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Residents urge higher water cash-in-lieu fees; city explains methodology and next steps
Summary
A resident urged council to raise the cash-in-lieu fee for raw water, arguing Loveland's proposed $48,825 per acre-foot is well below neighboring cities; staff explained the March 2021 methodology change and agreed to provide detailed comparisons and documentation.
A resident asked the council to revisit the city's cash-in-lieu (CIL) fee for raw water during public comment on the 2026 budget. Gail Bernhardt said Loveland's proposed fee—listed in the budget packet at $48,825 per acre-foot—undervalues the city's raw water compared with nearby municipalities and water providers.
Bernhardt noted that nearby jurisdictions (as cited in her public comment) have higher fees and urged staff to return with a market-aligned fee instead of the lower figure in the packet. “In my opinion, it is perhaps the most important fee because it's a fee that we, the city charge for raw water, a capital asset,” Bernhardt said.
Molly Elder, deputy chief financial officer, summarized staff background: the city previously used the price of Colorado-Big-Thompson (CBT) shares when calculating CIL, but council changed the calculation in March 2021 to base the CIL on current costs of native ditch shares and storage. Staff said the change followed limits on the city's ability to purchase additional CBT shares. The Land Use Commission reviewed public input and voted unanimously to continue the current CIL calculation.
Councilor Scott Olsen added context: the city's cash-in-lieu revenues have been directed to projects such as Windy Gap storage and that raising the fee substantially would increase development costs, including for affordable housing projects.
Staff committed to provide a longer written explanation and supporting documentation to council by email and to return with more detailed comparisons and the rationale for the CIL calculation prior to final action. The council did not change the fee at the meeting; a staff memo and further discussion were requested.
Ending: Council heard public concern about raw-water CIL pricing, staff outlined why the current formula is in use and said the Land Use Commission supported it; staff agreed to follow up with more detailed documentation and regional comparisons before any final change is considered.
