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ASPEN000028



TABLE OF CONTENTS

Preface Chapter

I. IntroductionOverview MajOr Findings Recommendations . . . . . . . . . . . . . . . . . . 7

II. Existing Water System and ServicesHistoric Perspectives . - - . - . . . . . . . . 10

Existing Facilities and Water RightsCritical Capital Needs of the Existing System . . . 15

Comprehensive Water Management Plan . . . . . . . . . 17

Policy StatementPotential Water Service Areas . . . . . . . . . . . 21
. Physical Facilities RequiredTreatment facilities
Treated water storage
Raw Water storage
Transmission and distribution
Raw water and irrigation ditches
Hydroelectric power generation
Land treatment
Water RightsGeneral principles
Action requirements -
Water Quality . . . . . . . . . . . . . . .-. . . 35

IV. Analysis or the Proposed Water Rate Structure . . . . 36'

Management Accounting . . . .Overview of Water Rate Making Philosophy
and Rate DevelopmentRevenue requirements
Cost allocations
The proposed rate structure?
Utility service connect charge
?Treated water rates
debt service charge
operational and maintenance charge
ecsefficient (capacity) charge
Miscellaneous Water Rates

v. GlossaryVI. Sources Consulted . . . . . . . . . . . . . . . . . . 73

ASPEN000029

 . 
.. - mu . .. Allis}. .- . #D'Jju?ar'u u. -

iv

LIST OF TABLES

 

1. 'Current and Future EQR Values and Calculated
Connect Charges . . . . . . . .

2. Current Density and Estimated Buildout . .
3. City of Aspen Water Fund Balance Sheet . .
4. Plant Investment Fee and Tap Service . . .

5. Historical Water Usage . . . . . . . .

6. Five(5) Year Water System Improvement and
Expansion I- I I I I 

Ten (10) Year Water System Improvement and
Expansion . . . . . . . . . . . . . . .

8. Facility Expansion Projects . . . . . . . 

9. Ten (10) Project Contraction, Planning, and
Design Schedule . . . . . . . . . . . .

10.' Sample Test EQR Calculation Data . . . . .

Exhibit A Map of Water Service.Areas . . . . . .

wean-.11.. . 3.. ?saved -, amatt 3

PAGE
- PREFACE

Traverse the desert, and then ya can tell

What treasures exist in the cold deep well,

Sink in despair on the red parch'd earth,

And then ye may reckon what water is worth.

Miss Eliza Cook
The abundance of water flowing as an inexpensive resource-

leads us to take its availability for granted while exercise
ing our concerns in other areas. John D. Musick, Jr. of
Musich, Williamson, Schwartz, Leavenworth and Cope, P.C., a 
water attorney with a broad repotation of expertise in water
law has made it his primary responsibility to bring the aware-
ness of local government officials to an action-stance to
protect and enhance their local water resources. Acknowledge?
ment is given to his committment toward this goal, and for the
extensive time spent by he and members of his staff, espe-
cially James S. Lochhead who has been responsible for the
accumulation and coordinatiOn of technical information
compiled for the Comprehensive Water Management Plan of the
City of Aspen. City staff members who have earned recognition
through their efforts are Ronald W. Stock, City Attorney;
James J. Markalunas, Director of the Water Utility; David
Ellis, former City Engineer; Karen Smith Stanford, City?County

Planning Director; Lois Butterbaugh, Director of Finance. vi.

 

Tom Dunlop, City Environmental Health Officer. 'Special

consultants for the project are Rea?Cassens and Associates,

 

and Wright Water EngineersMM.-. .wm- L, - - 7.. {-773 ?ma?a!

numaruvi?? m.

ASPEN000032

Hymf'l

7 . .

CHAPTER I
INTRODUCTION

'Aspen, Colorado, is a small community noted for its ski?
ing slopes and summer tranquility. with an altitude of nearly
8,000 feet above sea level, the mountains that enclose the
City on three sides act as a natural Storage reservoir for the

Community's domestic water supply. Snowfalls during the win?

.ter months average depths of 166 inches on the peaks rising

to 14,500 feet in altitude; the snow then melts and drains
above and below the surface of the Roaring Fork Valley on its
journey toward the Colorado River, California, and the sea.

State and national economic conditions have put stringent
demands an Colorado?s western slope water. Local domestic
needs, transmountain diversions supplying Eastern Colorado's
urban growth and agricultural needs, interstate water agree?
ments, and more recently the Federal Government's urgent
proclamations to deVelop fuels abundantly located on
the Western Slope, have combined to force a reassessment of
the value of the local water resources which over the years
have been taken for granted as being ever plentiful and

unthreatened.

ASPEN000033

0V ERV I EN

The City of Aspen has operated a municipal water utility --
since 1956. Although improvements and expansion have been 
implemented, the overall system has suffered frOm an inability
to readily fund a capital program which will assure its reli~
ability and integrity of services to the community. The Com?
-prehensive Water Management Program developed by the City's
staff and its special consultants during three years of study
and coordination, outlines facilities which they recommend
should be established to assure the present levels of service
and to meet the demands of immediate and future potential
suburban growth and expansion.' It further establishes an
innovative method of allocating costs of its operations and
capital construction to its customers. The Plan extends to
all facets of Aspen?s water management concerns-~water
quality, quantity, development, treatment, storage, transmis?
sion, distribution and collection. In a broader context, it
addresses urban storm runoff control, open space irrigation,
and waste water treatment and disposal.

The Plan is being presented to the City Council, Aspen's
policymaking body, for approval. The diverse nature of the
policy statements supported by the descriptive applications,

the detailed develoPment plans and the extensive rate sched?

ules result in a volume of complexed documentation which over-
whelms, resulting in a conceptual information overload that i

necessarily must be refined and narrowed to facilitate a grasp

.

ASPEN000034


.- 4hr7r. .a?Ms. gs Enig?l?- - - mistaking-Jo. 

of the major ideas, thereby permitting evaluation and compari-
son to alternative programs which are competing for immediate
implementation and the use of local resources.

This report is presented with two purposes in mind.
First, the major areas of the Plan have been summarized and
supported briefly in paragraph form to enable the reader to
quickly identify each general policy or action which is being
requested, and to assess the impacts of any discretionary
decisions. Second, the structure of an indepth analysis of

the viability of the proposed innovative cost allocation

- systems are discussed and compared With'the present funding

methods and with those of other public utilities operating in
Colorado and nationally. A test application of the water
billing impacts will be undertaken if the City Council con?
cludes that the proposed Comprehensive Water Management Plan
is desirable. A supplemental apprOpriation request accom?
panies the submission of the Plan to permit the development of
a billing model with which to test and refine the variable'
features of the propoSed water rates; and to aid in collecting

data necessary to implement the proposed billing system.

ASPEN000035

MAJOR FINDINGS

The major findings which have resulted from this research
report may be summarized as follows:

1. The municipal water utility system presently serves
all customers within its incorporated City limits and extends
service to certain customers beyond the City limits. Urban
growth presents a constant demand for expansion of the present
service areas. -

2. The Castle Creek Treatment Plant can treat eight
million gallons of water per day, and with one million gallons
required as backwash water, seven million gallons of water
treated daily are available for customer use, exclusive of 
stored treated water.?

3. Seven million gallons per day of treated water are
gcapable of serving eight thousand people at the peak summer
day demand of 250 gallons per person per day. With treated
water storage, the Utility has been able to treat sufficient
_water to serve six thousand permanent residents and ten thou?

sand tourists1

per day.

The currently planned development of employee hous?
ing, free market units,-and-the development beyond the current
service areas will require nee water facilities to be devel-
oped in the immediate time frame to serve these additional 

customers. - i

 

1 Briscoe-Maphis, Inc., "Water Systems Report, Aspen, 
Colorado", 6 March l974, p.3.

ASPEN000036

. . -5133}. . . . Hap .. .34-Lu?? ?wmi-w. . . .. 


5. The plant investment fee structure implemented in

1974 to provide funds for capital renovation and construction
have declined in volume each year and presently result in less
that $200,000 annually. This is adequate to meet the present
bonded debt service but. will not be sufficient to fund the
cost of future renovation and expansion.

6. The overall potential water service area has been
divided into seven subdivisions. Each area has been assessed
as to the current facility needs, expansion facilities needed
to serve the growth management plan buildout, and variations
in the cost of delivering water service to each area. 

7. The proposed connect fee-and rate structure are
sufficiently related to the time tested ratewmaking concepts
used by utility companies and recommended by the American
Water Works Association. The acknowledgement that the system
must build facilities to meet "potential comsumption?, rather
than planning for actual consumption, causes a reassessment of
who should pay for the excess capacity required by the system.

8. The Equivalent Residential Unit (EQR) method of
assessing connect fees and water rates considers "potential
demand" by charging the new water connections to the system on
a potential consumption basis for a prorata amount of the cost
of the new facilities which must be added to meet the growth
management quotas of expansion in the identified service area.
The rate charges are based on a combination of-
calculations assessed on water usage, service fees, debt

service fees and an EQR co-efficient charge which, on a

ASPEN000037

'potential demand basisitwill provide funds for capital
replacements and improvements within the area. IBecause the I 
costs are identified to service areas, different co?efficient
rates may be assessed in established service areas where the.

connect fee would be low but heavy renovation of the system

may be needed.

.
. .r Hermann "Kama?" --

 

 

ASPEN000038

RECOMMENDATIONS

This indepth study of the water utility system has given
a new appreciation for a City service which has been provided
daywin and daymout without interruptions, its reliability
most attributable to the careful planning and consistent
attention of James J. Markalunas, the department director, and
our consultants, John D. Musick, Jr., Musick and Richard H.
Cassens. Their pleas for immediate attention to a system
which is rapidly being outgrown have been largely ignored.
The Comprehensive Water Management Plan has given the Staff an
opportunity to assess the system needs by area and by annual,
fiscal impact. Generally, my personal conclusions are aligned
With those of the Staff and are as follows:

1. Certain needs of the system are immediate and should
not be delayed until the full Comprehensive Water Management
Plan has been studied and adepted or rejected by the City

Council. These needs, identified herein as Critical Capital

 

Needs of the Existing System will require further engineering,

 

legal work and staff time to begin implementation, and unless
begun immediately, another building season will be lost. The
funding (debt service requirements for a period until the new
rate structure could be implemented) should be supplied by an
increase in the current water rates effected as soon as legal?
ly possible. . 
2. Because there is currently a demand by area citizens

for expansion of the water service areas and because competing

private water systems within this area w0uld be detrimental to

.. . . H. .

