TC Res. No. 2014-04 UERWA Capital Replacement Program Base Rate1114 WIN] R I of
SERIES OF 2014
Us k4w
RATE
WHEREAS, the Town of Avon ( "Town ") is a Participating Member in the Upper
Eagle Regional Water Authority ( "Water Authority ") via the Establishment Agreement
(dated September 18, 1984), and the Amended and Restated Service Contract (dated
January 1, 1998); and
WHEREAS, the Board of Directors of the Water Authority has proposed a Capital
Replacement Program Base Rate Charge, the proceeds of which will be placed in a
Restricted Reserve Fund designed to pay on a current and ongoing basis for capital
replacement of existing facilities (the "Capital Replacement Program Base Rate" or
" CRPBR Charge "); and
WHEREAS, the intent of the Capital Replacement Program Base Rate is to avoid
financing costs, and pay directly from customer revenues those recurring costs for the
replacement due to predictable aging or obsolescence of the following types of assets:
1. Assets with a life expectancy of between 5 and 20 years;
2. Assets with a longer life expectancy but requiring an on -going periodic
replacement investment, such as for a long -term pipe replacement program.
NOW, THEREFORE, BE IT RESOLVED that the Town Council of the Town of
Avon consents to the establishment of the proposed Capital Replacement Program Base
Rate in the initial amount of $3.25 per SFE per month for implementation as of April 1,
2014; and as said CRPBR Charge may be adjusted in future years, subject to the following
conditions:
The proceeds from the Capital Replacement Program Base Rate shall be used
solely for capital replacement expenses caused by wear and tear on and
obsolescence of existing capital facilities.
2. A Capital Replacement Program Restricted Fund shall be established to
account for revenue and expenses dedicated to capital replacement and
associated costs.
Town of Avon
Resolution Consenting to Upper Eagle Regional Water Authority
Creating a Capital Replacement Program Base Rate
Page 2
3. Subject to a maximum increase set forth in Section 4 below, the Authority
annual budget process shall determine the Capital Replacement Program
Base Rate appropriate for subsequent calendar and budget years. The initial
rate was determined from past budget history and will generate
approximately $640,000 per year. The Authority Board's budget process
will re- evaluate the need for the rate every year and adjust it, either by an
increase or decrease, as determined by the Authority Board
4. Any increase in the CRPBR Charge above the increase in the Rate of
Inflation as defined by the Denver /Boulder /Greeley consumer price index
shall require the unanimous consent of the Participating Members, per the
Establishment Agreement.
ADOPTED this I I" day of March, 2014, by a vote of 5 for and i opposed.
Town of Avon / ab lst -&t