Water Rate Study Discussion
Background
In May 2025, the Town of Frisco engaged Raftelis Financial Consultants, Inc. to complete a comprehensive Water Rate and Connection Fee Study. The last full water study for the Town of Frisco was adopted in 2019 and established new rates and a tiered structure through October 2024, which increased water rates by 5% annually. To bridge the gap from October 2024 until the new study was completed, water rates continued to increase 5% per year.
Current Conditions
- 34 miles of water mains – roughly the distance between Frisco and Avon
- 4,700 water customers: 2,155 active water accounts holding 4,668 EQR’s
- 350 fire hydrants
- Three (3) storage tanks
- $30 million estimated replacement value of water infrastructure (excluding water rights)
- One (1) million gallons per day (MGD) delivered from three (3) wells and a surface water treatment plant – enough to fill 2.5 football fields, one foot deep, daily
- Water utility owns and maintains all water mains, hydrants and main line valves
- Water customers own and maintain all service lines and curbstop valves from the tap at the water main to the interior of the building
Frisco’s current water rate structure is:
Customers pay a quarterly base rate of $57.43 per Equivalent Residential Unit (EQR) plus tiered usage charges designed to promote conservation:
Tier Water Use (per EQR) Rate per 1,000 Gallons
- Tier 1 1–8,000 gallons $1.44
- Tier 2 8,001–16,000 gallons $2.86
- Tier 3 16,001–50,000 gallons $5.10
- Tier 4 Over 50,000 gallons $6.38
Future Water Projects
The 10-year maintenance and improvement plan for the Frisco water system includes $29,916,429 in anticipated improvement and maintenance needs. This includes well and water tank maintenance and rehab, hydrant replacements, water main replacements, a new well, new treatment equipment, and general water division equipment needs, such as vehicles.
Study Goals and November 11 Presentation
Raftelis presented the study’s goals and methods to Town Council at a work session on August 12, 2025. Those study goals included:
- Ensure revenues cover annual operating costs, debt service, and capital investments.
- Plan proactively for maintenance and replacement to prevent costly emergency repairs.
- Maintain healthy reserves and meet debt service coverage targets.
- Promote fairness among customer types- residential, commercial, and irrigation.
- Encourage conservation through a tiered rate structure that rewards efficient water use.
- Evaluate connection (tap) fees so that new growth pays its fair share of system costs.
During the November 11, 2025 work session, Raftelis Financial Consultants presented the key components of the ongoing Water Rate and Connection Fee Study, which included:
- Peer Utility Survey: The Peer Utility Study compares Frisco’s current residential water rates and average quarterly bills to those of similarly situated mountain communities in Colorado such as Silverthorne, Breckenridge, Dillon, and the Snake River Water District, to evaluate competitiveness and equity in pricing. Currently a typical quarterly residential water bill in Frisco is $80.39, the second lowest price in Summit County. A breakdown of Town water bills can be found in the staff report.
- Review of the 10-Year Financial Plan for the Water Fund: The 10-Year Plan identified upcoming capital improvement projects based on the Town’s recent water system age and condition assessment. Investing steadily in maintenance and upgrades helps avoid large emergency expenses, stabilizes future rates, and ensures the Town can continue providing reliable, and high-quality service. Staff and consultants also reviewed debt financing options within the Water Fund which included potential funding approaches, such as a balanced use of rate revenue, reserves and debt financing, to sustain system performance while minimizing customer rate impacts.
Council Discussion
The plan considers two potential funding approaches for discussion, which were described in greater detail in the presentation:
- Pay-as-you-go, which avoids debt but can result in larger short-term rate increases.
- Debt financing (specifically Well 8 in 2033), which smooths out costs and helps stabilize rates over time.
The exact impact on customer rates will depend on the rate structure Council selects. Feedback from this work session will help Raftelis and staff develop rate adjustment scenarios for Council.
Council gave staff direction to return during the December 9 meeting with a scenario that does not include financing and would potentially be an 8.5% increase in water rates from 2026-2030 and then a 5% increase each year from 2031 to 2035.
Graywater Opt-Out Discussion
In May 2024, Governor Jared Polis signed into law House Bill 24-1362, Measures to Incentivize Graywater Use. The legislation, effective January 1, 2026, authorizes the installation and use of graywater treatment systems in new construction projects, unless a county or municipality determines that the use of such systems is not authorized within its jurisdiction. Prior to this law, jurisdictions had to establish individual graywater programs under State Regulation 86, resulting in inconsistent and limited participation.
“Graywater” is defined as wastewater from showers, bathtubs, bathroom sinks, and laundry (excluding toilets, dishwashers, and utility sinks) that can be reused for purposes such as irrigation or toilet flushing. Under the legislation, local governments retain control through the option to opt out of the program by adopting an ordinance or resolution.
Adopting HB 24-1362 would require the Town to develop a formal graywater program, amend building and development codes, document system installations, track annual inspections, and ensure compliance with State and local plumbing standards. These responsibilities would increase staff workload and create ongoing administrative costs.