ASPEN000039

Ithe benefit which he received. It has a great deal of flexi?

0 4 . . ray?admin .. 

0'8
the City's water utility system. sericus consideration must be
given to the full Comprehensive Water Management Plan. 
Certain portions o? the plan are more concerned with future
developments within our urban structure but should be a part
of today's planning.

3. I recommend that the EQR approach to connect fees and
water rates be adopted. It gives the City a tool with which

to achieve the desired goal of identifying the costs of_the

service to the user at a rate which can be proportionate to

bility both within specific areas and as related to the system

as a whole. It could assess the cost_of water delivery en?a

 

more equitable basis than the current rate structure does,

while providing a reliable source of revenue to maintain the

existing capital plant investment. I recommend that current
funds_be appropriated at the beginning of the decision process
to permit development of the management accounting and billing
systems which must be tested and the variables adjusted over a
period of several months prior to final implementation of the
Plan and the effective date of the new rate structure. I

estimate that a full year will be required to implement the 

:billing system, although the connect fee structure could be i

implemented within a few months after adoption., The cost of
the immediate system development could be paid from the above
.recommended water rate increase.

4. In anticipation of the new billing system which would

lose credibility for accounts which are not metered, and to 



9

enforce compliance Qith the current City code which requires
2m; all water connections to be metered by April 30, 1980, I

recowmend that the current ordinance of the City be amended to

permit the staff to obtain bids from private contractors for

installation of meters where the owners have not complied,

with the cost of the meter and the installation billed to the

property owner by the City Finance Department} Any defaults

in payment should become a lien on the property115: - - .--.I - ?3231:?; 



 

1,3,2 -. 

a-r.

. a limes 'a-avmmgavz?t-?l-?e T: wa?s - "rs-r m- lat-"p 

a consultant to prepare a report

CHAPTER II
EXISTING WATER SYSTEMS AND SERVICES

HISTORIC PERSPECTIVE

. A 1956 report1

submitted by the City's consulting
engineer recommended the immediate acquisition of the City's
water supplier, the Aspen City Water Company (a private cor-
poration), and construction of a new treatment facility and
distribution system. The purchase was transacted on July 1,
1959, with the payment of $205,005.? In 1974 the City retained
2 of the City's operation of

that system and its and weaknesses. 'The major

deficiencies pointed out were-in treated water storage (a need

"for four million gallons per day capacity instead of the

existing two million) and in the distribution system (a

single transmission line existed from the treatment plant to

Ithe distribution system, and there was an insufticient'fire

protection flow). At that time the Plant Investment Fee
system was recommended and implemented to pay for capital
improvements through 1978 when the peak population was
projected to be 26,000 persons. 'Estimated 1973 pinter flows

were 6.76 million gallons per day with an estimated peak

 

1 Dale Rea, "Water Supply for the City of Aspen",

_l956..

2 BriscoeHMaphis, Inc., ?Water SyStem Report: Aspen,

Colorado", March 1974.

10 

'2'1?L'u?xnvr .569? .. 

- ?Vite "her?" 



 actuarial? .u 14 ?Dom gar-a318,: 

ll
requirement for winter flows in 1985 of 11.52 million gallons
per day. The actual population in 1973 resulted in six
thousand permanent residents and ten thousand temporary

overnight guests during the peak skiing days. The 1979

 

highest actual daily ?low was 5.86 million gallons with a
current system capacity of eight million per day.1
The City currently has approximately thirty?two hours of
reserve treated storage capacity during the Winter months, .
with only eighteen hours of reserve in the summer months. a
This improvement was accomplished through construction of the 
two million gallon reservoir on Red Mountain in 1978 and will 
be further improved in June, 1980, when the newly constructed

Aspen Mountain one million gallon reservoir is put into ser?

vice.

 

 

1 See Table Aspen Water Production and Consumption
at p.

 

. i "Ff-1i" 37?.?f?dus?tu i

A 

 . . - - - A. A- amt.- i 1' rum" --

12

EXISTING FACILITIES AND WATER RIGHTS

The City of Aspen Water Utility Department operates from
the Castle Creek Treatment Plant building located on seventeen
acres of mountain side one mile south of the City limits.
The location and elevation are such that it receives raw water
and delivers treated water to the distribution system by
gravity. The gepartment has been directed by James J.
Harkalunas fOr seven years with the assistance of six field
workers, five plant technicians and two office workers. The
Finance Department of the City does the utility billing and

the job orders for service connect/disconnects. The annual

water service billing in 1979 totaled $792,879, with $196,504

?plant investment fees being collected. -Its annual-operation

budget in 1979 was $719,578 with capital expenditures of
$212,588. 

The supply and collection facilities of the Water Utility
include three diversion dams--Castle Creek concrete dam built
in 1965, the Maroon Creek dam built in 1892! and the dam on
Hunter Creek, a wooden structure rebnilt in 1976.

Transmission conduits exist as two miles of thirty inch

concrete pipe from the Castle Creek dam to the Castle Creek

. Treatment Plant installed in 1965; sixteen thousand feet of

thirty to thirty-nine inch concrete pipe and two hundred feet
of thirty~six inch corrigated pipe installed in 1974 from the
Maroon Creek dam to the Castle Creek Treatment Plant; and

twelve and fourteen inch steel pipe installed in 1950 and up-

- . ska-we" - - . -



(thou-em? Jw -..

13 I ?j
graded in l976 from the Hunter Creek dam to the Hunter Creek

-Treatment Plant.

. ?I'Tf?n

The Maroon and Castle Creek reservoir IOCated at the 5
Castle Creek Treatment Plant provides five million gallOns of
raw water storage.. The Hunter Creek Treatment Plant has no
Storage other than a one thousand gallon steel reservoir used
as a settling tank.

lhe Castle Creek Treatment Plant includes pretreatment
facilities consisting of two and one?half million gallon EIMCO
flocculatoreclarifiers. The Plant treats the water through
eight one million gallon (eight million gallons per day) rapid

sand filters with eight inch coal caps (dual media) which were

 

installed in 1972. Treatment equipment includes chemical 
feeders for coagulation and flocculation, pre and post clori?.
nation, and flouridation. The slant is equipped with labora?
'tory facilities for analysis of the chemical and bacterial 
properties of the water. The attached 750 foot office area
was built in 1974.

The Plant has a complete monitoring system sensing the
pumping activities and tank levels at all treated storage
sites. Additional monitoring is achieved through thirty-eight
alarm lines feeding into the City Hall Police Station to pro-
vide for twenty?four hour observance. This permits minimal
Plant staffing during nights and weekends.

The Hunter Creek Treatment Plant is a ?site package

plant? with a rated capacity of one-half million gallons per



14

n.

day. It is used for treatment on a stand?by basis, but is

.also used full-time as a pumping station serving lower Red

Mountain. The plant is fully automated, with start and stop
switches both on site and at the Castle Creek Treatment Plant.
Gravity storage for treated water is provided in the two
million gallon "clear?well" reservoir located at the Castle
Creek plant site, the two million gallon buried tank on the
Ridge of Red Mountain and the new one million gallon buried
tank which will be in use by June 1980. Treated pump storage
sites include the one?half million gallon tank on Little Nell
and seven twenty thousand gallon storage tanks_located in each

of the following areas: Lower Red Mountain, Upper Red

:Mountain, Ridge of Red Mountain, Aspen Grove,-Mountain Valley

and Upper Aspen Grove. The City does not have pump storage

in the Meadowood area. The system includes nine pumping

I plants located in the above areas housing pumps.

A network of approximately sixty-six miles of distribue
tion pipelines circle the present service areas. These are

pipelines ranging from four inches to twenty?four inches in

diameter, with 727 online valves exclusive of'hydrant valves,

and 263 fire hydrants. The service_system includes 1735
billing connections which are billed in combination
with the City?s electric billing.

The City owns water rights of various seniorities and from
several water sources. The major domestic water supply is
from rights to one hundred cubic feet per second from Castle

Creek and sixty-eight feet per second from Maroon Creek.

.qmm-vn.ha13' ?Lu. Jr" . A . 41:24;





4 . . . -..- 

15 .
CRITICAL CAPITAL NEEDS OF THE EXISTING SYSTEM

Certain service areas have minimal reserve storage capa? 
city because of the location of the storage facilities or the
lack of pumping stations relative to the location of treated-
water storage reservoirs. These upper elevated residential
Filing, Aspen Grove, Eastwood,
Knollwood and Mountain Valley, are critical areas where rapid
growth has outstripped the ability of the system to deliver
and maintain an adequate water supply. In the event of an

electrical power failure, these areas would be out of water
within two hours. The Water Utility Director has recommended
that a moratorium on further construction be declared in these

areas.1 New connections to the entire system have exper?

 

Iienced a declining ratio, forty?four units in 1979, fifty- 
eight units in 1978,-and sixty?seven units in 1977, indicating 
Ithe impact of the City's Growth Management Plan which has 

attempted to control growth within the City. In spite of the
decline, this area has grown beyond the present service capa?
. bility and the staff recommends immediate acquisition of a'
tank site and construction of a one million gallon buried
storage reservoir located in the Knollwood SubdivisiOn. The
estimated cost is $400,000. Expediency iS'recommended due to
extreme need and the availability of an appropriate tank site

which may not remain available for purchase.

