By Mark Davidson
The Evergreen Metropolitan District and the West Jefferson County Metropolitan District serve the water and wastewater requirements for a large portion of the Evergreen area. With the recent advertising and publicity regarding Amendments 60 and 61, the boards of EMD and WJCMD thought it would be beneficial for our customers to understand our interpretation of the changes that would occur if these amendments are passed.
Neither EMD nor WJCMD imposes taxes on customers. The facilities and services are supported by tap fees and monthly service charges. To effectively manage operations, the boards formed enterprises to exempt the districts from the tax provisions of the Tabor Amendment. These enterprises provide greater efficiency and economy for water and wastewater utilities, thus benefiting our customers with lower rates.
Amendment 60 is an attempt to subject all government enterprises to the payment of property taxes on their assets, including water and wastewater treatment plants, reservoirs, pump stations, all pipe in the ground, related facilities and water rights. Once valued for taxation, these property rights would cause our districts to pay several million dollars a year in property taxes. In fact, if this amendment is passed, the tax bill would become the largest single operating expense for the districts.
For customers of the districts, this would likely result in a rate increase of at least 33 percent. It is estimated that with these additional expenses, an average water use customer in the Evergreen area would pay around $26 more a month, or $312 more a year, for the same service provided today. Since neither district currently assesses a property tax, there would be no offsetting revenue against this rate increase.
In addition, Amendment 61 puts limits on the term length of borrowing for new water and wastewater projects, thereby reducing all future borrowing to 10-year terms. This amendment would put the burden of all future needs for expansion and upgrades to the utility and its treatment methods on the existing customers, and significantly reduces the burden on future customers. Debt-term limitations are currently at 20- to 30-year terms, much like a home loan, more in line with the 30- to 50-year life for the facilities. It makes more financial sense for governments to have a longer term limit for debt to more equitably spread out debt service costs over a larger customer base over time — as opposed to a more contracted debt term that would push up rates to the existing customer base, in order to pay off the debt more quickly even though the facility may be productively used for 30-plus years. Longer debt term limits enable the enterprise to maintain rates more efficiently for its customers.
The boards of directors of EMD and WJCMD have adopted resolutions urging their customers to oppose Amendments 60 and 61.
This column was written by Mark Davidson, chairman of the board of the Evergreen Metropolitan District, and Kelly Garrod, chairman of the board of the West Jefferson County Metropolitan District.