How Denver Water Spends Your Money
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–Where Your Water Dollar Goes– Every dollar you pay on your water bill gets allocated to the following expenses: Per $1.00 of Water Bill   Project Funding     Debt & Bonds 17¢   Operations & Maintenance 45¢   Capital 38¢     System-wide repairs, water treatment, salaries for 1000 employees   Improvements to system, new facilities, new pipes, etc. No Profit is Made

You may not know
that Denver Water...

• Does not operate for profit
• Is independent of Denver City government but is subject to the City Charter
• Receives no tax revenue
• Receives revenue from water sales & tap fees
• Uses all revenue to maintain and enhance the system
• Must keep a reserve fund for natural disasters (fires, floods, drought)
• Gives no bonuses or stock options to employees
• Pays the five-member Water Board of Commissioners $25 each, per meeting

Maintaining your water system

Just as your car needs periodic maintenance to run smoothly, the extensive system of Denver Water reservoirs, treatment plants and pipes needs regular maintenance to function properly so that clean water reaches your home every day.

With extended use, water pipes can become corroded or develop mineral build-up that can affect water quality. Older pipes and mains can develop leaks and even break. Cleaning, repairing, and replacing the 2,600 miles of pipeline is a constant process all over the Denver Water service area, and it is crucial to providing you with clean, fresh water.

The Cost of Drought

Three consecutive years of drought have taken their toll on Denver Water's finances. Saving water is essential during a drought to ensure supplies will last through it. But decreased water sales mean a reduction in revenue that Denver Water relies upon to operate and maintain the system. Revenue goes up and down, but the cost of supplying water remains the same. This year, total costs (including drought costs) are $227.6 million. Because of restrictions and lower water sales, revenue is expected to be $209.9 million, leaving a shortfall of $17.7 million for 2004.

Last year's drought and tap surcharges were used for drought-related expenses such as the Hayman fire clean-up, the restriction enforcement program, and conservation rebate programs. Only $9.6 million was received in drought and tap surcharges in 2003, but drought and rebate program costs equaled $12.5 million, leaving a deficit of $2.9 million.

It is expected that budget shortfalls will continue after the drought, unless additional revenue is raised. Water usage will remain lower than pre-drought levels, due to newly adopted, permanent conservation habits. But the cost of providing clean water to customers remains the same.

What Denver Water is doing about the budget shortfall

Denver Water has reduced costs by deferring major capital and maintenance projects and by instituting a hiring freeze. But this has not made up for the shortfall and projects cannot continue to be deferred as it will eventually have an effect on the quality of service to customers.

In September 2004, Denver Water Board of Commissioners voted to raise rates in order to recover much needed revenue. The new rates become effective January 1, 2005. Even with the increases, Denver Water rates are still among the lowest in the region.

If drought persists, more increases are likely, as well as drought surcharges.

For more information, please contact Denver Water Community Relations at 303-628-6567.