 

1 James J. Markalunas, 1979 Annual Report, "City of
Aspen Water Department, January, 1980.



 10
The storage facility for the Meadowood Subdivision is
reconmended to be a one?half million gallon reservoir, serving
the Highlands, Meadowood, and the Golf Course areas. Its cost
would be approximately $150,000.

- Reconstruction of the Maroon Creek Dam is essential to
the water supply at the Castle Creek Treatment Plant. Re?
placemEnt of the dam would cost approximately $400,000 and
would require a "404 Permit" from the Army Corps of Engineers,
and a possible quiet title action. The existing dam is in
danger of washout, and the City may face the possibility of a
ruling of partial abandonment of its Castle Creek water rights
if substantial improvement is not made to the structure in the

near future.



 .A.-- - v. - .. .. . .4.. 

CHAPTER . .,
COMPREHENSIVE WATER MANAGEMENT PLAN

In November, 1976, the City Staff and consultants under
contract began work on the Comprehensive Water Management Plan
with goals to accomplish the following:
(1). Coordinate the use of all of the City?s water
rights;
(2) Develop a consistent.overall water policy for the 
City:
water quality and quantity standards for the
present and future service areas;
policies to define expansion and to eliminate
competition; .
acquisition of water rights in conjunction with
subdivision and annexation, and through direct
purchases and negotiations; 
(3) Develop and control a capital improvements plan for I
the water system for the next five years. i
The work plans of the group included preparation of the 1
'service area maps to document existing facilities, water 
runoff data, and peaking demands for domestic and raw water
uses as well as the specific formulation of the water 5

management plan. - u.

17 . .I 



18
The Comprehensive Water Management Plan has resulted in

an expansion of the original goals, with many added policies
?7 . {being formulated and an On?going plan being developed which is
not limited in years and attempts to be visionary as related

qto ladd development within the potential water service area.

7? 
.



1,1. In. 3?

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a; - 3.71. . g. 

4.1; .- assaL.19

POLICY STATEMENT

The comprehensive approach to water management recognizes
that consideration of urban water runoff control, open space
irrigation and waste water treatment and disposal are as much
_a part of the social and economic community resonsibilities as
are treated water delivery and firefighting water flows.
Foremost, the planning process is stressed. The City must
control the use and delivery of water in the preposed service
areas to assure achievement of its broader goals of maximum
utilization_of City-owned water, orderly and efficient
development of the suburban water service areas, preservation
of water quality and quantity, continuance of ties between the
rural and urban communities relating to maintenance and
development of open space, recreation areas, pollution?free
energy sources and implementation of City and County land use
and growth policies. To achieve this control it is recom?
mended that the City enact the following policies:

(1) Development of maximum utilization of City-owned
water rights;

(2) Enactment of ordinances to protect water quality;

(3) Resistance to development o? competing private water
systems within the proposed service areas;

(4). Prohibition of use of wells for domestic uses if
found injurious to the health of the City or its
residents;

(5) Requirement of subdividers and developers to provide
additional water rights necessary to serve the

developmental areas;

ASPEN000051

.

 

 . . . .1, J.

20?
(6) Acquisition of crucial water rights through purchase

or negotiations;

(7) Resistance of events which could result in
designation as a public utility;

(8) Cooperate with Pitkin County to achieve the goals of
their land use plans and of the Comprehensive Water

Management Plan.

ASPEN000052

2l

WATER SERVICE AREAS

. It is the intent that the City of Aspen will be capable 
of meeting all present and future water needs of its incorpor?
ated area, the water service areas adjacent to the City which
are presently being served and other areas which logically
meet criteria consistent with sound utility and land use plan~
ning supported jointly by the City and Pitkin County. This
Willingness to expand the service area of the water utility is
intended to discourage development of competitive water eye?
tems and to create increased reliability of supply for all
customers of the system._

Designation of areas of potential service will promote
basinmwide planning. The City of Aspen is located at or near
the confluences of the Roaring Fork River and Difficult Creek,
Hunter Creek, Castle Creek and Maroon Creek. As such, water
resources of the City affect, are dependent upon, and are
affected by activities transcending the geographic boundaries
of the City. It is recommended that the City negotiate with
Pitkin County to assure water service expansion which is con?
sistent with the economic realities of the system and the
growth management policies of both entities. It is recom?
mended that water rights acquired by Pitkin County in conjunCv
tion with land being considered for the expansion of water
service be dedicated to or acquired by the City. Water ser;
vice in the County areas would be subject to regulations
enacted by City ordinances and the water facilities w0uld be

owned by the water system.

ASPEN000053

22
Existing and potential service areas are outlined on the

map identified as Exhibit A. The potential expansion areas
lie largely contiguous to the existing municipal limits,
within the annexation pathways. Estimates of density and
connect charge requirements are stated in terms of Equivalent
Residential Units (EQR's) on Table 1. These areas are
identified as: 

l. Central Aspen Area

2. smuggler Mountain Area

3.v Red Mountain Area

4. Red Butte Area

5. Highlands Area}

6. .Buttermilk Area

7. Brush Creek Area
The rationale behind these service area divisions is to segre-
gate areas having divergent capital construction needs and
differing water delivery costs to permit allOcation of costs

to those customers who directly benefit from the expenditure.

Property owners and water users in established service areas
who have paid for the existing facilities over many years
should not be expected to pay for construction of new lines

and added treatment and storage facilities and fOr the

 

increased pumping and transmission costs to areas where they
have no ownership. The new owners requesting the develOpmeht
who stand to benefit through water usage and increased pro"
perty values should pay for these costs through utility ser-
vice connect charges and operating cost allocations identified

_directly to their utility delivery functions(33.61:. 9'75?. . M?x? . .. yawn:- ?mm T..- 5' i

ASPEN000054

23

PHYSICAL FACILITIES 

This study has attempted to identify new physical 
facilities that would be required to service the estimated
build-out in the potential service areas. The policy
Statement2 stresses

"the intent and policy of the City of Aspen that

the City does not hold itself out as able or willing

to serve all potential customers within or without

its then?existing service area, and that extension

of service by the City outside its incorporated

limits shall be made in the City's proprietary capa?

city on an individual contractural basis 
While the staf? and engineers have assigned projected dates to
the expansion events, as detailed on Table 9 the specific

timetable must be developed in view of actual develOpmental

patterns as they become known to the City planners.

Treatment Facilities

The necessity to construct satellite water treatment
plants to maximize the water diversions, and to decrease the
City's reliance on any given stream is a basic tenet of this
water planning effort. Transfer of existing water supply,
transmission, treatment and storage facilities owned private
water suppliers or water districts shall be mandatory at the
time of extension of treated water service to a new area;

however, the City will furnish raw water for a fee to the area

 

1 Table 9, located at Page66 identifies the
estimated project costs and allocates them to the estimated
year o? implementation. The charts form. the basis for 
computations of the utility service connect charge which will 
provide funding for the above described projects.

2 John D. Mdsick, Jr., "Comprehensive Water Management 5 
Plan of the City of Aspen", p. 7.

.

ASPEN000055

24
for treatment in their system if the system has been deter"

mined to be deficient, until that system can be brought to the 
municipal standards and will qualify for transfer to the
City's ownership and control.

In 1978 the Hunter Creek treatment plant was constructed.
This 400-gallon per minute (.5 million gallons per day)
gravity filter plant has the expansion capability to eight
hundred gallons per minute when required by the system,
however, the City must purchase additional senior water rights
to provide raw water for late summer and early fall water
flow. Benefits from the Hunter Creek plant are a water supply
with a low mineral content, increased service capability to
Red Mountain and Smuggler Mountain areas, and for improved
firefighting capacities. -

Construction of the Roaring Fork Treatment Plant would
enable the City to use its better water rights. The facility
would be designed to treat four million gallons per day and
would utilize the proposed Knollwood Storage reservoir for
distribution into the system east and nerth of the City. It
would also support expansion of water services to the northern
and western proposed service areas as these demands were made
on the system.

_The existing Castle Creek Water Treatment facility can be
expanded to create an added treatment capacity of four million
gallons per day. The facility utilizes raw water drawn from
Maroon Creek, Midland Flume and Castle Creek. The extra

capacity is needed for planned development within the present

?ma-W r? "Issues? 

ASPEN000056

25

service areas and in those adjacent thereto. An on?going
renovation of the existing plant will allow it to operate
efficiently without interruptions; however, the expan-
sion must be completed prior to the renovation of the existing
filter beds to accommodate the high rate filter media.

An alternative satellite treatment plant designed for
servicing growth areas west of the Airport to Brush Creek
would utilize new Maroon Creek or Roaring Fork River water
rights. A pump plant, pipeline, storage tank-and distribution
lines would be required to implement this plant. A more
economical solution may be the expansion of the Castle Creek 1
Treatment Plant or the construction of a new Maroon Creek
treatment Plant which would be located on Buttermilk. If
either of these alternatives were selected, a new Maroon Creek
Diversion Dam and a raw water line, plus a 2?milli0h gallon
treated water storage reservoir located at Tiehack would have
'to be provided. -

It is recommended that the City's compliance with the
Clean Water Act, be effected through the City's
acquisition of the Aspen Sanitation District waste water
treatment plant off of Mill Street when it is retired from
service by the District after 1980. The plant should be used-
for treatment of the urban runoff as contemplated in the Urban

1.

Runoff Management Plan. The City's operation will prevent

 

 

Wright?McLaughlin Engineers, "Urban Runoff Manage-
ment Plan", August, 1973.

ASPEN000057

 

26

the development of another statutory district and will give
the City control over valuable municipal irrigation and storm

water rights.

Treated Water Storage

Even with the addition of the one million gallon
reservoir on Aspen Mountain, the system is still deficient in
treated water storage. The Knollwood one million gallon
buried storage reservoir is recommended in this study as a
critical immediate need which should be begun before the Com?
prehensive Water Management Plan studies are completed. In
addition to the fire protection and household needs of the .
customers in the immediate service area, the project would
ihelp to meet the water demands of Red Mountain and Smuggler
Mountain and would permit conversion of existing areas in
Pitkin Green presently on a private system.

