs for these projects were not yet available and are therefore not included in this study, however the financial model and future rate projections can be updated with these costs once they are known. The funding source selected for a project can have a significant impact on the overall revenue requirements. The cost of a PAYGO project is typically realized the same year(s) as the project or uses existing fund balance, whereas a project that is financed with debt will spread that cost over an extended period, typically decades. There are a variety of financing options available, many of them offering lower interest rates or, in some cases, interest forgiveness. As discussed above, for the purposes of this study, it was assumed that projects that needed to be financed would be financed with a municipal bond. If the City can secure other means of financing, the potential savings could be used to fund a variety of remaining stormwater needs or increase the spending on maintenance programs to enhance the level of service provided. Table 8 and Table 9 below are the total capital spending each year (after inflation). Table 8. Capital Project Planned Spending 2026 - 2030 2026 2027 2028 2029 2030 Ranked Priority Projects Independence Street Ph1 - $ 1,803,000 - - - Independence Street Ph2 - - - $ 1,560,000 - Pierce Street Ph1 - - $ 1,641,000 - - Pierce Street Ph2 - - - - $ 2,993,000 Capital Project Spending - $ 1,803,000 $ 1,641,000 $ 1,560,000 $ 2,993,000 City of Wheat Ridge / Stormwater Utility Feasibility Study 6 Table 9. Capital Project Planned Spending 2031 - 2035 2031 2032 2033 2034 2035 Ranked Priority Projects Holland Street $ 1,576,000 - - - - W 32nd Avenue Ph1 - - - $ 2,550,000 - W 32nd Avenue Ph2 - - - - $ 3,715,000 W 44th Avenue - - - $ 6,589,000 - Other Priority Projects Kipling Street - $ 1,384,000 - - - I-70 Frontage Rd - - - $ 3,765,000 - Regional Stormwater Projects Regional Stormwater Projects Ph1 $ 5,000,000 - - - - Regional Stormwater Projects Ph2 - - $5,500,000 - - Regional Stormwater Projects Ph3 - - - - $5,500,000 Capital Project Spending $ 6,576,000 $ 1,384,000 $ 5,500,000 $12,904,000 $ 9,215,000 The total Capital Project Spending in the 10-year period is $38,845,400 without inflation, and $43,576,000 with inflation. Table 10 is a summary of each of the debt issuances from the financial model, which shows the debt series, the amount borrowed (par amount) and the annual debt service payment. Importantly, debt payments are assumed to begin the year after the issuance, so payments on the Series 2035 debt do not begin until after the 10-year period. Figure 1 shows the total of PAYGO project spending and bond payments each year. Table 10. Modeled Debt Issuance Summary Series Par Amount Annual Debt Service Series 2028 Debt $ 1,641,000 $ 133,000 Series 2029 Debt - - Series 2030 Debt $ 2,993,000 $ 242,600 Series 2031 Debt $ 5,000,000 $ 405,300 Series 2032 Debt $ 1,384,000 $ 112,200 Series 2033 Debt $ 5,500,000 $ 445,800 Series 2034 Debt $10,354,000 $ 839,200 Series 2035 Debt $ 9,215,000 $ 746,900 City of Wheat Ridge / Stormwater Utility Feasibility Study 7 Figure 1. Capital Projects Revenue Requirement With the use of debt, the total Revenue Requirement for capital projects in the 10-year period is $13,321,600 to support the higher capital spending. This scenario represents a way that a fairly substantial capital plan can be accommodated in a short time frame while keeping rates reasonable, but it also represents a high debt burden, which should be considered carefully by the City, alongside other funding opportunities and extensions to the capital program. 2.5. Reserve Funds Reserves can serve multiple purposes for enterprise funds. They can provide rate stabilization and funds for major cash-funded capital projects. The City does not have a set reserve policy, so Raftelis used standard industry practices to develop the operating reserve requirements in the financial model. The financial model currently has the reserves set at 25% (90 days) of the operating budget starting in year one. The initial transfer to the Operating Reserve is a larger amount, which sets the baseline funding level. In subsequent years, revenue requirements are increased if additional contribution to the fund balance is needed to maintain reserve target levels. The yearly reserve target is shown in Table 11 and Table 12. Table 11. Operating Reserve Targets 2026 - 2030 2026 2027 2028 2029 2030 Total Operating Expense $1,461,000 $1,467,200 $2,273,700 $2,280,600 $2,287,800 Target Days Cash on Hand 90 90 90 90 90 Target Operating Reserve Amount $120,100 $241,200 $560,700 $562,400 $564,200 Table 12. Operating Reserve Targets 2031 - 2035 2031 2032 2033 2034 2035 Total Operating Expense $2,295,300 $2,303,200 $2,311,500 $2,120,200 $2,129,400 Target Days Cash on Hand 90 90 90 90 90 Target Operating Reserve Amount $566,000 $568,000 $570,000 $522,800 $525,100 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Revenue Bond Payments PAYGO City of Wheat Ridge / Stormwater Utility Feasibility Study 8 3. Data and Units of Service Evaluation 3.1. Rate Structure Options A stormwater rate structure may have several components that could serve as proxy for demand. Every component should be considered from the standpoint of fairness and proportionality to cost drivers to promote the rate structure’s legal defensibility and appropriateness given the particular costs of the stormwater program. The following three elements are often used in stormwater rate structures, with the first being by far the most common: 1. Impervious area (IA) charge – Customer is charged based on impervious surface on the property. Impervious surfaces do not allow stormwater to infiltrate. Greater amounts of IA increase the total volume and peak rates of runoff and lead to increased pollution, thus increasing demand upon the stormwater or combined storm-sewer system and stormwater program. The majority of stormwater utilities across the U.S. use IA exclusively as a basis for their fees. 2. Gross area (GA) charge – A customer’s fee could also be based in part on the overall size of the parcel. By itself, GA doesn’t directly correlate with all stormwater cost drivers like IA does, but it does correspond to some of them, especially if land use is also a consideration. It should be noted that a rate structure that considers both GA and IA tends to shift cost recovery to customers who own larger parcels. 