EXHIBITS TO THE CLIFTON WATER DISTRICT  -  RULES AND REGULATIONS.

EXHIBIT VI    -    RESIDENTIAL TAP FEE POLICY

Effective Date: 2/12/2026

Purpose and Scope

This policy outlines the basis for how Clifton Water District (the District) establishes a fair, consistent methodology for assessing residential tap fees, while meeting compliance with relevant state laws and regulations concerning tap fees for utility districts, including HB 25-1211 and C.R.S. § 29-20-104.5, Colorado’s Impact Fee Law.

Terms and Definitions

Accessory Dwelling Unit (ADU): In the context of this policy, an ADU refers to an internal, attached, or detached dwelling unit that: (a) provides complete independent living facilities for one or more individuals, (b) is located on the same lot as a proposed or existing primary residence; and (c) includes facilities for sleeping, cooking, and sanitation.

Greywater System: In the context of this policy, a greywater system is a permanent, indoor greywater recycling system designed to capture and treat water from specific fixtures (such as bathtubs, showers, or clothes washers) for reuse in non-potable applications, including toilet flushing or subsurface irrigation, in strict accordance with Section 25-8-103 (8.4) of the Colorado Revised Statutes, and approved by the District and applicable local health departments.

HB25-1211: House Bill 25-1211 enacted in May 2025, states that a water district has a duty to provide water service if the district has the capacity to do so, with certain exceptions. The Bill also requires special districts to satisfy certain requirements when establishing the amount of a residential tap fee, including ensuring that the tap fee is reasonably related to all costs incurred by the District in funding and providing water service, and applying at least one factor supporting the calculation and setting of proportional or reduced fees.

Irrigation Access: In the context of this policy, Irrigation Access is having a functional connection to a method of artificially applying water to land, typically for agriculture or landscaping, through a network of pipes, pumps, sprinklers, or other delivery methods, using water that has not undergone any treatment processes typically applied to drinking (potable) water. Irrigation Access in this Policy means a system that does not use water provided by the District. Grand Valley Irrigation Company (GVIC) is an example of a local irrigation water provider.

Multi-Family Residential: In the context of this policy, “multi-family” refers to properties like apartment buildings, trailer parks, or condominiums containing two or more separate housing units within a single building or complex that may be individually metered or share a single water meter.

Primary Unit: The largest dwelling unit, measured in finished interior square footage, within the multi‑family development.

System Development Fees: System Development Fees (SDFs) are one-time charges to new residential connections to help fund the cost of expanding or upgrading the water system infrastructure and ensure that new housing unit doesn’t unfairly burden existing customers with the costs of providing service to new users.

Tap Fee: In the context of this policy, a Tap Fee is the combination of a System Development Fee and any applicable discounts into a one-time charge to developers or property owners to connect a property to the District’s system.

Unit Cost of Capacity: The base value derived by dividing the total cost of CWD’s infrastructure by the system’s total capacity.

Methodology

For System Development Fees (SDFs), the primary consideration of the District is that “growth pays for the costs of growth.” This ensures that existing customers do not subsidize future customers. In addition to meeting the requirements of HB25-1211 and the District’s goals for recovering costs of growth, SDFs are developed in compliance with C.R.S. § 29-20-104.5, Colorado’s Impact Fee Law. The American Water Works Association (AWWA) and Water Environment Federation (WEF) publish recommended industry guidelines for calculating residential SDFs. Methods exist that use either the existing system capacity and value, future system expansions capacity and value, or a combination of both. The combined method was followed by the District in calculating its SDFs.  The combined methodology is appropriate for utilities with some available capacity in the existing system as well as measurable future expansion.

Valuing System Assets: Following the AWWA Manual, the District valued existing fixed asset inventory according to the replacement cost (in today’s dollars) less depreciation, and its Master Capital Improvement Plan (CIP). Only physical assets were included in the determination of system value.

System Capacity: To calculate capacity, the combined methodology captures the existing capacity of the system, including separate components such as storage, pumping, and treatment, and future capacity of growth-related CIPs. Capacities for the District’s existing and future systems components were calculated based on assumptions in the Capital Improvement Plan and discussions with staff. The capacity of the entire system is primarily based on how much the Treatment Plant can produce. The capacity of the Distribution system itself is a difficult amount to estimate in terms of gallons per day, and capacity can vary widely in the Distribution system based on a variety of factors. 