The one million gallon Tiehack storage reservoir would be
located on the Pfister Subdivision (proposed) and would pro?
vide more adequate service for the Airport Business Center and
the McBride SubdiVision. The Meadowood storage site would be
.5 million gallons to service Highlands, Meadowood and the
Golf Course residential areas. This tank is also recommended

for immediate implementation.

Raw Water Storage
The City's raw water storage needs are discussed under

the Water Rights; Action Required section of this_paper.

ASPEN000058

 I n1~\ a ?vm?V?F

. 27
Transmission and Distribution

The Maroon Creek dam is eighty?four years old, requiring
extensive repairs annually. In its deteriorated condition, it
is unable to divert more than 20 percent of the capacity of
the Maroon Creek pipeline, and would be unable to supply ade?
quate raw water to the Castle Creek Treatment Plant in the
event the Castle Creek pipeline was out of service for a short
period of time. Also, the dam would be the diversion point
for raw water needed to complete the proposed agreements with
Highlands Ski Corp. and the Highlands Water Sanitation Dis?
trict. The dam_is suitable for a hydroelectric plant site.
This project is recommended for immediate implementation, with
consideration of the hydroelectric plant at a later date. -

Transmission mains in need of upgrade include the South
Side line with a twenty inch line to Wagner Park, a sixteen
inch line to Spring Street, and a fourteen inch line to Knoll?
wood Subdivision. It is needed to provide a dual route to
move water to the eastern suburban areas and to balance other
service areas. Various other transmission lines in the exist-

ing service areas need upgrading and/0r replacement.

Raw Water and Irrigation Ditches

The City has retained and is rejuvenating and redevelop?
ing the network of raw water irrigation ditches nhich have
been used by its citizens for lawn and park land irrigationf

since the late 1800'5. 'Then and now the existence of the raw

- ?er-urtv - 4- - 

ASPEN000059

28
waterways enhances the ambiance of the town and allows conser?
vation of the treated water supply during the dry summer
months.

Raw water ditches bringing the water to the central City
area from the Roaring Fork River include the Wheeler and East
Aspen City ditches and the Nellie Bird Ditch, each having been
decreed ten cubic feet per second, six cubic feet per second
and 3.94 cubic feet per second respectively, for irrigation,
stock watering and domestic uses. The diversion structure in
the Roaring Fork River is in need of redevelopment and a pore
tion of the Nellie Bird rights are available to the City by
purchase negotiation. I

The Marolt and Holden Ditches were decreed in 18.6 cubic'
feet per second and thirty feet per second respectiVely from
Castle Creek for irrigation purposes. These ditches supply
water to the Golf Course and the Cemetery. The City maintains
the ditches while not holding title to all of the water rights
and should negotiate acquisition of the balance of the water
therein to discourage acquisition.by competitive systems.

The City owns 2.5 cubic feet per second of the water
rights in the Si Johnson Ditch which diverts water along the
east bank of Castle Creek to the western end of the City in?
cluding the Aspen Institute property. -Acquisition of the
Institute's water rights should be negotiated at such time as
additional development is permitted on the property.

The Nestell-Pierson and the Maroon Ditch draw water from



29

Maroon Creek. The Maroon Ditch is now the Maroon Creek pipe?
line. Legal services are needed to secure clear title to the 
Nestell?Pierson water rights.

.The Durant Ditch receives water flows from Aspen Mountain
sources near the Durant Mine. Additional water rights exist?
ing in the same area should be acquired to enhance flows to
Glory Hole Park, the Aspen Mall, Ute Park and %he;Cemetary and
for snowmaking on Aspen Mountain.

Water Wells NumberSijo and Three located on Mill and.
Spring Street respectively, are decreed a total of 4.46 cubic
feet per second. The Number Four-well near Little Nell is de-
creed .65 cubic feet per second absolute and 2.64 cubic feet
per second conditional. The water is used for irrigation,
street washing, construction work, and other municipal uses.
Upgrade of the wells_and pumps could effect beneficial in"
creased irrigation capacity for the City. The enthony Well in?
Alpine Acres was acquired by the City through annexation and
could be leased to the Homeowners Association to provide a low

cost revenue to the City.

.Hydroelectric Power Generation

The investigation of the feasibility of hydroelectric
power generation in conjunction with development of the
Maroon, Castle, Hunter Creek Reservoirs and the Snowmass Pro?

'ject has been ongoingtl

 

Merrick and Company, ?Feasibility Study??Hydro~
electric Generation, Aspen, Colorado", April, 1974.



30

Alan Ingram, project engineer for Merrick and Company
concluded that a one thousand kilowatt generation facility
located on Castle Creek utilizing surplus capacity of the
City's domestic water source could generate an annual
equivalent of $43,962 (1974 dollars).in wholesale power costs,
approximately one-sixth of the amount of power purchased by
'the City's Electric Utility in that year. The annual
operating cost of the facility would be $32,842. However,
conflicts with Public Service Company could cause
underutilization of the generated power which would have to be
delivered to circuits independent from the existing system.
The rising costs of.electric power and the possibility of spot
shortages have revived interest in this low pollution energy I
- source. The Staff recommends continued monitoring of
developments and available grants toward economic development

of the energy source., A 1978 federal loan program under Title

IV providing 90 percent funding is now being investigated.

Land Treatment

Land treatment has been proven to be a safe and
productive method of sewage disposal through use of secondary
effluent as natural fertilizer. This method maximizes the use
of water resources, increases crOp yields?and reduces the need
for artificial petroleum-based fertilizers. Exploratory
negotiations to trade the secondary effluent for raw water

should be pursued.



 . 

31
WATER RIGHTS

General Principles

There are two distinct types of water law in the United
States, one called "riparian" and the second the "appro~
priation" system. Under riparian law, the interests in water
generally belong to the property owners adjacent to and under
the lakes and streams. In arid and semi?arid areas such as
exist in Colorado, the appropriation system permits diversion
of any unappropriated water from any natural stream for any
_?bene?icial use". The Colorado Constitutionl recognizes

prior rights, but states that if water is not sufficient for

3

all usersr domestic purposes will have preference, and agri?
cultural purposes will have preference over water needs for
manufacturing. An adjudicated water right permits water
diversion for a beneficial use even if it causes the stream to
dry up and priority.is given to users based on the date of
the initial appropriation and the type of use. Conditional
rights are granted by the courts for large scale projects re-
quiring years for planning and construction, to assure that
the water interests will be available when the project is com?
.pleted to permit diversion for the beneficial use. Changes in
conditional or adjudicated water rights must be as a result of
a water court decree. Most water law is based on case law
(rather than statutory law). Water rights may be determined

to be abandoned if the water is not used on a regular basis.

 

1 Colorado Constitution, Article VIX, Sec. 5.

ASPEN000063

32

In 1973 the State Legislature1

recognized that maintenance

of minimum stream flows is a beneficial use and it authorized .
the Water Conservation Board to apply for new rights or

changes in existing rights to provide for minimum flows

"required to preserve the natural environment to a reasonable

2

degree". This authorization is yet to be tested through

the courts.

Action Requirements
It is stated policy of the Comprehensive Water Mangement

Plan "to acquire all privately held water rights located
nithin the City area of potential service which are_of unique
value to the City".3. The City's-water-attorney recomends
that an immediate study be undertaken to identify all senior'
water rights to the creeks adjacent to the City of Aspen and
the Roaring Fork River to identify those which should be
sought through purchase or by dedication when treated water is
extended to the expansion areas near the City.

I The City made application in December, 1976, for water

storage rights for the sixteen ponds located on the Municipal
Golf Course. 'The City should apply for the immediate adjudi?

cation of these storage rights as well as seeking out any

unadjudicated direct flow and storage_water rights which may

 

1 1973, Sec. 


2' Ibid.

3 John D. Musick, Jr.; "Comprehensive Water Management
Plan for the City of Aspen, Colorado", November, 1979, p. 2.

l3:? 5' vi.

"3:13:w?T? - - .- - .
Jain. Lu. "9 ?f 4" 



33

?exist within the City's service area with the intent to pro?
ceed with adjudication and appropriation for the benefit and
use of the City of Aspen.

The application.for quadrennial finding of reasonable
diligence is due in February, 1981, for the City's conditional
water rights for the Castle Creek Reservoir and the Maroon
Creek Reservoir. The City must insure that these conditional
water rights are maintained until such time as they are made
absolute; A similar filing will be made for the City's Well
No. 4 by its due date in June, 1980.

Appeal suits have been filed with the Colorado Supreme
Court to reverse lower court decisions which declared four
conditional water rights encompassing the Snowmass Project, a
hydroelectric and pumped storage project on Snowmass Creek and
the Roaring Fork River, to be abandoned for lack of due
diligence by the Colorado River Water Conservation District.?
These rights had been assigned to Pitkin County and the City
of Aspen prior to the abandonment ruling.

To improve the City's year~round supply of water for the
Hunter Creek Treatment Plant and to provide for minimum Hunter
Creek stream flows, the City must begin negotiations with the
United States Forest Service to obtain water storage rights
and a reservoir site. Water court proceedings will be
necessary to finalize any agreements negotiated; The City
must also seek water rights adjudication to assure year~round
raw water supply for operation of the planned Roaring Fork

Treatment Plant.

.u'muz-w-m-v - - - r1 ?Trashy-?rm 

ASPEN000065

 . .. .m-exuomw- . .

34

Water court action may be necessary to complete the
City's negotiations with the Aspen Ski Corporation to provide
raw or treated water for snowmaking or in conjunction with
water rights to be dedicated to the City. Such proceedings
could effect transfer of the conditionally decreed water right
of Well No. 4 on the Aspen Ditch Water right to an alternate
point of diversion.

Raw water supply contracts to be entered into may require
transfers or changes in water rights to permit implementation
which will require Water Court proceedings.