Although modest utility savings could occur from reduced pumping and chemical use, meaningful system-wide benefits would require large-scale adoption. Given anticipated low participation and the significant staff time needed for program administration, the cost-benefit ratio for Frisco appears unfavorable.
Council Decision
While HB 24-1362 advances the State’s water conservation goals, staff recommends that the Town of Frisco opt out of participation as outlined in Ordinance 25-24. Implementing and enforcing graywater system standards would place new administrative, technical, and inspection demands on limited staff resources. The program also presents potential public health and cross-connection risks requiring specialized oversight. Given Frisco’s size, staffing, and existing water utility structure, the anticipated local benefits do not justify the associated costs.
Council discussed the potential risks around contamination, the larger workload for planning and building staff and for staff who would be responsible for post construction inspections, and considerations around water rights, which require the Town to return 90% of the water utilized downstream.
Council also had questions about how much rainwater could be collected at a residence. Homeowners can have up to two rain barrels with a combined storage of 110 gallons or less, which must have sealable lids and be used only for outdoor, non-potable purposes like watering plants.
Council adopted Ordinance 25-24 on the first reading. The second reading is scheduled for December 9, 2025.
Community Development 2026 Action Plan
During the November 11, 2025 work session, Community Development Department staff provided an overview of priorities for each division in 2026. The action items identified have been developed off the recently approved Strategic Housing Plan, Comprehensive Plan, and Climate Action and Resiliency Plan (“CARP”). Each of the plans were developed through utilizing a collaborative process involving extensive data collection, community engagement and expert analysis. Staff analyzed the list of priorities as outlined in the plans and recommended action items based on such priorities and budget limitations.
Action Items
Quarter One 2026
- Initiate Request for Proposal (“RFP”) for a firm to conduct a nexus study to provide for the potential implementation of inclusionary zoning.
- Discuss University Technical Assistance Program (“UTAP”) program with Town Council and seek direction to apply for assistance with 8th and Pitkin site.
- Coordinate with contracted building division to ensure 2024 International Energy Code updates are analyzed and implemented by June 30, 2026.
- Create a preferred business list in alignment with Town purchasing and the procurement policy to promote sustainable consuming.
- Complete the Pioneer Park design process which began in fall 2025 and assist Public Works with ensuring the project is ready for construction based on final design plans and direction from Town Council.
- Make formal application for Dark Sky Certification.
- Continue facilitating discussions with Xcel Energy on the Frisco Thermal Energy Network (“TEN”) pilot program.
- Assist Department of Local Affairs (“DOLA”) Neighborhood Centers Pilot Program.
- Town Code Analysis, Chapter 180, Unified Development Code (UDC).
- Implementing streamlined application processes where applicable.
- Suggest modifications to the Accessory Dwelling regulations.
- Update the current outdoor lighting regulations.
- Update landscaping regulations.
- Suggest modifications to the Table of Uses with regards to drive-through establishments.
- Suggest modifications to the Table of Uses with regards to affordable housing units being permitted on the second level or above of commercial and/or light industrial buildings.
Quarter Two 2026
- If supported by Town Council in Q1, apply to UTAP to receive assistance on leading, designing and holding a charette for the 8th and Pitkin site.
- Coordinate HC3 workshops to provide community information regarding compost programs; including yard waste.
- Design a Town Heat Pump Incentive Program.
- Implementing sustainability recommendations from the CARP in Town owned buildings.
- Establish a small stakeholder group consisting of community members to discuss incentives to incorporate into the UDC to encourage the protection of historic structures.
Quarter Three 2026
- Begin discussions on parking requirements.
- Host charette for design strategies for the 8th and Pitkin lot.
- Initiate discussions regarding utilizing future 5A funds to be used towards water and sanitation tap fees for applicants applying for affordable housing.
- Update Three-Mile Plan.
- Analyze the 2023 Frisco Trails and Pathways Plan and take the lead to determine what the Town should be prioritizing as outlined in this plan.
- Initiate planning and design for the Year-Round Cycling Infrastructure and Engagement Initiative.
- Suggest modifications to phase out all wood, charcoal, and gas burning stoves.
Quarter Four 2026
- Draft outline for a program to encourage sustained building efficiency through retro commissioning commercial buildings.
- Begin seeking financing opportunities to plan for developing designs for a canopy/parking area photovoltaic system to be installed at a Town site.
- Begin discussions with Town Council to determine if there is support for Community Improvement Districts.
- Update the UDC to align with recommended uses and character designated in the Future Land Use classifications and association map (FLUM).
- Initiate discussions to modify the Non-Residential and Residential Design Standards in the Unified Development Code.
Council Discussion
Council had questions about preferred vendors selected through a sustainability lens. Some Councilmembers had concerns about potential overreach and emphasizing support of local businesses. Staff reiterated that Town Council would consider and discuss any potential policy during a work session. Council also had questions around historic preservation, and staff again reiterated that this discussion will come to Town Council. Council also encouraged staff to look at solar arrays, rather than just solar canopies.
