Coloradans will see discounts for the waterline connection fees that come with new houses and commercial buildings because of a newly signed — and much-contested — law.
The legislation, House Bill 1211, focuses on tap fees, one-time charges that developers and property owners pay when they want to connect a new building to an existing water system. The connection fees vary widely — from a few hundred to hundreds of thousands of dollars — based on the location and type of development.
The law’s supporters, including developers and housing officials, say the fees are too expensive for people to build affordable housing, like apartments, condo buildings or small houses in backyards. Its opponents, including many water districts, say the fees are set to cover the costs of building pipes out to new houses and paying for more water — both of which are increasingly expensive.
Colorado Gov. Jared Polis signed the bill into law during a ceremony at Addenbrooke Park in Lakewood on Friday afternoon, touting it as part of a broader effort to create more housing that Coloradans can afford.
“These laws break down cost barriers to make it cheaper to build housing and ensure fees don’t impede new housing opportunities,” Polis said in a news release. “In Colorado, we are looking at every solution to lower the cost of housing, and I am proud to continue that important work today.”
Most tap fees are charged at flat rates based on meter size. Starting in August, the new law requires water districts to consider offering discounts for water conservation measures, like expected long-term water usage, and the use of water-efficient appliances and gray water systems. Or, districts could tie their fees to home size based on square footage, or the number of bedrooms and bathrooms.
Districts don’t make a profit on tap fees, and they’re legally required to make sure the calculations reasonably compare to the actual costs. This new law puts the requirement into state statute. It also says water districts have a duty to provide water if they have the capacity to do so.
The bipartisan law, which passed the state Senate and House by wide majorities, focuses on special districts that manage water systems, not other water providers, like cities and towns.
Democratic Rep. Rebekah Stewart of Lakewood, one of the bill’s sponsors, claimed during the legislative session that cities and towns have more accountability and are already doing most of the actions called for in the bill.
“This is one of the [bills] that came from community and my own experience as a local elected official,” Stewart said Tuesday. “Those types of bills that come from the ground up are fun. I’m really proud of it.”
Trickle down savings
Western Resource Advocates, an environmental advocacy organization, offered steady support for the legislation. The new law draws from the organization’s recent study, which found that conservation-oriented tap fees more fairly price tap fees based on water demand at new sites.
“Reducing water demand in new development helps save water and money for both developers and special districts,” Chelsea Benjamin, a Western Resource Advocates policy advisor, said in a written statement.
That will trickle down to housing prices and monthly water bills, she said.
That’s not necessarily the case, according to some water districts who say the money for infrastructure might end up coming from monthly water bills.
For Ty Jones, district manager for the Clifton Water District, the criteria for reducing tap fees aren’t realistic.
Clifton Water serves 12,300 taps across about 10,720 acres around Clifton, located between Palisade and Grand Junction.
A new home might include a graywater system or a certain square footage at the beginning, but new owners can change all of that, Jones said.
Lawmakers amended the bill to allow districts to recoup the lost income from discounted tap fees when conservation measures are modified or the building’s structure changes.
But special districts aren’t involved in permitting, and they’re not updated when changes are made to buildings or landscaping, Jones said.
“We don’t have the staff nor the desire to go through and monitor those all of the time,” he said. “It would be impossible for somebody to do that.”
A statewide fix for a local issue?
While groups like the Special District Association of Colorado oppose the new law, affordable housing advocates, like the pro-growth YIMBY Denver, and Lakewood officials support it.
“One of the ways you know that this bill represents an important step forward is that some of the water and sewer districts were frankly fighting it,” Lakewood City Council Member Roger Low said.
Putting new standards into law prevents “bad actors” from setting tap fees based on opposition to new developments and increased density instead of infrastructure costs, he said.
When asked to provide an example, Low said he did not want to single out any one provider but that the city has heard complaints from people served by Green Mountain Water and Sanitation District.
Green Mountain testified against the new law, saying there are already requirements in place to make sure tap fees directly reflect costs. Its most common tap fee is $17,124 and is based on a rate study, District Manager Josh Stanley said. The highest fee, which is for the largest water users, is $291,107.
The district is studying the new law and will make sure its tap fees comply, Stanley said.
“It’s singling out special districts who provide water and sanitation services,” he said. “There’s other entities out there, like municipalities, counties that do the same sort of service.”
Now, special district water providers around the state are analyzing the new law to understand its impacts and whether they need to change their tap fees.
Jones in Clifton questioned the whole basis for the new law: It seemed like a local issue in Lakewood ended up changing the rules for the entire state.
“I think that’s where I had the biggest hang-up,” he said. “It’s like, you all are having a problem, find a way to resolve it rather than dragging the whole state and all of the special districts into the mud with you.
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