The City and Highlands Ski Corporation seek to enter into
a contract whereby Highlands will transfer water rights which
they own in the former Maroon Creek Flume and Pipeline to the-
City in exchange for raw water from the City's Maroon Creek
Pipeline with a carriage right contract offered to the High~
lands and any other user who cares to purchase raw water in
that location. The City_seeks to recover partial construction
costs of the pipeline thrOugh the transaction. The City is
also negotiating with the Aspen Water and Sanitation District

for a raw and treated water contract.

ASPEN000066

35
WATER QUALITY

The City and Pitkin County have made specific recommenda?
tions to the Water Quality Control Commission of Colorado, 
citing the stream segment and its desired quality class. The
City should further prohibit the discharge of any pollutant
into streams within its area. Urban runoff and agricultural

runoff are significant sources of pollution.1

The Compree
hensive Water Management Plan proposes acquisition of the
Aspen Sanitation District waste water treatment plant for

treatment of storm runoff within the City boundaries.

 

I Wright~McLaughlin Engineers, "Water Quality Manage-
ment Plan: Roaring Fork River Basin", May, 1974; "Urban Runoff
Management Plan: City of Aspen", August, 1973.

Hum-m? ?new ?huurnnv'u-w-r-HMI mar. 4 - rerl'? 



- .. . -
earCHAPTER IV
OF THE pnoeossn WATER 

MANAGEMENT ACCOUNTING 

The traditional water utility accounting?system is con?
cerned with measurement of utility income and costs for specie
fied time periods. The job is done when the numbers are
- arranged according to the preferred practice and reported to?
the managers. Effective planning and control of this Compre?
hensive Water Management Plan demands much more from an
accounting system?"accounting and statistical information to
be provided through implementation of a management accounting
system which is being designed with adequate sophistication to
yield general and specific cost data and reyenue projections
for control and planning purposes.

The central idea of the management accounting system1
seeks to provide managers with sufficient information in a
timely manner, focusing on the tuture. No more time and money
.should be spent to gather the information than is expected to
be gained as a management tool. Thus, accuracy is often less

important than timeliness; estimates may be adequate for many

purposes; key employees must be trained and retained to make

 

1 American Water Works Association and-Municipal
Finance Officers Association, Water Utility Accounting, (Ann
Arbor, Michigan, 1970), p. 80.

 

36

ASPEN000068

'37
these judgments. Integration of all the local government?s
information systems should be considered. It is inconsistent 
to continue to encourage accountants, planners, department
heads, and engineers to maintain overlapping separate
information systems which sometimes yield conflicting data
because of divergent assumptions and individual errors. The
study of the Comprehensive Water Management Plan has attempted
to determine what data will be needed, by whom, in what form
.and when for use in the water utility management.

The timing coincides with the City's necessity to replace
the old utility billing system which became obsolete several?
years ago and with a demand from the Staff and the Community
for an Aspen Property Index Data Base which will accumulate in
one place all basic data pertinent to each identifiable real
property interest located within the City?s potential water
service area. This basic data file will be accessible to
Planning, Engineering, Building inspection and all other City
and County departments, and will be Cross?indexed to the
County Assessor?s preperty files. Reports from the file will
be available to community professionals and organizations for
use in their own pursuits. Design of the system is a joint
effort by the departments being coordinated by the Director of
Finance and Snowmass Systems Inc. Completion of the total
project will require additional budget for the technical pro-
gram design and implementation and will require significant
commitments of Staff time. However, the initial information

required by the water billing system makes up a large portion

ASPEN000069

38

of the information required for the basic data file and little
added cost is required to design a file to accommodate both

uses as the Water billing system implementation occurs.

?$1123: if?? 67* *1 



- . . . . Via-514.49.; .5 .s

'.39


nu.

OVERVIEW OF WATER RATE MAKING
PHILOSOPHY AND RATE DEVELOPMENT

Principles for development of waterwrate structure are
based on historically differing considerations of local condi?
tions, laws, public or private ownership, regulatory control
and differences in individual viewPoints to meet local prefer?
ences and requirements. In Colorado there are three different
types of utility organizations with differing forms of regu?

lation.l The investor owned utility is regulated by the

 

Public Utilities Commission, whose task it is to monitor costs
and control the rate of return to the investors who otherwise
would be in a position to maximize profits at the detriment of

the customer in a monopoly enterprise; A cooperative owner?

 

ship of the utility identifies its customers and owners as one
and the same, thereby resulting in internal controls to main?

tain low prices and low profits. Municipally?owned utilities

 

which serve customers outside of their municipal limits are
subject to PUC supervision when electricity is being sold but
are not yet subject to this regulation when selling water. It
is the on going policy of all state-wide municipalities and
their associations to collectively and individually resist

moves toward this regulatory requirement, yet it annually is

 

1 Larry Simmons, "Toward a Restructuring of Electric
Rates", October 1974.



?40
'the subject of one or more bills introduced before the State
Legislature.1

Selection between the different principles must be made
to achieve the unique result desired by the policymakin? body
of the operating utility. No matter how scientific the rate
analysis may be, the "correctness" of rates and profits
becomes a matter for individual judgment based upon one's own
values. However, a final.judgment needs a framework of theory
and practicality. This chapter attempts to provide that 
framework.

The written policy of the American Water Works 
Association, adopted on January 25, 1965, stated that the
interests of the public and the individual can be served
best by self-sustained, utility?type enterprises, adequately
financed, and with rates t6 the public and customers based on
sound engineering and economic principles The
development of water rates ordinarily involves the following
major areas of study:3 7

1. Annual revenues to be generated to provide for the

operations, maintenance and developmental costs of

the water system.

 

i This is the annual position stated by the Colorado'
Municipal League policy board at their policy setting meeting
held each year in January.

2 AWWA, Water Rates-?Manual of Water Supply Practices,
(Ann Arbor, Michigan, 1972), p.v.

 

3 _Ibid.



41
2. Cost of distribution and of the basic cost functions

allocated between the customer classes.

Design of the water rates which will recover from
each customer class the respective costs of delivers
ing service.

With the primary goal to establish a rate system which
will assess the system costs to the user commensurate with the
service rendered, consideration must be given to potential as
well as actual water consumption. A customer with a poten?
tially high peaking rate of usage as compared to the average
rate of usage puts a heavier demand on the systems-larger cap"
acity of pumps, pipes and other treatment and delivery facil?
ities; Quantity usage discounts based on the marginal cost
concept are in direct conflict with the potential demand
theory. It is reasonable and proper, however, to recognize
that the different classes of customers have characteristics
and measurable demand requirements on the system facilities.
It is also practical to give recognition to customer class
diversity in measuring costs to serve different classes of

have established that

customers. National statistics
small users as a group characteristically have a high demand
factor (the ratio of maximum use during one hour to the

average use during 24 hours) which may require capacities of
500 percent of the average usage. Conversely. large users as

a group have a lower consistent demand pattern, resulting in-

peaking at less than _150 percent of the average usage.

 

1 Ibid.



42
Revenue Requirements
Two bases for determination of reyenue requirements have
been used widely, and each has its particular field of applica~
tion. These are identified as the "public utility? basis and

the "cash needed" basis.

Public Utility Basis

Utility systems under state commission control (all private
systems and publicly owned systems in seven states) must use the
public utility basis for rate making. Its chief distinction
requires a determination of the value of the assets (the rate
base) upon which the utility is entitled to earn a return. The
?National Council for Governmental Accountingl strong recom?
mends that municipally owned.utilities use the same method. Under
this approach, revenues must be sufficient to cover operations and
maintenance expense, depreciation, taxes if applicable and must
allow a return to the utility on the rate base. To reduce the
Ifreduency of rate changes and to assure adequate revenue, rate-
schedules should be predicated on a rate base and operating expenses
that are forecast for the middle of a reasonably long period of
time (such as 5 to 10 years) during which the rates are expected
to be in effect. The rate of return to a corporate utility must
be fixed sufficiently high to insure investor income adequate to
attract the capital necessary to maintain and expand the facilities

as required by customer demand.

 

Utility Water Aocountinq, (Ann Arbor, Mich., Edward
Bros. Inc, 1970), p.p. Bl. . 



 $4.34.IILLA-U - . .mH-n-q 

43
Cash Needed Basis
A rate study in accordance with the cash needed approach

would consider the cost of Operations and maintenance expense,


35p service requirements, replacements, nermal extensions and

{a . i" .
I 'E?-Jdimprovements. Other cash outlays such as appropriations for
u: as ;f%ture debt service for bonds issued for major improvements
contributions to other municipal funds must be considered.
'Eg??e fund contributions are considered to be payments in lieu
:1Ti df taxes which would have been paid to the municipality if a

corporate utility was providing the services. Depreciation is
in, not treated as a cost factor, however the amount allowed for 
Current renewals and replacements should be equal_to or_greater
than that amount. Normal improvements and extensions to be

financed by contributions in the form of plant investment fees

are not included in the rate calculations.

Cost Allocations

To determine the water rates to be assessed so as to
'generate the required revenues, consideration must be given to
the relative cost of rendering services to differing classes of?

customers. There are two primary methods used for this allocation.

