Aurora water users could see an increase in their water and sewage bills next year, as well as fees for using a credit card to pay up, as city staff say inflation is driving up the costs of doing business.

A proposal to increase 2023 water rates by 4%, sewer rates by 5% and stormwater rates by 3.5% was introduced at council’s Monday study session. Additionally, water fees could increase by 11.6%, and sewer fees by 6.3%. While rates cover operating and maintenance costs, fees support costs associated with new growth.

Council will consider the water and sewer proposal during the city’s budget process, although the plan will receive its own vote outside of the 2023 city budget approval. The proposal is expected back to council for an Oct. 8 budget workshop, with a first reading on Oct. 24 and final approval on Nov. 7. If approved, the proposal would take effect on Jan. 1, 2023.

Jo Ann Giddings, the deputy director of Aurora Water’s financial services, said increased expenses is one driver behind the proposed rate and fee increases.

Water and wastewater costs have increased nationally by an average of 4.18% a year since 2010, and 70% in total. But Aurora’s water bills have increased about 29%, or on average 2% annually in that same timeframe, Giddings said.

Electricity costs have skyrocketed since 2021, jumping 71% since 2019, something Councilmember Steve Sundberg called “mind-boggling.” Water Director Marshall Brown told Sundberg numerous factors have influenced that, including rate increases, increased demand, and the higher costs of treating lower quality water.

Inflation is also affecting the cost of chemicals, according to the water department’s Monday night presentation. Among seven chemicals used in water treatment, the rise in cost since 2021 ranged from 5% to 149.6%.

“Some of them are continuing to grow and obviously that’s an expense that we can’t cut back on,” Giddings said.

The department originally proposed a 5% increase in water rates but lowered it to 4% after receiving committee and councilmember feedback saying the original ask was too high, Giddings said. Previous years have seen an increase of 3.5%.

To compensate for the 1% difference, Giddings said the water department reduced its request for full time positions by two. They also developed a plan to pass on the costs associated with credit card processing to the customer.

Credit card fees have also risen dramatically in the past decade, Giddings said, particularly since 2016 and 2017. The amount of credit card fees in 2016 amounted to $419,483, and that figure has steadily climbed, reaching nearly $1.58 million in 2021.

Staff’s proposal to council is to charge customers processing fees starting in mid-2023. Giddings said there are numerous ways to pay water bills and the city would begin educating people on less costly methods.

The city’s policy is to implement rate increases in small increments each year, rather than double-digit increases periodically, Giddings said. That is intended to help people better budget for them.

Different types of customers also receive different rates. Cumulatively, the proposed water rate increase is 4%. For residential customers, it will be 5.7%, for multi-family customers 1.2%, for irrigation 3%, commercial customers 3%, a 4% increase for hydrants, and 10.7% for fire protection customers. There is also an across the board 4% service charge rate increase in the proposal.

Billing works in a tiered system aimed at incentivizing water customers to use less. Customers will not see an increase for the first 5,000 gallons used. The rate for using between 6,000 and 10,000 gallons would rise by $0.60, the rate for using 11,000 to 20,000 gallons would rise by $0.85, and the rate for using more than 21,000 gallons would rise by $1.55.

“A good chunk of our customers are not going to see much of an increase,” Giddings said. “It’s the high usage customers that will see the really big increases from this.”

Based on usage, about 30% of customers will see on average less than a $1 increase on their monthly bills. Another 20% would see between a $1 and $2 increase, while 14% could see an increase of less than $3.

The department has proposed raising sewer rates by 5% and stormwater rates by 3.5% for all customers. The average customer would see an average monthly increase of $3.75, or 4.1%.

As for connection fees, Aurora Water is proposing an 11.6% increase, although Giddings cautioned that multiple factors will influence how the city calculates that fee and it could fluctuate. Sewer fees are proposed to go up by 6.3%. There is not a planned increase to stormwater fees.

Mayor Mike Coffman praised the city’s policy of implementing small increases each year, although some councilmembers expressed concern about asking customers to cover credit card processing fees.

Councilmember Curtis Gardner said he opposes placing the burden of credit card fees on customers. Agencies such as the DMV, Xcel and potentially the city’s water department all charge credit card fees but do not have competition, and customers have no choice in where they receive those services, he said.

“One of my biggest concerns is especially underserved populations that don’t have access to a checking account. And in a lot of cases, they use things like prepaid Visa cards,” Gardner said.

Councilmember Danielle Jurinsky also hesitated to ask customers to pay credit card fees, saying in her industry the fees are clearly communicated on bills, and that customers have the option of paying in cash.

Jurinsky worried that Aurora water customers do not have the option to pay in-person although Brown clarified the department has resumed accepting payment at the municipal center.

Brown said the increase in costs for processing credit cards is affecting more than Aurora. The city has negotiated credit card fees with its vendor and expects the cost to be down from $1.7 million to $1.2 million.

In the next six months, the department would also plan to increase public education about other payment methods to help people avoid card fees, he said.

“We’re also sensitive to that,” he said.

Proposed water and sewer cost increases

Additionally, users may cover the fees from paying with a credit card.