Breckenridge Texan

By Carla McKeown/Breckenridge Texan

After a lengthy discussion at their regular meeting on Tuesday, Aug. 4, the Breckenridge City Commission voted unanimously to raise the water rates by 4.14%, beginning in 2027.

Chris Ekrut with NewGen Strategies & Solutions presented a 10-year plan offering three options to the commissioners, who chose the lowest plan offered, the one that will ultimately raise City of Breckenridge water rates by almost 50 percent by 2036. The other two options would have raised rates by more than 60 percent and 55 percent, respectively, in 10 years.

Ekrut said the plan presented was designed to ensure the financial stability of Breckenridge’s water utility and to plan for situations such as infrastructure that needs to be replaced. He presented the commissioners with three plans that would raise the rates by different percentages each year, beginning in 2027:

• Scenario 1: 4.83% increase
• Scenario 2: 4.48% increase
• Scenario 3: 4.14% increase

The plan, as presented, would be to increase the water rates by the approved percentage every year for the next 10 years.

Breckenridge City Commissioner Junior Fernandez, second from left, voices his concerns about raising water rates during the Aug. 4 meeting. Pictured from left are commissioners Paul Huntington and Fernandez, Mayor Kord Trammel, and commissioners Justin Rose and Blake Hamilton. (Photo by Tony Pilkington/Breckenridge Texan)

Following Ekrut’s presentation, the commissioners and City Manager Cynthia Northrop discussed the three options, as well as the reasons for needing to increase the rates.

“We have aging infrastructure. Everybody knows that we have an oversized infrastructure. Our infrastructure is just not in good condition,” Northrop said. “… at our water treatment plant, we have two clarifiers, and both clarifiers are limping along. And we’ve been investing money in them, but to replace just one clarifier is $1 million. So if they both went down, we would have just enough to replace both clarifiers, and our fund balance would be wiped out. I mean, that’s how fast it can go.”

A couple of the commissioners voiced concerns about raising the rates.

“I’m not for a 10-year plan with a compounding 4 percent cost,” Commissioner Justin Rose said. “I personally would like to see this revisited every year and put to a vote, because I may not be on the commission in two years. … I completely agree with what you’re saying. Absolutely, with our infrastructure, like Commissioner (Paul) Huntington said, it’s brittle. I’ve personally witnessed this for 15 years, but I think the compounding part of the 4 percent that might be a little steep. We are a single community in a very large county, and money doesn’t go as far as it used to.”

Commissioner Junior Fernandez agreed with Rose about the need to approve future rate increases year-by-year. “We’ve got 40 percent of our customers that can’t pay their water bill right now, and now you’re just adding five more dollars, five more dollars, and we just added for trash,” Fernandez said. “So I mean, you’re just getting them more in debt.”

Northrop said that although the plan presented by NewGen is for 10 years, the commission will still be required to approve the water rates each year when the fee schedule is presented for approval.

All five commissioners voted in favor of approving Scenario 3, the one that offered the lowest amount of increase each year, 4.14 percent, for a total increase of 49.93 percent by 2036.

According to the information provided by Ekrut, the approved plan will increase water bills from a base rate for 2,000 gallons of $43.02 in 2026 to $44.80 in 2027. If approved each year, according to the plan, by 2036, the base fee will be $64.53 for 2,000 gallons.

For homes that use 5,000 gallons of water per month, the rates will increase from $64.89 in 2026 to $67.57 in 2027, and by 2036 it will be $97.29 if the annual rate increases are approved.

Additionally, the wastewater (sewer service) rate will increase from $53.67 in 2026 to $55.89 in 2027 for a minimum of 5,000 gallons. It is projected to be $80.50 by 2036, if the commission continues to approve the plan’s rate increases.

Note: The commissioners were not required to pass an increase. They could have voted to not raise the rates, leaving them as they are now, or tabled the topic until a different option was presented at a future meeting, although Northrop said she did not recommend tabling the topic due to the need to get a budget put together.

The 2021 Plan

NewGen Strategies & Solutions is the same company that recommended Breckenridge’s water rate hikes in 2021.

In April 2021, Ekrut presented five options for a five-year plan, and at the following meeting the then-commissioners voted to implement the most aggressive plan. From 2021 to 2025, the water rate for 5,000 gallons of water increased from $51.50 (including a $10 revenue deficit charge that was added to the customers’ bills) to $64.89, an overall increase of 26 percent over the five-year period.

The five scenarios presented in 2021 ranged from scenario 1 that had no change to scenario 5 with the 26 percent increase that was chosen. Scenario 5’s increases ranged from almost 16 percent the first year to less than 1 percent the final year.

According to the May 6, 2021, Breckenridge Texan article, the funds generated by the 2021 plan were to be used for paying off debt for state-mandated upgrades to the water plant, increasing salaries for some City employees to reduce turnover and ensure quality employees, replacing water meters, hiring additional employees, replacing old, worn-out equipment, and transferring money to the City’s general fund to help pay off debt and pay for other expenses.

Additionally, according to Heather Robertson-Caraway, who was Interim City Manager at the time, the increase would not apply to water department customers who used less than 5,000 gallons of water per month, a request she said she made specifically to protect local residents who live on fixed incomes and who do not use much water. That exception does not appear to have been made in the 2026 plan, as the presentation by Ekrut shows the projected rates for 2,000-gallon usage and 5,000-gallon usage increasing at the same rate.

After the 2021 approval, each year the city commission approved rate increases as planned; although, based on the fee schedules for each year, it appears that the base rate for 2,000 gallons or less increased by 7.55 percent over the five years and the rate for 5,000 gallons increased by a total of 26 percent. So, while those using more water did bear a bigger portion of the burden, those using 2,000 gallons or less did see a slight increase.

Connection to property tax rate

In 2021, the city staff and commissioners expressed their hope that by raising the water rates, they would be able to lower property taxes.

According to that 2021 Breckenridge Texan article, they thought the tax rate could be lowered starting in 2023. And, according to the records, the rate for 2022-23 was set at $1.02 per $100 property valuation. That was a 4-cent drop in the rate from the previous year; however, it was still significantly higher than the “No New Revenue” tax rate ($0.85851/$100 valuation). So, although the rate went down, the amount of money raised by the tax still increased.

And, then for 2023-24, the rate rose to $1.05471/$100 valuation, compared to the No New Revenue rate or $0.91750. For 2025-26, the rate dropped to $1.04471/$100 valuation, about 4 cents higher than the No New Revenue rate of $1.00536/$100 valuation. In 2025-26, the rate dropped again to $1.02893, which was higher than the No New Revenue rate of $1.00219/$100 valuation.

According to the notice posted by the City of Breckenridge, the proposed rate for the 2026-27 tax year, the rate is likely to decrease to $1.01893/$100 valuation. The No New Revenue rate for the year is lower at $0.90389. Additionally, according to the notice, the appraised value of the average home in Breckenridge has gone up, so homeowners could still end up paying more property taxes (as well as a higher water bill) in the coming year, depending on the value of their home.

The City will hold a public hearing regarding the proposed property tax at 5:30 p.m. Tuesday, Aug. 25, in the Commission Chamber at City Hall (north side entrance), 105 N. Rose Ave.

Cutline, top photo: Chris Ekrut with NewGen Strategies & Solutions, at podium, presents a 10-year plan for Breckenridge water rates at the Aug. 4 City Commission meeting. The commissioners voted to approve the lowest rate hike suggested. (Photo by Tony Pilkington/Breckenridge Texan)