The Functional Cost Method

All costs including capital costs are classified as produc?
tion costs, distribution costs, public fire protection costs and
costs of other special users. The rates are made up of several
component charges:

1. A basic service charge or minimum charge to cover

billing and metering costs which are best allocated



44

on the number of accounts weighted by the size of the
water tap.
2. Production and distribution costs are distributed by
a metered usage volume at a cost rate varying by the
class of customer.
3. Fire Protection Costs are based on the relative
assessed value of the property or some other
allocation method.
The classification of customers by relative cost to serve is
determined by use of a limited sample of all_of the customer
accounts located in a specific four to six square block area which
should include some of each of the different classes of customers. 
Extra?base Capacity Method
Under this methodr costs are classified as customer costs;
capacity (or demand) costs, and consumption (cr commodity)
costs. The customer costs include expenses resulting from the
utility billing and servicing of meters. and any other costs which
'typically increase preportionately with the number of accounts
in the system. Commodity costs are defined as the cost that varies
with the amount of water sold,?including pumping and treatment
costs for average load capacities. The capacity charge includes
operating costs for delivery of excess of average loads plus a
charge for a portion of depreciation, taxes and rate of return
(if the public.utility revenue method is used), or to cover a
portion of debt service, replacements, normal extensions and
improvements} and payments in lieu of taxes (if the cash needed

revenue method is used). One difficulty in using this method is



 '51) Eva-:5

45

the determination of what costs pertain to the average load and
what costs are incurred for extra load delivery. 
The rates derived by either of these methods will result in
comparable charges, however, the extra-base capacity method dir?
ectly identifies the minimum unit cest of service, after recovery
of customer costs, applicable only if a perfect load factor could
be achieved. This represents the lowest potential charge to be
permitted to prevent setting the price of water service at less
than the production cost. A customer exercising a constant 4
demand 100 per cent of the time does not contribute to the diversity
of water use loads and should not be required to pay for the excess
capacity costs of the system. 'The extra capacity cost is charged
to those customers whose water usage demands the larger capacity
of the system.
The Proposed Rate Structure
The City's electric system purchases power from Public Ser~
vice Company and sells it to its customers in the City of Aspen.
Its cost of purchased power is based on three component parts,
one of which is a demand charge which_is levied at the month's
highest cumulative usage peak; a charge for having the peak load
capacity available to be_called upon whenever needed. The water
System processes raw water to obtain a product to sell. The cost .
of the raw water is reflected in the purchase offwater rights,
construction of diversion damns, transmission lines and treat-
ment plants, and the cost of manpower and supplies used in the

treatment process. The treated water must then be stored in

l'

as; Harriette T. we r?v'f yes-m ?v -



46

sufficient quantities for immediate aVailability to customers
whose usage could peak during certain hours of the day at as much
as 1000 per-cent of the system's average load over the 24 hour day.
As the water service area is expanded, the impact of this pattern
is intensified. Demands for higher capacity from the system
exceed the system's financial capacity to expand. The City must
take action of two kinds.? First,'efforts must be made to reduce
the peak time consumption. _The Water Department Director has a
well planned marketing program of public media announcements to
remind the citizens to conserve water. ?The City Council has?
passed Ordinance 21 (Series of 1975)-1 requiring complete conver~
sion to metered water connects by april, 1980. As it is evident
that compliance with this ordinance has not been fully implemented,
it is the recommendation of the Staff that the Council approve the
"provisions in the Comprehensive Water Management Plan which permit
for the City to install or to contract to have installed meters
for any customers who have not yet done so,,hilling them in
either a lump sum or in payments with interest for the costs-
individually. Full metering cannot.guarantee a reduction of the
customer usage, but it will aid the City in controlling the loss
of water through currently unknown causes and will provide the
customer an effective incentive to control his usage. It will
also provide improved management information.

The second action to be taken to reduce the impacts of high

demand consummates in the Comprehensive Water Management Plan.

 

lMunicipal Code of the City of Aspen, Sec. 23?104, April
1975.



47

Utility Service Connection Charge

Through the advanced planning and identification of I 
expansion construction costs, many of the future costs which
compound the present peaking problem and relate to delivery of
water to the potential expanded service areas can be met through
a Utility Service Connect Charge hreplacing the current Plant
Investment Fee). This charge would be computed on the basis of
"Equivalent Residential Units" and would be required to be paid_
by each applicant for water service within the expansion areas.
Each water service area will haVe a different level of utility
connection charge (Table i designed to cover the additional.
cost of new facilities necessary to service the growth projected
by the Aspen/Pitkin County Growth Management Plans for that ser?
vice area. These charges will apply to all customers coming into
the system after adoption of the Comprehensive Water Management.
Plan. An equivalent residential unit (EQR) is defined as "the
volume of water consumed by a single family residential unit housing
a statistically average family of 3.4 persons?.1 One EQR is
equivalent to a two bedroomreeidence with one full bath, one
kitchen, one clothes washer and 2500 square feet of sprinklerr
irrigated lawn or garden. Larger structures and commercial uses
are assigned EQR points (Table 2 based on square footage .
These EQR points shall be used for the utility connect charge as

well as in calculation of the utility service billing.

 

1John D. Musick, Jr.. ?Comprehensive Water Management Plan
of the City of Aspen, Colorado", p. of the proposed Utility
Connect Ordinance 



a

48

Application must be made in writing by the property owner
or his agent for a new service connect or for any additional
water requirements resulting from additions or renovations of
structures on the property. The permit to connect will be
issued in conjunction with the building permit. The total
connect fee shall be the utility connect charge times the
number of EQR points assigned to the structure.

To assure that the full amount of the service area planned
facility coSt can-be met when finally constructed, the applicant
will also be charged an inflation adjustment on his utility,

connect fee based upon the Consumer Price Index1

calculated and
assessed until the facilities financing is obtained. In
some cases, service of water to the undeveloped area can be con-
nected to the existing distribution lines for a relatively short
period of time if excess capacity is available and the growth
patterns of the expansion area do not-warrant immediate.construc?
tion_of the projected new facilities, thus the applicant should
be charged an inflation adiustment until the new facility is
constructed. I

All utility connect charges will be restricted for expen?
diture to facility construction and debt service within the ser?
vice area designated. If the service location is outside of the
Aspen City limits, a surcharge of 5 per cent will be added to the

utility connect charge, to be placed in a City/County trust account.

 

- 1U. S. Department of Labor, Bureau of Labor Statistics,
"Censumer Price Index?, published 

- -.- . . .. 31-1 .- 'c?u??lemj??fw" v-wilrc??rm '5





49
for use to promote the policies of an intergovernmental contract

between the City and Pitkin County for development of basin-wide
water management and cooperatioa in applying the Growth Manage"
ment Plans of each of the entities. Employee housing develop-
ments located in the County will be exempted from the 5 per cent
surcharge. The oversizing of water taps which provide for fire
protection systems are exempt from all EQR points on the excess
capacity to encourage this type of installation.
To fully implement the Comprehensive Water Management Plan,
a new water rate schedule is proposed. It establishes rates for
treated water, raw water and carriage rates. The_goals of this
new_rate schedule are toil
l. Maximize the use of City?owned water resources;
2. Reduce unnecessary demands for treated water:
3. Encourage utilization of raw water for uses not
requiring treated water; I
4. Preserve open space and parklands through use of raw
water irrigation;:
5. Promote the water rights dedication ordinance:
6. Provide a rate which clearly reflects the actual costs

incurred in delivering water to the custOmers.

Treated Water Rates
The base amount of the water bill will be made up

of several separately calculated charges:

 

1John D. Musick, Jr., "Comprehensive Water Management Plan
of the City of Aspen, Colorado", p. 46



50

1. A debt service charge;

2. Service area direct operational and maintenance cost
charge (optional);

3. Pump station charges (optional):

4. System wide charges for the remaining operatiOnal and
maintenance costs not directly allocable to individual
water service areas;

5. Inflation utility connect charge adjustment (if
applicable); I

6. A capacity charge to provide for ongoing improve?
mentsIr replacements and minor capital expenditures.

Each of these rate components have been developed by using the
total estimated amount of that type of cost divided by the total
-.ga110ns metered, or EQR's in the service area; or some combination
of these measurements. Items to be included in the operationn
and maintenance cost estimates can include a rate of return on
the rate base or payment in lieu of taxes, at the discretion of

'the City?s policy makers.

debt service charge

'The debt service charge represents the amount of annual debt
service per EQR on debt existing at the time of adoption of the
plan in the then existing service areas.? The method of calcula-.
tion assures that adequate revenue will be collected to pay the
debt service, with a small excess resulting from added in
the service areas after the initial calculation made at the begin-
ning of each year. _This excess should be closed to restricted

reserve at the year end. Each customer is billed wa?c-n v-lv? 



51

amount equal to the debt service charge per EQR times the cus?
tomer's total EQR's, thereby allocating a greater portion of the 
debt service to customers with larger potential user capacity.
This is consistent with the assumptions that a customer should
pay for that portions of the system that his preperty struc?
tures?could require to service. I

An additional debt service charge can be added by service
area for bonds issued for major improvements to the existing
facilities which are not chargeable to the expansion areas,?

if these improvements cannot be financed from other capital

reserves .

operational and maintenance charge

_This charge is to cover the general and direct operating,
maintenance and collection costs of the system, and can in?
clude the pumping costs, if so desired. However, to achieve a
billing system which will more nearly assess the costs of
providing the service upon the persons receiving the benefits,
it is proposed that direct costs which can be identified with
a specific service area should be allocated between users
within that service area according to the rate of metered usage
(or estimates thereof), and pumping charges should be allocated
to customers benefiting therefrom on an EQR (capacity) basis,
then the remaining operational costs of the system should be
allocated over all customers of the system on a water usage
basis. The amount of water for fire_protection, street washing,
unmetered intragovernmental use, or gallons lost through leaks,

mainbreaks or theft is not added in to the total estimated



52
water gallons to be billed for the year, thus effecting a . 

charge of the treatment costs related thereto to be spread .
between all of the customers. This indirectly requires citizens

of the suburban areas to subsidize the City?owned facilities

 

for their personal usage which is not paid for by them or the
_City?s citizens from the General Fund tax base. Water to Open?
space within the City as well as the County should increasingly
be serviced by raw water.

Total gallons estimated to be billed out during the year
must be based on historical usage amounts of the metered-
customers plus some factor calculated to represent usage by
flat rate users. This number should become more firm as the?
.system approaches 100 percent metering. The amount estimated
must be conservative in amount to assure adequate revenue
collection from the operational charges to cover operating
costs. Flat rate users on the system are charged on standard
EQR gallons times a 30 percent surcharge, plus a 50 percent
penalty for not having converted to a meter.

Consideration should be given by the City Council of offer~
ing ?average billing" options to custOmers who have been on
the system longer than twelve months and have good payment
records. This option would provide for twelve average equal
bills based on the prior or an adjusted annual amount;
recalculated at the end of the year to the actual amount which
would have been billed under the regular billing system.