3. Fixed or minimum charge – Every customer could be required to pay a fixed or minimum charge to cover the costs of stormwater utility administration or other general program costs, which are distributed evenly among all customers regardless of customer class or property characteristics. For example, it costs the same amount to generate a bill for a commercial customer as it does for a residential customer. However, while this fixed charge can fairly recover some costs, adding this type of charge tends to shift program costs to smaller customers, and adds complexity. The most common stormwater rate structure in the U.S. and Canada is an impervious area rate structure,1 with the units of charge being equivalent residential units, or ERUs. An ERU is a unit of measurement that is developed for each utility and is typically determined as the median size of impervious area on residential parcels within the utility’s service area. Alternatively, the utility may use a preset unit of measurement as its standard unit, such as an increment of 1,000 SF of IA. The ERU is considered the best practice in the industry as it establishes parity between the residential and non-residential customer classes and accurately represents the proportionate burden on the stormwater conveyance system. Depending on the way the rate structure is designed, the ERU can also represent a simplified approach to billing single family residential properties to limit the need for individual impervious area measurements. 3.2. Rate Structure Recommendation Raftelis recommends the City implement an impervious area-based rate structure to equitably distribute stormwater management costs amongst customers based on their demand on the stormwater system. An impervious area ERU based rate structure is the most common rate structure for stormwater utilities in 1 Western Kentucky University Stormwater Utility Survey 2024. Accessed on 2/10/2025. https://digitalcommons.wku.edu/seas_faculty_pubs/20/ City of Wheat Ridge / Stormwater Utility Feasibility Study 9 Colorado and across the United States2. Impervious area serves as a rationale nexus between stormwater fees and the demand on the system, because the more impervious area a property has, the greater the volume and rate of runoff it contributes during storms, and the greater the demand for the utility’s stormwater management services. Typically, the first step to calculate impervious area-based rates is to estimate the total number of stormwater billing units (units of service) based on the total impervious area in the City classified into single family residential (SFR) and non-single family residential (NSFR) properties. Generally, the units of service value is the denominator by which the total revenue requirements are divided in order to calculate rates. This analysis uses the ERU as the billing unit. 3.3. Data Evaluation Raftelis’ analysis was based on 2022 aerial imagery from the Denver Regional Aerial Photograph Project (DRAPP)3 and current parcel data provided by the City. Parcels were classified into single-family residential (SFR) and non-single family residential (NSFR) categories based on the “STTSTRC” attribute in the parcel dataset. Classification of parcels into the SFR and NSFR categories was developed independently but aligns with the University of Colorado Stormwater Infrastructure Analysis Report.4 Initially, Raftelis’ SFR parcels included single family, duplex, triplex, and townhomes. NSFR parcels include all parcels not falling into the SFR category, including multi-family, industrial, commercial, schools, non-profits, etc. 3.4. ERU Determination An ERU reflects the typical amount of impervious area on an SFR parcel and allows for simplified billing of the largest customer group – single family residential properties. The ERU is often used as the base billing unit since most SFR properties are similar and treating them uniformly is both simple to understand and simple to administer. Raftelis developed the Wheat Ridge-specific ERU value via the method described below. 3.4.1. Sample Selection A random sample of 400 was selected from Single Family, Duplex, Triplex, and Townhome parcels (Table 13). A sample size of 400 parcels out of a total of 9,816 parcels was selected to provide a statistical confidence level of 95% that the true ERU value is within a margin of error of less than 5 percent. 2 https://www3.epa.gov/region1/npdes/stormwater/assets/pdfs/FundingStormwater.pdf 3 https://data.drcog.org/dataset/denver-regional-aerial-photography-project-tiles-2022 4 Stormwater Infrastructure Analysis: Mapping the Future of Stormwater Solutions in Wheat Ridge, Colorado. Student Report, Department of Geography and Environmental Sciences, University of Colorado Denver, Spring 2025. City of Wheat Ridge / Stormwater Utility Feasibility Study 10 Table 13. Single Family Residential Parcel Counts and Representation in the Sample Parcel Count Percentage Distribution Sample Count Percentage Distribution Single Family 7,917 81% 324 81% Duplex: Two Family 955 10% 46 12% Triplex: Three Family 33 0% 2 <1% Townhomes 911 9% 28 7% 9,816 100% 400 100% Upon inspection, some selected parcels were found to be vacant and were replaced with other randomly selected parcels. The geographic distribution of the sample was evaluated against the distribution of SFR parcels across the City (Figure 2). Figure 2. Geographic Distribution of SFR Sample The final sample list of parcel identification numbers (PINs) is attached as Appendix A. 3.4.2. Impervious Area Measurement Within ArcGIS, a Raftelis analyst overlaid parcel polygons for selected SFR sample parcels on 2022 aerial imagery from DRAPP and created new spatial features to represent the impervious area on each parcel based on visual assessment of the parcel. Impervious surface was identified as any structure that prevents water from infiltrating into the soil, such as buildings, paved and gravel driveways, paved pathways, and parking lots. The impervious area polygons were created to match the footprint on the ground of these surfaces, rather than rooflines which may be obscured by the angle of the aerial photography. Figure 3 provides a selection of digitized SFR parcel types. The parcel boundaries are shown in blue, and the impervious area features created by Raftelis are translucent blue. City of Wheat Ridge / Stormwater Utility Feasibility Study 11 Figure 3. Examples of Measured Impervious Area on Sample Parcels (From left to right: Townhome - 1,084 sq ft; Triplex - 2,331 sq. ft.; Single Family - 3,688 sq ft.; Duplex - 3,695 sq. ft.) 3.4.3. ERU Determination Results 3.4.3.1. Calculated ERU Values Raftelis merged impervious area