The cost of hooking up new homes to Denver Water’s delivery service will increase for the third straight year as the utility voted Wednesday to raise tap fees for 2007.
Homebuilders will pay roughly 10 percent more to be added to Denver Water’s system, which serves 1.6 million customers in the metro area.
Existing customers don’t pay the System Development Charges, which are better known as “tap fees.”
The one-time fees are generally paid by the builder or developer of a new property to gain water service for a location that previously was without service.
This year, the utility is expected to sell nearly 3,000 new taps for $25 million.
The fees are a way to make growth pay for itself, said David LaFrance, finance director.
“It’s the new customer paying for the capacity they will use,” he said. “This allows the new customer to reimburse existing customers for the cost of hooking onto the system.”
Fees have increased 54 percent since 2002, according to Trina McGuire-Collier, Denver Water spokeswoman.
Costs are going up because the price of developing new water supplies and treating the water also is increasing, LaFrance said.
The increase takes effect Jan. 8 and raises the base charge for a new single-family home in Denver from $1,850 to $2,000.
Homes outside the city will see tap fees increase from $2,600 to $2,800.
Additional charges are added into the fee structure based on the home’s yard size.
For example, the tap fee for a new home on an 8,500-square- foot lot in Denver will increase from $5,165 to $5,655.
Outside the city, the charge on a same-size home will increase from $7,190 to $7,900.
Denver Water boasts of having some of the lowest tap fees in the metro area.
Homebuilders aren’t upset about the increases.
“We understand that they need to raise fees that are justified to serve new development,” said J.J. Martinez, spokeswoman for the Home Builders Association of Metro Denver. “As long as they can demonstrate the fees are fair and that they are covering the expenses of new growth … then we typically won’t oppose the increase.”
Staff writer Jeremy P. Meyer can be reached at 303-954-1367 or jpmeyer@denverpost.com.
