It’s no secret the price of building a home is getting more expensive in Colorado and in El Paso County.
Before a house’s foundation is laid, costs start to accrue, including the charges for tapping into water and wastewater.
“The water tap fees are expensive,” said Kevin Walker, public policy chair for the Housing & Building Association of Colorado Springs. “They can range from $9,000 to $35,000 in the Pikes Peak region. Developers have to pay any fees to the city of Colorado Springs or the district where they’re building a new home.”
Tap fees historically are higher in northern El Paso County.
“I think Monument might have the highest fees, but I’m not certain of that,” Walker said.
Multiple phone calls and messages to the town of Monument’s director of public works by the Business Journal went unanswered.
There are more than 30 water providers in the county.
Walker said recent tap fee increases are likely due to the rising cost of and demand for water.
“In other states, water is a lot more plentiful,” he said. “Like in Texas, for example, water fees are not nearly as much.”
The majority of Colorado’s water — roughly 80 percent — is designated for agriculture.
“There is a scarcity of water for urban uses,” Walker said. “Even though it seems like there is a lot of water up in the mountains, a lot of it isn’t ours. We don’t have the rights to it, and when we do find water, getting it to the places where we need [it] is expensive.”
The Academy Water and Sanitation District, which services 309 homes off Gleneagle Drive and in Pleasant View Estates, hasn’t raised its tap fees in more than 10 years, said Anthony Tastorello, operations manager.
“We are pretty much built out with maybe one or two more lots available, so our tap fees are extremely cheap,” he said, adding the development charges combined for water and wastewater are about $12,000.
Colorado Springs Utilities also hasn’t adjusted its tap fees in the last decade, according to Sonya Thieme, rates manager.
“Our development charges or tap fees tend to be on the lower third compared to others across the Front Range,” she said. “I think our policy-makers — our city council and utilities board — have supported a methodology for rates and fees that results in a calculation that is favorable.”
Thieme says development charges may be higher in certain areas of El Paso County because of the way they are calculated by the utility provider.
“I would have to look at the district’s policymakers and what they are directing as far as the methodology being chosen,” she said. “There is not just one methodology, and it’s generally being driven by an underlying policy or statement of that community.”
For a typical new home, the water tap fee for Colorado Springs Utilities is $9,292 and wastewater is $1,863.
Last year, CSU created a lower water development charge of about $5,800 for lots less than 1,500 square feet, Thieme said.
“We keep our rates and fees as low as possible,” Thieme said.
However, providers will raise tap fees or rates when necessary to recapture costs.
“Water is not something you generally use to make money,” Walker said. “Plus, most of the districts are public entities.”
For example, Colorado Springs Utilities is a not-for-profit, Thieme said.
“We recover only what it costs us and that becomes the value to our community of being a citizen-owned utility,” she said. “We build no profits into our rates or tap fees.”
Nonetheless, Walker fears the area’s predicted population boom will cause fees to expand in coming years as the need for water grows.
“This water thing is and will continue to be really complicated,” he said. “In El Paso County, especially in the outer districts, a lot of that water is groundwater so getting it out of the ground and treating it and then planning for the long-term replacement of that water is expensive and very difficult to figure out. Unfortunately, water is only going to become more of a commodity and expense for Colorado developers and, in turn, residents.”