polygons developed for the sample set and intersected the results with the parcel layer, ensuring one feature (including multi-part features, where applicable) per parcel. The area in square feet of each impervious area feature was calculated and became the basis for the statistical analysis. Raftelis recommends using the median measured impervious area from the sample as the ERU. The median is more statistically robust, and less sensitive to outliers, the very small or very large impervious surface amounts in the sample, and therefore a more accurate representation of the “typical” impervious area for residential properties within the City. The calculated median measured impervious area for the full sample is 3,692 square feet (Figure 4) for all single family, duplex, triplex, and townhome properties. For the purpose of the ERU analysis, townhome common area was not included in the unit measurements. Townhomes are discussed in further detail below. City of Wheat Ridge / Stormwater Utility Feasibility Study 12 Figure 4. Impervious Area Distribution for SFR Sample (by parcel type) 3.4.3.2. Results by SFR Land Use Code In addition to reviewing the results for the entire sample, Raftelis reviewed the results by land use code to evaluate whether there are notable differences between the typical amount of IA in single family, duplex, triplex, and townhome parcels. Figure 5 shows the median amount of impervious area for each of the four SFR parcel types. Figure 5. Sample Minimum, Median, and Max Impervious Area for each SFR Parcel Type 0 20 40 60 Co u n t o f S a m p l e P a r c e l s Measure Impervious Area range (sq ft) Townhome Triplex Duplex Single Family Median = 3,692 sq ft Median, 3,808 Median, 3,792 Median, 2,415 Median, 1,084 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Single Family Duplex Triplex Townhome Im p e r v i o u s A r e a ( s q f t ) Min Median Max Median (all SFR) City of Wheat Ridge / Stormwater Utility Feasibility Study 13 As this graph demonstrates, the median amount of impervious area ranges from 1,084 sq ft for townhomes to 3,808 sq ft for single family. The median and maximum IA for triplex and townhome parcels falls below the median IA for the whole sample. There are a total of 911 townhome parcels and 33 triplex parcels in the City. Upon visual review in GIS, the townhome parcels look to be substantially different from single-family, duplex and triplex parcels because they often just include the building footprint and there is a separate NSFR parcel for the common area, driveways, and parking. Alternatively, while the two triplexes in the sample had lower IA than the single family and duplex parcel in the sample, visual review in GIS showed that the 33 triplex parcels had similar enough qualities to the single-family and duplex parcels to be included in the SFR class. 3.4.4. Recommended ERU Raftelis recommends the City to use the median amount of measured IA in the SFR with the townhome sample removed, which is 3,805 sq ft. For ease of communication, the ERU can be rounded to 3,800 square feet. 3.5. Units of Service Estimation Raftelis used a two-pronged approach to estimate units of service and impervious area. SFR parcels, substantially similar in their development as described above, were assumed to be charged a flat rate of 1 ERU each. Non-single family residential properties, which includes multi-family (greater than three units), industrial, commercial, non-profits, schools, etc. are typically charged a variable rate based on their actual impervious area. The same GIS parcel and aerial imagery data utilized to calculate the ERU were used to estimate impervious surface area on NSFR properties via a visual review. Units of service on SFR and NSFR properties were summed for total units of service. Although cities sometimes choose to exempt certain groups, such as municipal properties or school districts, each of these properties has an impact on the drainage system if they have impervious area and can be billed a stormwater fee under Colorado state law. In some cases, the administrative effort for a municipality to bill and pay itself is deemed too burdensome, so they exempt municipal properties from the fee. In other cases, billing all developed properties that have an impact on the drainage system strengthens the perceived fairness of the fee, and this is seen as a crucial element to the utility framework (more often like water and sewer). All properties (aside from public rights-of-way) have been included in the initial units of service estimation. 3.5.1. SFR Units of Service Many utilities use a more simplified rate structure for SFR parcels because the impervious area characteristics of the parcels in this customer class are more homogenous. Single family residential parcels are also numerous, so it is both efficient and equitable to adopt a single flat rate for this property class. Under a flat residential rate, single family customers are charged the same amount regardless of size and amount of impervious area on an individual property. Typically, under this structure each SFR property is charged for 1 ERU (3,800 sq. ft.). For purposes of this analysis, Raftelis utilized a flat rate SFR rate structure for single family, duplex, and triplex properties. Townhomes, having substantially less impervious area per unit, were assumed to represent 0.3 ERUs each, with common areas captured under the NSFR impervious area estimation described in Section 3.5.2. If the City wishes to further increase differentiation and equity in the SFR class, they could implement a tiered or capped approach, which could be explored further during the implementation phase. Under the tiered approach SFR properties could be placed one of three or more tiers where ERUs would be variable and tied City of Wheat Ridge / Stormwater Utility Feasibility Study 14 to the median of each tier. Under the capped approach, SFR properties with impervious area over a certain threshold would be treated like NSFR parcels and billed for actual impervious area, rather than being billed as SFR. As shown in Figure 4, there were some large single-family parcels in the SFR sample, including one parcel with approximately 30,000 square feet of IA and two with approximately 11,000 square feet of IA. 3.5.2. NSFR Impervious Area Estimation To complete the estimate of NSFR units of service, a grid containing 700 cells – with 435,600 square feet per grid cell – was overlaid on the City parcels. SFR parcels and roads were masked so that only NSFR parcels remained visible. All