Any excess amount collected from the operational and

maintenance charges above the actual costs of providing the



53

service should be closed to the unrestricted surplus for use

in emergencies and for unexpected necessary purchases.

co?efficient (capacity) charge

I This charge is in the nature of a capacity assessment

upon the customers who obtain benefits from the existing system.
It is to provide a pool of revenues from which to budget sys?
tem improvements and replacements without the necessity of
bending in small amounts for immediately required projects.

The surcharge is calculated from the following table:

 

 

Month Water Usage Co?efficient'FactOr
0 5,000 gallons/EQR 0.75
5,001 ?15,000 gallons/EQR 1.00
15,001 ~30,000 gallons/EQR . 1.25
30,001 ?40,000 gallons/EQR 1.50
40,001 *50,000 gallons/EQR 1.75
50,001 and over gallons/EOE 2.00

The co~efficient factor can.be adjusted annually and separately
among water service areas to produce the desired amount of
revenues to meet the systems needs for this specific type of
expenditure while controlling the water rates within specific
ranges.

Each month the gallons metered (or estimated to have been
used for flat rate customers) is divided by the customer's
EQR's on an individual basis. The resulting gallons per EQR
determines the percentage of the current operational
charge which will be added to the customer's bill for the
specific purpose of purchasing imprOVements which maintain or
increase the system?s capacity. This capital reserve is

critically needed since the utility service connect fees



 ii." . rim..- .J- . . . -- mas-.runs?kaisegu tuning.? sun?. 'u \Xi?nmz . 

54?.

assessed on the existing serVice areas are very small relative
to the improvement needs, and these improvements will be needed
prior to bond issues for major improvements. UnapproPriated
amounts generated from this charge should be invested and be
restricted for future capital improvements.

The impact of this surcharge has not been analyzed. Theo-
retically, it tends to have a greater impact of the low EQR
customer with high water usage. This is the intended result,
since this low EQR customer pays less for a utility connect
charge and less for the debt service charge used to
_provide additional system capacity, but he is actually using .
more of the system's excess capacity than was intended to be
used by a structure of that size. Conversely, the high 
customer pays less in co-efficient charges if he uses less.
cater per EQR because he has already partially made his capital
contribution for excess capacity usage through payment of a 

Ihigher connect service charge and higher debt service payments.

Miscellaneous Water Rates

Charges for raw water are based on $30 per irrigated acre
- per month for raw water from the City's wells, irrigation
ditches or other sources of raw water supply. Carriage rates
have been established at 5 cents per thousand gallons, to be
charged for ran water dedicated to the City by developers
'when such water contines to be used by the customers within?
that specific developed-area. ?The?amount of water which can

'be billed at this rate is equal to the amount dedicated less



. . . 2?05 7- 1-4? . 4 'm 1.2. . 

55

the amount of treated water being delivered to the same

customers.



TABLES

57
TABLE 1

CURRENT AND FUTURE EQR VALUES
AND CALCULATED CONNECT CHARGES

 

 

 

 

 

 

 

 

 

 

EQUIVALENT RESIDENTIAL 

CONNECT a a 3 

SERVICE AREA CHARGES {13 a C)
. a: 
1. Central Aspen _$l,418. 2927 2272 1069 84 3996 2356

2. Smuggler 
Mountain. $1,418. 820 534 1354 
3. Red Mountain $2,795. 175 69 -- 244

4. Red Butte $1,418. 303 117 ?u 420 
6. Buttermilk $5,240Brush Creek luytcomputed 65 62 127 
4636 2386 2116 119 6725 2505

 

 

 

 

 

Source: Estimates prepared by the City Staff, Richard E.
Cassens, consulting engineer and James S. Lockheed,
Water Attorney.

a Assumes the 5 year plan, eleminating the Roaring Fork Plant,
14" line to Highway 82, Roaring Fork water rights, service
.to Brush Creek and using a 15 percent per year inflationary
factor.

Calculations assume .2 EQR per 1000 square feet for all

commerioal structures and 3.5 persons per EQR for all
residential structures.



58

TABLE 2

CURRENT DENSITY AND ESTIMATED 

 

 

 

 

 

SERVICE AREA . FUTURE i TOTAL
COMML. RESID. COMML. RESID. COMML. RESID.
SQ. FT. PEOPLE SQ. FT. PEOPLE SQ. FT. PEOPLE
Central
Aspen 1,135,754 10,243 322,416 3741 1,458,170 13,984'
Smuggler 
Mountain 2,870 1869 4,739
Red Mountain 612 . 241 853
Red Butte 11,060 409 1,469
Highlands 318 ~tw? 252 
Buttermilk . 164,000 892 56,000 675 220,000 1,567
Brush Creek 227 217 444

 

 

 

 

:1,299,754 16,222 _378,416 7404

1;703,186 23,620

 

 

 



3?59
Table 3
CITY OF ASPEN, COLORADO
WATER FUND

BALANCE SHEET
December 31, 1978 and 1979

 

 

 

 

 

 

 

 

 

 

 

 

 

1978 1977
CURRENT ASSETS:
Accounts receivable, net 3 74,320 5' 90,767
Due from General Fund 296,955 602,912
Inventories 112,140 94,456
Prepaid expenses . 3.383 3,679
Total current assets 486,978 791,814
RESTRICTED ASSETS FOR BONDED INDEBTEDNESS:
Cash 129,981
Investments in certificates of deposit 39,000 39,000
Total restricted assets . 39,000 168,982
PLANT, PROPERTY AND EQUIPMENT:
Land and improvements - 1,225,151 110,151
Transmission and distribution 4,964,908 4,800,164
. 5,190,059 4,310,315
Less accumulated depreciation 989,503( 852,855
4,200,556 4,057,460
Construction in process - . 305,742 
Total property, plant and equipment. . 4,506,298 4,057,460
TOTAL ASSETS - $5,032,096 $5018,256
LIABILITIES .
ACCOunts payable . 78,497$ 116,680
Accrued interest 51,053 53,391
General obligation bonds payable 2,620,000 2,790,000
Customer deposits 3,676 3,266
Total liabilities 2,753,226 2,963,337
CONTRIBUTIONS FROM: . 7
Municipality 166,239 166,239
Customers 201,815 201,815
Plant investment fees . - 1,137,470 946,830
Total contributions 1,505,524 1,314,884
RETAINED EARNINGS: - . 
Restricted 262,230- 191,058
Unrestricted . 511,116 548,977
Total retained earnings 773,346 740,035
TOTAL LIABILITIES AND NET WORTH 032 096 018 526

 

 

- . - - - ?l?erwf?r?w-I- - - A?tzzs-r?w

ASPEN000091

60
TABLE 4

PLANT INVESTMENT FEE AND TAP SERVICE CHARGES

 

Single Family $1,000.00 or $50.00 Per Fixture Unit
whicheVer is more.
Duplex (Per or $50.00 Per Fixt?re Unit
whichever is more.
Multi Family?let Unit $1,000;00
Each additional unit $50.00 for each additional Fixture Unit.
NOnuresidential, Commerical, Industrial and Institutional:

 

 

Demand, gEm Meter Tap Size P.I.F.

over but not over - - i
:18 3/4" 1,200.00 - 
18 .30 1" 2,136.00 
30 - 60 . . 4,800.8,544.00 
96 180 3" $19,200.00

180 300' 4" $34,176.00

300 600 6" $76,500.00

If water service is supplied by one or more Pump Stations add

25% fer each Pump Station to base fee.

If outside city limits, multiply P.I.F. (including Pump Station
charge) by 2. .

A P.I.F. shall be assessed for expansion of residential or
non?residential uses. (Additions, Remodels ETC.)

A tap service charge shall be assessed for the cost of taping

the water main in addition to any P.I.F.

Tap service charge shall be assessed as follows:

Size of Tap Meter Tap Service Charges
3/4" 200.00
1" 240.00
375.00
2? 510.00
3" $1,320.00
4" $1,860.00
$3,200.00

ASPEN000092

61

TABLE 5

TREATED WATER CONSUMPT ION

 

 

 

 

YEAR TOTAL TREATED PERCENT

1979 1,134,294,000 1 I
1978 1,146,186,800 8
1977 1,055,383,000 I 6 1 
1976 1,126,527,000 5 
1975 1,180,660,000 1 1
1974 1,188,716,000 7

Source: James J. Markalunas, "City_of Aspeh Annual Water

Report,

1973?1979.

ASPEN000093

62

TABLE 6

CITY OF ASPEN, COLORADO

 

5 YEAR WATER SYSTEM IMPROVEMENTS AND EXPANSION

 

- BOND ISSUE CONSTRUCTION COSTS

 

1980-1985

 

 

.YEAR CONSTRUCTION DESIGN

 

PLANNING INSPECTION TOTAL
1980 - 103,000 67,000 $10,000 8 8,000 - 188,000

. 1981 84,000 11,500 34,500 1,429,000?
?1982 1,207,000 130,000 13,200' 39,600 1,389,800
.1983 1,170,000 50,000 15,200 45,600- 1,284,800
1984 1,320,000 35,000 17,500 39,300 1,411,800

1985 . 720,000 a 0 20,100 '30,200 770,300,

I

vm -- 

ASPEN000094

63

7

CITY OF ASPEN, COLORADO
10 YEAR WATER SYSTEM IMPROVEMENTS AND EXPANSION
BOND ISSUE CONSTRUCTION COSTS

 

 

 

 

 

 

1980?1990

YEAR CONSTRUCTION DESIGN PLANNING INSPECTION TOTAL
1980 103,000 67,000 $10,000 8,000 188,000

.1981 1,299,000 84,000 11,500 34,500 1,429,005
1982 1,207,000 130,000 13,200 39,600 1,389,800
1983 1,170,000 54,000 .15,200 45,600 1,284,000
1984 1,320,000 399,000 17,500 39,300 1,775,800
1985 5,920,000 0 20,100 90,600. 6,030,700
1986 0' 384,000 0 407,100
1987 2,860,000 0' 26,000 60,000 2,946,000
1988 2,660,000 465,000 0 70,000 3,195,000
1989 3,330,000 0 0 79,200 3,409,200
1990 3,330,000 0 0 91,000 3,421,000

$25,476,400



ASPEN000095

CITY OF ASPEN, COLORADO
EACILITY EXPANSION PROJECTS

 

 

 



- PROJECT

COST (1900)
IN MILLION DOLLARS

 

Knollwood M.G. Reservoir:

?Knollwood Land Acquisition
Knollwood Pump Station
Aspen Grove 20,000.gal.