Meter Size Multiplier:

Meter size is a widely used and straightforward method to predict the highest potential flow of water demand that the meter and infrastructure will need to provide. The necessary meter size is determined through engineering calculations based on maximum predicted flow rate. Most single-family residential homes require 5/8 inch or 3/4 inch meter. The maximum flow rate is used as the proxy for water demand, and fees can be charged accordingly.

Residential Tap Fees

Tap fees must accurately reflect the cost of expanding, operating, and maintaining the District’s water infrastructure, promote fairness among all customer classes, and support long‑term system reliability. By defining the basis, methodology, and application of residential tap fees above, the District seeks to provide transparency for customers, financial sustainability for its operations, and alignment with regulatory and planning requirements. Residential Tap fees are determined by multiplying the Unit Cost of Capacity by the Meter-Size Multiplier. See Current Rates and Fees for rates currently in effect.

Accessory Dwelling Unit (ADU) Tap Fees

This policy creates ADU-friendly tap fees by assigning each Accessory Dwelling Unit at 70% of the standard System Development Fee for new water taps. The intent is to ensure charges remain proportional to service costs while encouraging smaller, efficient homes. To further this goal, System Development Fees are fully waived for ADUs under 750 square feet. Properties with ADUs 750 sq ft or smaller are billed under the standard usage rates for a single tap, which includes up to 3,000 gallons in Tier 1 for both units. ADUs over 750 sq ft are billed at double the usage rates for a single tap, with a 6,000‑gallon Tier 1 allowance for the combined units. If more than one ADU is built on a property, the units are considered Multi-Family Units, and the District reserves the right to reassess and collect supplemental fees if the property's status changes after the original tap fees are collected.

Multi-Family Unit Tap Fees

For Multi-Family Units, the Primary Unit shall be assessed at 100% of the System Development Fee (SDF), calculated according to the size of the Master Meter under the District’s current fee schedule. Each additional unit shall be assessed at 70% of the base SDF rate associated with a 5/8-inch meter, regardless of the actual square footage of the additional unit. The District reserves the right to reassess and collect supplemental fees if the number of units or unit configuration changes after the original tap fees are collected.

Greywater System Discount

A tap fee discount for new housing units incorporating approved indoor greywater recycling systems. Eligibility requires approved plans and permits, homeowner maintenance agreements, and may involve supplemental fees if water demand increases. Discount applies to the tap fees of the Primary Unit only.

Irrigation Access and Discount

Irrigation access allows properties to draw water specifically designated for irrigation, avoiding the use of the more expensive and thoroughly processed potable water supply. This reduces the overall demand on the treated water supply, allowing it to be conserved for essential indoor uses or for other purposes where potable water is strictly required. Because of this reduction in use and demand, if a property purchases a tap that will also have access to a functional and active irrigation system, they are eligible for a reduction in the base tap fee. Discount applies to the tap fees of the Primary Unit only.

Non-Refundable Residential Tap Fees

System Development Fees are collected to cover the costs associated with connecting a property to the water system and contributing to the overall infrastructure necessary to serve new customers. These costs include, but are not limited to, the expenses of installing the physical connection to the water main, a proportionate share of the infrastructure capacity, and funding capital improvements related to growth. Once a tap fee is paid, these actions are initiated to provide service, and the costs associated with them are incurred, regardless of whether the service is ultimately used as initially intended. This policy ensures that growth helps pay for growth and that the costs of expanding water infrastructure are fairly distributed among new customers; it also provides the District with financial stability to plan for future infrastructure improvements and maintenance.

Supplemental Fees

The District may charge supplemental fees for increased water demand on a property or if the status of a property changes after the initial tap fee is issued.

Unauthorized Connections and Unpaid Tap Fees

If the District determines that a property has established or benefited from a water service connection – such as through unapproved service lines, bypasses, or meter tampering - without having paid the full System Development Fee (SDF) or other required tap-related charges, the District may, at its sole discretion, take actions including but not limited to the following:

• Immediate disconnection of service.
• Retroactive billing back to the earliest reasonable date of suspected unauthorized use. If usage cannot be determined, the District may bill based on historical averages for similar properties.
• Retroactive billing for all unpaid SDFs applicable under the District’s current fee schedule.
• Billing for unauthorized connection penalty fees under the District's current fee schedule.
• Removal or correction of the unauthorized connection to meet District standards.

The District reserves the right to pursue civil action for damages and unpaid fees, refer cases to law enforcement when theft or fraud is involved, or file liens on property for unpaid charges as allowed by law.

Review

This policy should be reviewed at a minimum of every three years to ensure it continues to reflect the current cost of capacity. As the District continues to expand its facilities, future changes in technology, demands, development patterns, or other factors may necessitate additional adjustments.