types of properties (commercial, industrial, school, non-profits, city) were included in the NSFR group in order to capture the total impact on the drainage system. Impervious area associated with streets and sidewalks are part of the stormwater conveyance system and are exempt from the stormwater fee, which is the approach for the majority of stormwater utilities. The percentage of impervious area visible within the grid cells was independently estimated by two analysts and the resultant values for each of the grid cells were compared. An additional estimate was performed for all grid cells where the estimate differed by more than a tolerable amount, in this case deemed to be 6%. Once all the estimations were complete, the percentage of NSFR impervious area was averaged for each of the grid cells and the total number ERUs of NSFR IA was calculated for each grid cell. ERUs for each grid cell were rounded up to the nearest whole number and summed to estimate the total number of NSFR ERUs of IA in the City. Figure 6 below shows City imagery and parcels with the grid overlay, and SFR parcels and streets masked. Figure 6. Example grid with SFR parcels and roads blacked out City of Wheat Ridge / Stormwater Utility Feasibility Study 15 3.5.3. Units of Service Estimation Results Using the visual estimation technique described above, NSFR impervious area in the City was estimated to be around 51 million square feet, which resulted in 13,653 ERUs of IA on the City’s NSFR parcels. Raftelis estimated units of service for the City based on the total number of estimated NSFR ERUs and the total number of SFR parcels. The units of service listed in the table below (Table 14) consider each SFR parcel to be 1 ERU, each townhome to be 0.3 ERU, and NSFR parcels to be 1 ERU per every 3,800 square feet of estimated impervious area. The townhome value is representative of this parcel set, though the ultimate billing policy may treat these properties in a slightly different way. Table 14. Estimated Units of Service based on Estimated ERU Value Customer Class Total Parcels Estimated ERUs SFR 8,905 8,905 Townhomes 911 273 NSFR 3,003 13,653 Total 12,819 22,831 The units of service estimation above can be used to calculate preliminary rates based on the stormwater program revenue requirements and other rate modifiers or policies (e.g., credits) and revenue considerations (e.g., collections, growth of units of service). Stormwater program O&M and capital costs options and estimated rates are outlined below. The required revenue was divided by the estimated units of service to estimate the rate per ERU needed to meet the program revenue requirement. Based on publicly available data, Wheat Ridge is not experiencing growth, so for the purpose of projecting out units of service and estimated rates over the planning period, it was assumed that there would be 0% growth of SFR and NSFR impervious area. Final fees should be based upon measured impervious area for NSFR properties developed during the implementation phase of the stormwater utility. City of Wheat Ridge / Stormwater Utility Feasibility Study 16 4. Funding Evaluation 4.1. Total Revenue Requirements and Preliminary Rates Raftelis developed an open-source Microsoft Excel-based financial model to calculate estimated rates under different funding scenarios based on stormwater program revenue requirements and estimated units of service. The financial model includes proposed O&M expenses, proposed capital renewal and replacement expenses, and additional capital projects. The model allows the user to change the percent allocation of existing costs, as well as capital project timing and funding approaches to see the impact on proposed rate. The financial model has been provided to the City under separate cover. To calculate preliminary rates for the City, Raftelis developed total revenue requirements, which include O&M expenditures, capital expenditures that are planned to be funded by the stormwater fee, debt service requirements for debt funded capital projects, and reserve allocations as shown in Table 15 and Table 16. The timeline for fee implementation may not support a full year of program costs in 2026, but revenue requirements and rates are both presented on an annual basis. More refined programming can be developed during the fee implementation process, when timing and methods for billing and collection are determined. Table 15. Revenue Requirement 2026 - 2030 2026 2027 2028 2029 2030 Operating Expenses Operations $ 372,000 $ 378,200 $ 384,700 $ 391,600 $ 398,800 Maintenance Programs $ 1,089,000 $ 1,089,000 $ 1,889,000 $ 1,889,000 $ 1,889,000 Total Operating Expenses $ 1,461,000 $ 1,467,200 $ 2,273,700 $ 2,280,600 $ 2,287,800 Non-Operating Expenses Debt Service $ - $ - $ - $ 133,000 $ 133,000 PAYGO $ - $ 1,803,000 $ - $ 1,560,000 $ - Total Non-Operating Expenses $ 120,100 $ 1,803,000 $ 319,500 $ 1,693,000 $ 133,000 Transfer to Operating Reserve $ 120,100 $ 121,100 $ 319,500 $ 1,700 $ 1,800 Total Revenue Requirements $ 1,581,100 $ 3,391,300 $ 2,593,200 $ 3,975,300 $ 2,422,600 Table 16. Revenue Requirement 2031 - 2035 2031 2032 2033 2034 2035 Operating Expenses Operations $ 406,300 $ 414,200 $ 422,500 $ 431,200 $ 440,400 Maintenance Programs $ 1,889,000 $ 1,889,000 $ 1,889,000 $ 1,689,000 $ 1,689,000 Total Operating Expenses $ 2,295,300 $ 2,303,200 $ 2,311,500 $ 2,120,200 $ 2,129,400 Non-Operating Expenses Debt Service $ 375,600 $ 780,900 $ 893,100 $ 1,338,900 $ 2,178,100 PAYGO $ 1,576,000 $ - $ - $ 2,550,000 $ - Total Non-Operating Expenses $ 1,951,600 $ 780,900 $ 893,100 $ 3,888,900 $ 2,178,100 Transfer to Operating Reserve $ 1,800 $ 2,000 $ 2,000 $ - $ - Total Revenue Requirements $ 4,248,700 $ 3,086,100 $ 3,206,600 $ 6,009,100 $ 4,307,500 City of Wheat Ridge / Stormwater Utility Feasibility Study 17 To determine preliminary rates, the revenue requirement for each year was divided by the estimated units of service for that year. These rates were then normalized to compensate for year-to-year changes in the revenue requirements and rounded for simplicity. The resulting rates per ERU are shown in the table below. While these rates support the current modeled scenario, Raftelis strongly recommends reviewing revenue sufficiency and necessary rate adjustments annually with respect to updated program projections. It is appropriate to review the rate structure, units of service, and cost of service more comprehensively approximately every five years to maintain the equity and appropriateness of the rate structure and individual