Northwest Lakewood Sanitation District provides sewer services to approximately 4,000 homes and 500 commercial buildings spread over six square miles in Lakewood, Wheat Ridge, and unincorporated Jefferson County. The District maintains over 65 miles of sewer pipeline and 1,400 manholes. The District contracts with the Metro Wastewater Reclamation District to process over two million gallons of sanitary sewage (wastewater) each day prior to discharge to the South Platte River.
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SUMMARY OF 2013 ACTIVITIES AND EXPLANATION OF 2014 FACILITIES RENOVATION AND SERVICE FEE INCREASE
The District has been very busy in 2013 and wanted to take this opportunity to share some of their activities with all of you.
The District continued its annual facilities rehabilitation program in 2013. Several small point repairs and full linings of sewer pipe were completed. The amount spent on this project in 2013 was roughly $264,000.
In addition to the annual rehabilitation program, the District also held an election in November 2013 which was coordinated by Jefferson County. The election question (Ballot Question 5A) asked voters to allow the District to retain and spend all of its revenues generated from its voter approved mill levy rather than refunding a portion of them back to its customers as mandated by the Taxpayer Bill of Rights (TABOR).
The Official election results related to Ballot Question 5A are as follows:
No Votes = 3,043 or 62.33%
Total votes = 4,882
Ballot Question 5A failed and therefore a temporary mill levy reduction was included in the total mill levy of 7.285 mills that was certified to Jefferson County for collection in 2014.
After the election results were received, the Board spent time in November and December to finalize their 2014 budget. The annual rehabilitation program will continue in 2014 and funds in the amount of $400,000 have been committed to this program as well at $900,000 to finalize Phase 3 of the Kipling Street rehabilitation project. The District will also see an increase in charges paid to Metro Wastewater Reclamation District to treat our sewage from the amount paid in 2013 of $1,093,100 to $1,241,923 in 2014 or a 13.6% increase.
Given the 2014 budget and in reviewing the 10 year projections which includes rehabilitation and operation and maintenance needs, the Board voted to increase the Facilities Renovation and Service Fee (FRSF) from $175 per single- family residential equivalent per year to $200 per single-family residential equivalent per year effective January 1, 2014.
Fee increases of this nature are never popular, but given the increases in treatment charges, the annual rehabilitation program and the results of the November 2013 election, the Board made a decision to increase the fee. The financial projections indicate an even larger increase in the Fee is necessary to adequately fund future rehabilitation of the 60 year old system as well as operation and maintenance expenses. However the Board understands the economic climate and has agreed on a modest $25 fee increase for 2014.
Should you have any questions regarding the information contained in this letter, please feel free to contact a member of the Board of Directors or the District Manager at 303-987-0835.
DISTRICT FINANCIAL STATUS UPDATE
For the first 55 years of its existence, the District relied upon its property tax mill levy to cover all operating and maintenance costs. Annual tax revenues were sufficient to meet these on-going expenses. With the exception of occasional minor adjustments, dictated by the Taxpayers Bill of Rights (TABOR Amendment), the mill levy has remained unchanged.
FACILITIES RENOVATION FUNDING
Various studies show that the District's facilities are approaching the end of their useful life and require gradual replacement or renovation. The District's monetary reserves are not adequate to fund this major, multi-year project. In response to this situation, in the spring of 2009 the District implemented the Facilities Renovation and Service Fee, or FRSF, in the amount of $150 per single family-equivalent connection. Prior to imposition of the FRSF, the Board convened a citizen advisory committee to evaluate the situation. The committee reviewed engineering studies, solicited public input and ultimately supported the need to raise additional revenue on an on-going basis. The Board annually reviews the adequacy of funds collected through the FRSF.
INCREASING COSTS OF WASTEWATER TREATMENT
The District contracts with the Metro Wastewater Reclamation District (Metro) for the treatment of nearly two million gallons of wastewater each day. The District and nearly 60 other special district and municipal "connectors" take advantage of the favorable economics of large-scale, centralized wastewater treatment offered by Metro.
Metro's costs for wastewater treatment are increasing due to more stringent water quality regulations, the need for facilities construction and renovations and rising costs for equipment, supplies and personnel. Over the next 10 years, Metro faces an unprecedented increase in capital improvement spending needs, projected to total $1.3 billion. This is a 350% increase over the previous 10 years. The majority of these improvements are driven by federal and state water quality standards. Northwest Lakewood Sanitation District is obligated to pay its proportional share of these costs, as determined by the volume and organic strength of its wastewater.