Meadoeood 0.25 M.G.

Tie?Hack M.G.

Droste_0.50 M.G.

Maroon Creek Crossing

Castle Creek Road to Maroon Creek

Willoughby_Way
Old Hospital Connection
01d Hunter Creek -

Maroon_Creek Diversion Dam

Castle Creek Treatment Plant Expansion
Castle Creek Treatment Plant Renovation

'Hunter Creek.Treatment Plant Expansion

Hunter Creek Booster Pump

20" Pipeline to Wagner Park 16" pipeline

16? Piepline Hunter to Spring 0 Cooper

14" Pipeline to Knollwood

Buttermilk Treatment Plant

Maroon Creek Raw Water Pipeline (to Buttermilk)


..
. I

. . 

0.400

0.100
0.040
0.150
. 0.600;
-0.800
_0.250
0.100
0.275
0.110
0.050
p0.035_
-0.400
1.0007
0.250
0.100
'0.100
0.130
0.063
0.192
1.000
0.900

11:? fox-r703?.




ASPEN000096

PROJECT

axe-Lid.4. '?Juu . . . 8

COST (1980) 
IN MILLION DOLLARS 

 

Roaring Fork Treatment Plant

.14? Pipeline (Roaring Fork to Hwy 82)

Brush Creek Raw Water Pump Station

Brush Creek Satellite Treatment Plant



Brush Creek Distribution Mains

Treatment Plant Pipeline

. M- vaeh Creek 1 Pump station

. Brush Creek Transmission Main (From Airport)

Riverside
Hopkins Avenue
Castle Creek

Snowbunny

'WEst Meadow

.Lake Avenue

Williams Addinion

Cooper Avenue

aspen Grove

Avenue

'500110000

Ute Avenue

2.000
0.075
0.100
0.750
0.500
1.100
0.700
0.800
0.055
0.035
0.050
0.055
0.025
0.030:
0.110
0.060
0.150
0.030
=0.090
0.035

ASPEN000097

TABLE 9

 

. 

10 YEAR PROJECT CONSTRUCTION, PLANNING AND DESIGN SCHEDULE
PROPOSED CONSTRUCTION 1980-1990

 

 

CONSTRUCTION PLANNING . DESIGN 

?1980

 

Knollwooa M.G. (Land Knollwood M.G. .. Knollwood M.G. 
. . 2

Acquisition)

14" Pipeline to Knollwood knollwood Pump Station Knollwood Pump Station 1

Start
14? Pipeline to Knollwood 140 Pipeline to Knollwood 
Maroon Creek Diversion Dam ?aroon Creek Divereion Dam 
Castle Creek Plant Expansion Aspen Grove 20,000 gallon i
Maroon Creek Crossing Maroon Creek Crossing. 
14" Pipeline to Knollwood' 
- Complete Castle Creek Plant Expansion Tiehack 2 M.G. Reservior 
Knollwood . Tiehack 2 M.G. Reservior Willoughby Way 3 . a
Knollwdod Pump Station Willoughby Way 20" to Wagner Park 
Maroon'Creen Diversion Dam 20" to_Wagner Park h. 16" Innter to Spring Cooper 

Aspen Grove 20,000 gallon 16" Hunter to Spring Cooper



Maroon Creek Crossing i 

ASPEN000098



1982

 

Tiehaok 2 M.G. Reservoir
Willoughby Way

20" to Wagner Park

16? Hunter to Spring CooPer

1983

 

Castle Creek Plant
Expansion Begin

Castle Creek Road to
Maroon Creek Crossing

'Brush Creek Distribution '1 Hunter Creek Pump Station

TABLE 9 {Continued} 

DESIGN

Castle Creek Road to Maroon Castle Creek Plant Expansion

Creek Crossing . 5

Castle Creek Road to Maroon
Creek Crossing

L9

Droste 0.50 M.G. Reservoir . Castle Creek Renovation

Hunter Creek Plant Expansion Hunter Creek Plant Expansion 3

an"? 2

Brush Creek 1 M.G. Reservoir

Brush Creek Transmission Main - 



ASPEN000099

TABLE 9 (Continued)

?1 we; '7 -

 

 

CONSTRUCTION PLANNING

1984

 

Castle Creek Plant Roaring Fork Plant

Expansion Complete

Castle Creek Plant
Renovation - Begin

Eunter Creek Plant ExpanSion

Hunter Creek Pump Station

1985

 

Castle Creek Plant _?Roaring Fork Plant

Renovation Complete-
Droste 0;50 M.G. Peservoir-_
Brush Creek Distribution
Brush Creek 1 M.G. Reservoir
Brush Creek Transmission Main
1986 
Buttermilk Plant

Maroon Creek Raw Water

DESIGN

Droste 0.50 M.G. Reservoir
Brush Creek Distribution

Brush Creek 1 M.G. Reservoir .

Brush Creek Transmission Main

89

Roaring Fork Plant

14" Roaring Park Hwy 82

f!



TABLE 9 (Continued)

 

 

CONSTRUCTION - PLANNING DESIGN

198?

 

Roaring Fork Planthegin Buttermilk Plant

14" Roaring Fork Hwy 82 Maroon Creek Raw Water

 

1988
Roaring Fork PlanteComplete I Buttermilk Plant -
Maroon Creek Raw Water

19 89 \o

 

Buttermilk PlantrBegin



Maroon Creek Raw Water - Begin_r

1990

 

Buttermilk Plant-Complete

Maroon Creek Raw Water?Complete



- GLOSSARY

. .

 



71

(1-

GLOSSARY

CASH NEEDED BASIS: determines reVenue requirements as the total needed
to pay for the cost of operations, maintenance, debt service expense,
replacements, normal extensions and improvements and transfers to
other funds if appropriate. 

EQUIVALENT RESIDENTIAL UNIT (EQR): the volume of water consumed by
a single family residential unit housing a statistical average
family of 3.4 persons or any different number as determined annually
by the Director. The EQR is based on the following water consuming
structures: two bedrooms; one full bathroom, including toilet,
sink, tub, and shower, one kitchen, including one sink and dishwasher;
one clothes washing machine, and 2500 square feet of sprinkler 
irrigated lawn or garden. 4

EXTRA BASE CAPACITY METHOD: ja rate making method which classifies
operational costs as either customer cOsts (billed by a service fee); 
consumption costs (billed at a metered usage rate) or capacity costs
'related to delivery of the excess of average loads.

FUNCTIONAL COST METHOD: a rate making method which classifies operational
costs as either production or distribution costs to be charged to
users based on metered usage, while the cost of meter reading and
billing are assessed by a basic service charge to each account.

PLANT INVESTMENT FEE: the charge currently required of a customer to
permit a new connection to the utility system. It represents the
customers contribution to the cost of the existing. utility system
and is based on a graduated fee related to the capacity size of the
water tap.

PROJECTED GNP EXPANSION FACILITIES COSTS: the projected costs, in 1980
dollars, for the replacement, major repair and restoration of water
collection, treatment and distribution facilities, and construction
of such new water collection, treatment and distribution facilities as
the City deems appropriate. Said costs shall be paid for out of the
Utility Connect Charge ReserVe.

PUBLIC UTILITY BASIS: a method required by the PUC of revenue requirement
determination which calculates the value of the utility's assets
(the rate base) upon which the entity is entitled to earn a return on
investment. .



- 7 2
SERVICE AREA: those identified areas of existing or potential water
service by the City of Aspen Water Utility, as more fully set forth
in Exhibit A These areas have been designated as having 
specific geographic and demographic characteristics which require
identifiable capital investment in facilities to provide water to
customers within their boundries.

UTILITY CONNECT CHARGE: a charge based uPOn the anticipated water use
of the customer, expressed in which shall be a capital

investment for facilities necessary to.provide water service for
that customer.



 - SOURCES CONSULTED

 

American Water werks Association. Water Rates Manual of Water
Supplx Practices, 2nd ed. New York: AWWA, 1972.

 

American Watet Works Association and Municipal Finance officers
Association. Water Utility Accounting, Ann Arbor, Mich.:
Edward Brothers, Inc., 1970.

 

Briscoe/Maphis, Inc. "Water Systems Report, Aspen, Colorado?
6 March l974. (Mimeographed)

CH2M Hall Consultants, ?Water Rate'Study, City of Aurora, Colorado".
October 1979.

Marka1Unas, James J. "City of Aspen Annual Water 
(Typewritten)

Merrick and Company, ?Feasibility Study ?e Hyaroelectric Generation,?
Aspen, Colorado." April 1974.

Musick, John D., Jr..ed. "Comprehensive Water Management Plan of the
City of Aspen, Colorado". 6 November 1979. (Mimeographed)

PBQ a D, Inc. ?Aspen/Pitkin County Transit Development Program".
November 1979.

Rea, Dale. ?Water Supply for City of Aspen". 1956.

Wright?McLaugh1in. "Water Quality Management Plan: Roaring Fork
.River Basin". May 1974.

"Urban Runoff Management Plan? City of Aspen". August 1973.
Simmons, Larry. "Toward a Restructuring of Electric Rates". October 1974.

Stafford, Brian, ed. "Overall Economic Development Program, 9itkin County."
November 1979. -

Various Certified Public Accounting Firms. ?City of Aspen Annual
Financial Reports?. 1956~79.