properties’ fees. Table 17. Proposed Rates per ERU 2026 - 2035 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 ERU $10.00 $10.00 $11.00 $12.00 $12.00 $13.00 $14.00 $15.00 $15.00 $17.00 Projected cash flows (projected revenues, expenses, and fund balances (which include the reserve)) for the 10- year period are shown in Figure 7, Table 18, and Table 19 below. Figure 7. Projected Cash Flows 2026 - 2035 Table 18. Projected Cash Flows 2026 - 2030 2026 2027 2028 2029 2030 Revenues $ 2,739,000 $ 2,739,000 $ 3,013,000 $ 3,288,000 $ 3,288,000 Expenses ($ 1,461,000) ($ 3,270,200) ( $ 2,273,700) ($ 3,973,600) ( $ 2,420,800) Ending Fund Balance $ 1,278,000 $ 746,800 $ 1,486,100 $ 800,500 $ 1,667,700 Table 19. Projected Cash Flows 2031 - 2035 2031 2032 2033 2034 2035 Revenues $ 3,562,000 $ 3,836,000 $ 4,110,000 $ 4,110,000 $ 4,657,000 Expenses ($ 4,246,900) ($ 3,084,100) ($ 3,204,600) ($ 6,009,100) ($ 4,307,500) Ending Fund Balance $ 982,800 $ 1,734,700 $ 2,640,100 $ 741,000 $ 1,090,500 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Revenues Expenses Ending Fund Balance City of Wheat Ridge / Stormwater Utility Feasibility Study 18 Although revenues do not exceed expenses every year, the projected fund balance is sufficient to make up for any projected shortfalls in a given year. This means that the proposed rates are sufficient to cover the projected expenses in the 10-year study period and maintain the operating reserve levels. 4.2. Proposed Stormwater Rate Comparisons To provide a more comprehensive understanding of the proposed rates and to situate them within a broader regional context, Raftelis undertook a review of both the prevailing rate methodologies and the rates implemented by peer communities across the Front Range of Colorado. The survey of peer communities shows that, of 19 other communities surveyed, two have adopted a flat-rate billing methodology for NSFR properties, with the remaining communities included in benchmarking including impervious area as a factor in their NSFR rate structures. Assuming a monthly charge of $10 per ERU be implemented for NSFR properties in Wheat Ridge, this proposed rate would position the city's charges squarely in the middle of the range when compared against the current rates levied by the surveyed communities for a property with 3,800 square feet of IA and gross area of 6,000 sq. ft. Figure 8. Monthly NSFR Fee per 3,800 square feet for Peer Communities $39.60 $24.65 $21.66 $20.04 $20.00 $18.85 $18.20 $14.67 $14.25 $11.32 $11.00 $10.00 $10.00 $9.88 $9.19 $8.27 $7.82 $7.64 $6.46 $5.82 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 Boulder Denver Englewood Adams County Northglenn Longmont Greeley Golden Arvada Loveland Brighton Wheat Ridge Lyons Littleton Erie Parker Castle Rock Louisville Pueblo Windsor City of Wheat Ridge / Stormwater Utility Feasibility Study 19 For SFRs, twelve of the communities surveyed currently utilize a flat-rate billing approach. Three charge tiered rates based on impervious area. All other communities within the survey integrate impervious area as a foundational element in their rate calculations. In this specific category, a proposed monthly charge of $10 per ERU for SFR properties in Wheat Ridge would position its rates towards the higher end of the middle range, specifically within the upper-middle quartile, relative to the observed charges across the peer communities. Figure 9. Monthly SFR Fee for Peer Communities Each community establishes rates based on its own stormwater program needs, units of service, and growth expectations. The outlook of future rate increases varied among the utilities surveyed. Most did not specify upcoming rate adjustments. One community (Denver) provided a clear policy stating that rates would increase annually based on the percentage change of the Consumer Price Index for Urban Consumers (CPI- U). Two communities (Englewood and Arvada) note that customers should expect annual rate adjustments as costs rise for providing services but did not specify planned increases. Two other communities (Brighton and Boulder) note that rates are periodically reviewed and may be increased due to factors including rising costs related to operations, capital investment needs, and regulatory compliance. As discussed in section 4, above, regular revenue sufficiency reviews and rate adjustments are necessary for the ongoing financial health of a utility. $28.46 $26.53 $21.79 $21.66 $18.85 $12.82 $11.75 $11.32 $10.00 $10.00 $9.88 $8.97 $8.72 $8.70 $7.64 $7.50 $6.92 $5.50 $5.36 $2.00 $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 Boulder Greeley Denver Englewood Longmont Erie Golden Loveland Wheat Ridge Lyons Littleton Castle Rock Windsor Parker Louisville Arvada Adams County Brighton Pueblo Northglenn City of Wheat Ridge / Stormwater Utility Feasibility Study 20 4.3. Stormwater Credit Program Considerations Often, stormwater fees are accompanied by credit programs, which are designed to recognize and sometimes encourage investments in private stormwater management through reduced stormwater fees. Credits are granted to customers, typically, for having and maintaining stormwater facilities that mitigate a property’s demand upon the stormwater drainage system. Credit programs can create an additional administrative burden on the utility, however, especially if there are no existing data or processes to leverage for tracking private stormwater management activities. The City does not anticipate developing a credit program at utility implementation, but Raftelis does recommend revisiting the topic once the utility is established City of Wheat Ridge / Stormwater Utility Feasibility Study 21 5. Implementation Considerations To move forward with the implementation of the proposed stormwater utility, the City must finalize the stormwater program costs that will be funded through a stormwater utility fee. The City must also consider the data needs to appropriately calculate units of service, the billing method to convey the stormwater fee, the opportunity to implement a fee credit program, legal requirements, and public engagement strategies. 5.1. Implementation Data Needs To proceed with an impervious area-based rate structure for a stormwater utility, the City will need to develop measured impervious area data for NSFR parcels. The proposed rate structure is a per ERU rate for NSFR parcels and a flat-rate of 1 ERU for all SFR parcels. This rate structure equitably distributes costs to customers based on their burden on the stormwater system without requiring significant data development and maintenance that would be required for a variable or tiered SFR rate. If the City were to consider tiered residential rates to differentiate between smaller and larger residences, additional data development and analysis would be required to determine the appropriate tier breaks and classify customers into the correct tiers. 5.2. Billing Methods The method for billing customers can have a significant impact on the seamlessness of a fee implementation and its ongoing maintenance. Different billing methods result in variations in collection rate, staff support, and policy changes. Prior to implementation, the City will need to determine the billing method that will balance staff and administrative needs, customer collections, and ease of communications. The typical methods of billing are as a line item on an existing utility bill, a line item on (or separate bill with) a property tax bill or as a single item on a standalone bill. In the case of Wheat Ridge, the utility bill option, which is often a preferred method, is not a viable approach since Wheat Ridge does not provide other utility (water and wastewater) services. Instead, these services are provided by not one, but a number of different providers in the area. Thus, a tax or standalone bill line item are more viable options for conveying a new fee. These are described further below. 5.2.1. Tax Bill One method of billing stormwater fees is to add the stormwater bills as a line item on the tax bill, or simply in the same envelope as the existing tax bill. By including the stormwater fee with the tax bill, the City can take advantage of the established data maintenance structure, and bill print, mailing, and collection mechanism, including enforcement mechanisms to achieve a higher collection rate. One of the most pressing concerns with the tax billing option is the potential confusion from tax-exempt properties when receiving a bill to pay their stormwater fees since it would be the first time that these properties receive a bill from the Tax Assessor. The City would need to do focused outreach and education for tax-exempt customers. Lastly, receiving an annual bill would result in a higher lump sum burden that some customers may find harder to pay than monthly or quarterly bills. The City would need to develop a customer service program in coordination with Tax Assessor’s Office under this approach. City of Wheat Ridge / Stormwater Utility Feasibility Study 22 5.2.2. Stand-Alone Bill Another option would be to send stormwater fees as a standalone bill on a periodic basis. The basis could be a monthly, quarterly, semi-annual or annual basis – designed to align with the frequency of other bills or to otherwise balance billing costs and customer payment trends. The customer service and billing system needs associated with this billing method would likely be more costly than the tax bill option due to the necessity of incurring additional printing and postage costs, and a likely increase in the amount of staff time that will need to be devoted to customer support and collections for each bill that goes out. In addition, the collections enforcement methodology needs to be carefully considered and crafted within applicable laws and statutes. 5.3. Billing Finalization Depending upon the billing methodology chosen, the City will need to finalize several steps to convey the stormwater utility bill to customers: 1. Billing method – The City will need to determine if stormwater fees will be billed on the tax bill or through a stand-alone stormwater bill. 2. Billing policy outline – The City will need to make key decisions on billing policies for the new stormwater utility. These may include discussions on billing exemptions, aggregation of parcels for billing purposes, bill disputes, and other topics. 3. Billing data maintenance and customer service – The City will need to determine how data will be updated and maintained to support accurate billing after utility implementation. The City will also need to determine how they will conduct customer service, including appeals, adjustment, processing of credit applications and updates to the billing data as a result of these actions. The City should determine their internal capacity for handling these processes using business flows compared to the need for creating or acquiring a software tool to administer some of these processes. 5.4. Legal and Policy Considerations The City currently has the legal authority to implement a stormwater fee, and many Colorado municipalities have successfully implemented similar fees. The City will need to develop and pass a stormwater utility ordinance to establish the proposed stormwater utility and fees. The ordinance would include necessary details for the fee implementation, such as rate structure details, billing approach, payment enforcement mechanisms, bill dispute process, and stormwater credits. The City will need to consider its authority to enforce collections of the new fees. If the City does not have authority to lien properties for non-payment of stormwater fees, it can be expected that stormwater fee revenue collections would be lower than they would be with a strong collections mechanism in place. Under a tax bill conveyance scenario collections challenges would be most acute for tax-exempt properties, while under a standalone bill scenario, collections challenges are generally more prevalent for all customers. 5.5. Public Outreach and Engagement The public cast their votes in support of investing in infrastructure through the approval of the “Next Chapter” of the 2J bond initiative. Building off the success of the bond initiative, the City can communicate to the public that this Stormwater Utility can help fill the gap in additional infrastructure needs to improve stormwater management and address major funding issues. Public outreach and engagement will be imperative to make the connection between the public support for infrastructure investments through the 2J bond initiative and the remaining stormwater management and funding needs. City of Wheat Ridge / Stormwater Utility Feasibility Study 23 Raftelis recommends involving the public in the process for implementing a utility. Strong community support is a major part of a successful fee implementation. The first step to developing a public outreach and engagement strategy is to identify key stakeholders and target audiences. Key stakeholders and target audiences for the public outreach effort are often comprised of both internal stakeholders and external stakeholders. Internal stakeholders comprise City staff, City Boards and Commissions and City’s elected officials. External stakeholders comprise residents, businesses (particularly those with large amounts of impervious area), developers, community groups and organizations, educational institutions, and tax-exempt properties in the City. Residents could be targeted though homeowners’ associations and condominium associations. Large tax-exempt properties should also be included, once impervious area measurements are completed. During the implementation phase, the City will need to conduct outreach and engagement with the key stakeholders and target audiences described above to promote public understanding for the new stormwater utility. This plan would likely include in-person engagement events, such as open houses and listening sessions with community groups, as well as a communication plan that leverages both traditional and social media. These techniques may include but are not limited to: 1. Presentations to City Council and other City staff 2. Presentations and listening sessions at planned public engagement events conducted with key stakeholders and target audiences described above 3. Open house events for the general public 4. City website updates, including the development of FAQs 5. Social media engagement plan 6. Traditional media engagement plan 7. Short video explaining the drivers for the new fees The project team should create cohesive communication materials to support the goals of the communication and engagement plan and enable the successful delivery of the engagement techniques identified by this plan. These materials may include printed media (postcards or bill stuffers), social media posts, fact sheets, website copy including FAQs, infographics explaining stormwater billing concepts, short animated video, etc. Depending on the materials, the City may engage a partner organization or consultant to create them. In addition to providing education and soliciting feedback via in-person meetings and active engagement, the City could consider more passive communication tools that would be available to future customers at their convenience. These methods include updates to the City website detailing the utility implementation background and process. Another component could be communicating draft property-specific fees via a customer-facing online fee viewer. An example of this fee viewer tool is the one implemented by Boston Water and Sewer Commission (BWSC) during their stormwater charge implementation. It allows customers to view their parcel imagery, delineated impervious area, and resulting stormwater charges, as seen in Figure 9 below. Such online tools have proven to be an effective fee communication method with future customers as they provide property-specific information, reduce customers’ anxiety about the new fee, and reduce customer support needed in the lead-up and following utility implementation. Raftelis suggests that the City deploy an online fee viewer after the impervious area data development, rate structure and rates have been finalized to communicate accurate billing data to customers. City of Wheat Ridge / Stormwater Utility Feasibility Study 24 Figure 10. BWSC Stormwater Parcel Viewer Tool 5.6. Implementation and Outreach Schedule As mentioned above, the City should begin the implementation process as soon as they decide to move forward with implementation. Raftelis’ analysis described above assumed implementation of a Stormwater Utility beginning in 2026 or early 2027. This provides the City with a 9- to 15-month period to conduct public outreach and implementation steps. Necessary steps and the associated timing differ based on the billing approach. October 2025 This process should begin with a presentation of the findings of this report to City elected officials to solicit input on program, funding, rates, and implementation. Pending the outcome of that presentation, staff can refine and implementation plan and schedule, to include the elements described herein. November 2025 - February 2026 Technical - The focus through the next several months should be refinement of the impervious area data, rate structures, and financial model. Discussions with the tax office should begin, so that all necessary resources can be devoted to coordination and technical support if tax billing is an approach under consideration. Engagement - The City should develop a public outreach and engagement plan during this timeframe to engage the public and communicate important information about the new fee. This period could conclude with preliminary information provided on the City’s website, development of an “Frequently Asked Questions” document, and perhaps the creation of a short video explaining the drivers for the new fee. March - May 2026 Technical - The City should finalize impervious area data, rates, units of service, and other data needs identified by the tax office or billing entity, in preparation for billing, and to support more detailed customer City of Wheat Ridge / Stormwater Utility Feasibility Study 25 outreach. The City should develop customer service policies and procedures and begin to train customer service staff on stormwater-related billing. The City should finalize a decision on billing approach. If appropriate, ongoing coordination with the tax office at this stage should focus on identifying the information and data needed to convey the stormwater fee on the tax bill. Engagement - In this period, the City should conduct public outreach and education through open house events for the general public, and/or presentations and listening sessions at planned public engagement events with community groups, neighborhood associations and developers. Social media engagement and traditional media outreach efforts could also begin as outlined by the communications plan. Feedback gathered during this period should be discussed and incorporated into the next implementation steps as needed. Based on feedback, if additional workshops or engagement activities are needed, they can be scheduled during this period as well. A list of customers with the largest amounts of impervious area, tax-exempt properties and large stormwater only customers could be developed for targeted outreach. If desired, staff can engage Council on any critical decision points for finalization of the fee. June - August 2026 Technical - The City would present the Stormwater Utility and Fee Ordinance to the City Council in a public hearing setting. Once the Ordinance is approved, the utility fee will be effective. The City will need to finalize the bill file and do a test run of the bill file with the billing entity or tax office. If pursuing a stand-alone billing option, billing can begin in this period if the system and data are ready. Engagement – This period should include ongoing communication, and an increased focus on customer service. December 2026 - January 2027 If the tax bill is the selected billing mechanism, data are likely to be finalized at the end of the year for January billing. Please note that this timeline is an estimate, and should be refined in coordination with the County. Beyond Provide customer service and data maintenance. City of Wheat Ridge / Stormwater Utility Feasibility Study 26 APPENDIX A: Final SFR Sample List (Parcel Identification Numbers) City of Wheat Ridge / Stormwater Utility Feasibility Study 27 PIN 39-281-11-004 39-231-03-008 39-252-01-015 39-271-05-005 39-281-01-003 39-282-04-031 39-253-01-012 39-284-09-002 39-244-16-090 39-252-20-009 39-162-13-040 39-291-05-032 39-251-24-009 39-223-11-001 39-161-09-010 39-211-07-022 39-233-14-002 39-233-02-172 39-162-20-016 39-214-12-076 39-291-06-081 39-254-10-014 39-212-03-019 39-281-18-015 39-231-03-018 39-251-11-018 39-234-06-004 39-254-11-023 39-243-06-002 39-264-09-003 39-231-07-016 39-242-21-014 39-251-00-010 39-251-07-011 39-231-06-012 39-281-17-007 39-214-10-003 39-224-04-024 39-214-12-103 39-234-00-039 39-221-02-028 39-244-00-035 39-261-11-003 39-294-12-038 39-201-04-075 39-254-16-013 39-284-07-009 39-251-15-012 39-254-21-001 39-231-09-003 39-292-11-004 39-162-20-031 39-201-04-050 39-234-00-056 39-254-14-005 39-221-01-007 39-253-05-019 39-262-11-002 39-254-03-005 39-213-06-029 39-243-07-001 39-222-02-009 39-233-02-232 39-251-15-006 39-261-00-169 39-224-01-009 39-243-20-006 39-244-07-004 39-251-13-007 39-242-20-006 39-253-14-010 39-162-14-015 39-264-12-015 39-281-16-014 39-161-08-004 39-242-25-036 39-252-04-026 39-214-12-077 39-201-02-013 39-231-14-010 39-223-01-013 39-251-10-001 39-284-06-007 39-222-01-003 39-224-09-004 39-294-06-006 39-271-02-003 39-221-05-023 39-221-04-024 39-204-01-101 39-212-05-002 39-291-08-027 39-244-00-018 39-264-13-001 39-243-07-015 39-222-04-038 39-222-04-008 39-243-09-033 39-284-12-001 39-174-02-006 39-223-09-016 39-233-04-006 39-212-11-005 39-231-01-054 39-254-09-010 39-261-06-001 39-244-18-020 39-213-03-110 39-221-05-035 39-254-21-042 39-272-13-005 39-281-11-012 39-232-08-034 39-231-04-043 39-254-07-016 39-233-19-010 39-221-11-006 39-231-11-004 39-252-06-004 39-272-00-061 39-264-04-010 39-211-02-011 39-251-11-002 39-224-09-008 39-253-18-011 39-221-05-031 39-253-00-019 39-252-05-040 39-234-03-009 39-174-13-065 39-261-00-202 39-203-00-005 39-264-04-007 39-222-16-003 39-294-07-033 39-281-20-004 39-253-13-009 39-253-05-014 39-214-12-084 39-244-16-103 39-252-14-006 39-242-05-005 39-261-99-003 39-174-11-041 39-221-04-030 39-292-02-002 39-264-12-007 39-204-03-018 39-262-13-022 39-243-09-008 39-232-08-039 39-222-13-008 39-293-12-006 39-244-21-015 39-244-07-013 39-244-19-001 39-292-06-013 39-272-15-048 39-272-02-003 39-231-01-006 39-242-02-007 39-203-00-013 39-251-08-005 39-174-11-064 39-212-13-012 39-243-10-022 39-223-01-078 39-221-13-020 39-254-01-002 39-261-14-001 39-251-01-014 39-222-04-030 39-231-09-002 39-211-09-002 39-251-23-011 39-251-16-027 39-253-03-019 39-234-02-012 39-224-00-047 39-244-20-013 39-201-04-056 39-271-05-011 39-221-04-032 39-221-06-008 39-221-17-021 39-223-06-003 39-281-16-001 39-254-06-020 39-231-13-023 39-271-09-009 39-242-02-004 39-223-01-005 39-271-11-013 39-243-06-013 39-242-19-003 39-214-05-020 39-284-01-008 39-234-00-066 39-234-05-006 39-261-14-033 39-144-00-013 39-221-08-008 39-144-00-005 39-214-00-038 39-254-06-006 39-223-01-040 39-232-06-027 39-221-06-018 39-252-07-005 39-224-04-001 39-253-11-017 39-234-00-017 39-252-11-006 39-294-07-035 39-291-06-048 39-291-09-003 39-221-08-022 39-233-15-009 39-251-00-014 39-221-02-007 39-243-09-022 39-281-07-003 39-243-02-014 39-261-04-004 39-224-04-004 39-264-12-027 39-281-01-002 39-251-00-019 39-242-11-006 39-213-07-023 City of Wheat Ridge / Stormwater Utility Feasibility Study 2 39-231-02-010 39-251-03-020 39-251-03-015 39-222-02-026 39-243-08-003 39-162-20-011 39-291-02-006 39-242-20-011 39-224-08-010 39-254-00-012 39-221-03-010 39-282-09-043 39-281-04-013 39-254-12-003 39-251-08-003 39-252-16-018 39-222-04-033 39-264-01-069 39-224-00-061 39-271-07-033 39-222-14-005 39-253-06-008 39-233-16-027 39-284-07-004 39-212-06-007 39-252-01-031 39-284-19-005 39-253-11-003 39-224-00-056 39-251-15-005 39-221-02-027 39-242-18-006 39-212-00-056 39-262-00-047 39-281-17-001 39-272-00-021 39-231-07-038 39-244-00-004 39-232-08-037 39-254-20-011 39-232-05-026 39-251-15-001 39-242-19-014 39-242-17-002 39-291-06-078 39-282-01-037 39-254-24-026 39-272-11-004 39-281-01-006 39-271-02-024 39-253-04-009 39-271-07-013 39-281-01-004 39-254-30-002 39-253-07-007 39-253-11-041 39-261-13-008 39-174-13-074 39-211-04-005 39-174-11-059 39-262-03-024 39-281-04-019 39-243-08-025 39-252-00-021 39-253-03-017 39-261-00-178 39-253-00-039 39-281-18-001 39-214-05-024 39-221-08-012 39-221-06-010 39-214-12-003 39-162-14-023 39-214-12-088 39-254-03-019 39-221-04-018 39-161-07-003 39-231-13-001 39-261-99-005 39-234-07-004 39-211-09-016 39-231-09-008 39-254-21-033 39-291-06-090 39-242-10-001 39-264-03-013 39-242-19-016 39-272-01-001 39-233-02-181 39-272-00-045 39-223-01-084 39-254-11-007 39-213-05-003 39-221-19-002 39-243-08-001 39-221-18-001 39-252-05-009 39-233-11-001 39-272-00-019 39-243-11-022 39-282-02-004 39-251-14-032 39-294-07-039 39-243-12-030 39-211-08-007 39-271-05-013 39-231-05-018 39-284-06-006 39-254-12-023 39-243-11-007 39-281-15-018 39-221-04-015 39-254-09-014 39-251-02-017 39-224-00-036 39-251-21-007 39-253-11-011 39-214-07-013 39-292-06-001 39-272-00-011 39-244-16-042 39-231-07-035 39-261-10-003 39-223-01-096 39-204-01-054 39-254-06-019 39-233-14-003 39-282-06-010 39-214-12-047 39-261-06-006 39-203-00-028 39-291-10-020 39-213-06-049 39-251-07-021 39-244-09-011 39-233-02-135 39-161-08-002 39-231-05-046 39-252-13-005 39-272-04-016 39-293-02-005 39-261-00-073 39-253-09-003 39-242-05-002 39-233-10-006 39-223-01-016 39-261-06-004 39-272-15-043 39-243-14-014 39-232-07-014 39-281-11-017 39-291-06-156 39-291-07-005 39-234-00-038 39-233-07-031 39-294-07-020 39-262-12-005 39-243-00-014 39-264-11-013 39-284-11-005 39-211-09-019 39-253-01-009 39-221-99-003 39-261-13-007 39-292-01-005 39-254-07-007 39-201-02-020 39-243-02-015 39-204-01-042 39-214-00-019