Out of Frisco Boundary Water Service Request
In 2023, Ordinance 23-05 was approved, which modified Chapter 171 of the Town code by adding an application process for out-of-town boundaries water service/taps. This process requires prospective water users outside the Town of Frisco to submit a written application, dedicate water rights or pay a fee in lieu of water rights, submit a written will-serve letter from Frisco Sanitation District, and other conditions per the ordinance. Town Council may then deny or grant the request with conditions based on the “best interest of Town residents”. In addition, the ordinance states that the Council will consider whether the request will result in detrimental secondary impacts to Town or its residents.
On October 20, 2025, the owner of 254 Alpine Drive, submitted an extra-territorial water application for the property. The application is for one EQR; an EQR is the typical amount of water resources used by a typical single-family residence.
Review of this request has determined that the request is consistent with the provisions of Ordinance 23-05 and does not present any conflicts with existing Town policies or water service obligations. The Town’s current water supply and rights portfolio are sufficient to accommodate the proposed service without adverse impact to in-town customers. Additionally, the proposed agreement includes the standard terms and conditions for extraterritorial water service, ensuring consistency, equity, and enforceability
The applicant elected to pay in-lieu fees in place of dedicating water rights. All costs of construction and maintenance of the service line and any other required infrastructure will be the responsibility of the property owner The current property has one existing single-family home that is already connected as a Town of Frisco, extra-territorial, water customer, and the property owner is looking to subdivide the lot. At this time, there are no building plans submitted for any development, and the owner is looking to secure an Extra-Territorial Water Service Agreement for authorization from Summit County Government to subdivide the lot for future development.
Council Decision
Town Council approved the extra-territorial water service agreement for the residence located 254 Alpine Drive.
Development Agreement for 101 West Main Street
The Town of Frisco has been working with the NHP Foundation (NHPF) since early 2023 when staff from NHPF approached Town staff and Council on affordable housing opportunities in Frisco. The mission of NHPF is to “preserve and create sustainable, service-enriched multifamily housing that is affordable to low- and moderate-income families and seniors, and beneficial to their communities.” This mission aligns with the Council’s strategic plan to support a thriving economy by increasing workforce housing and enhancing community inclusivity by offering a variety of housing types to support year-round residents.
The Town is currently working with NHPF on two affordable housing projects, located at 101 West Main Street and 602 Galena Street. Recognizing the strong need for all housing types and rental rates within Frisco, the Town has focused on ensuring that the two projects provide a range of affordable housing options to the community. The 101 West Main Street project is projected to move forward in 2026 with 52 rental units at an income range of 30%, 50%, and 80% of the Summit County Area Median Income.
Development Agreement Amendment
The proposed amendment to the previously approved Development Agreement between the Town of Frisco and NHPF West Main LLC, for the affordable housing project located at 101 West Main Street, includes:
- The current unit mix table located at Section 2.01 will now reflect the finalized and approved unit size and income level count.
- All references to the LIHTC award will now reference the awarded 9% rather than the previous 4% assumption.
- The timelines set for construction and completion have been updated to reflect timelines established by the LIHTC award. The agreement previously stated construction would commence, “on the earlier of (i) 180 days following the award of LIHTC by CHFA… or 540 days from the Effective Date” of the Development Agreement. That language has been removed.
Council Decision
Council approved Ordinance 25-21 on the second reading.
Energy Performance Contract
In June 2023, the Town entered into an agreement with McKinstry to complete an Investment Grade Audit (IGA), which identified a portfolio of cost-effective energy efficiency and renewable energy upgrades. On July 22, 2025 Town Council approved a contract with McKinstry to perform energy improvements identified through the State of Colorado’s Energy Performance Contracting (EPC) program. EPCs allow local governments to fund energy projects with minimal upfront costs by using guaranteed energy savings to repay financing obligations.
The Town is considering this ordinance in order to enter into a Lease Purchase Agreement and accompanying Federal Tax Certificate to finance energy efficiency improvements across Town-owned facilities. The total project cost is $2,431,000, which consist of:
- $1,512,000 in awarded grants
- $31,046 in anticipated equipment rebates
- $208,369 in federal tax credits
- $295,000 in direct Town contribution (to be paid from the Capital Fund)
- $649,000 in financed amount (Lease Purchase Agreement)
The financing supports energy improvements that are projected to generate $739,399 in total savings over the term of the financing. These savings will be utilized to repay the debt obligation, minimizing long-term financial impact to the Town.
The proposed improvements in the EPC include:
- LED lighting retrofits
- Solar photovoltaic installations
- Electric vehicle changing infrastructure
- Energy-efficient HVAC systems and controls
Council Decision
Council approved Ordinance 25-23 on the second reading.
Frisco Town Council Meetings: Ways to Participate
Frisco Town Council meetings are available to view via Civic Plus Resident Portal, Zoom and YouTube, and are also held in person to make Town Council meetings easier to access for everyone.
The public can provide comment during meetings via Zoom or in person (not YouTube), and a public comment period will be available at 7:00pm; during the consideration of ordinances; and at the discretion of Town Council during work session items, which are discussions that don’t require a formal vote by Town Council and do not require public comment. Again, this hybrid approach is intended to make Town Council meetings more accessible, and meeting recordings will typically also be made available the day after a meeting in the meeting archive with agenda topics bookmarked to the discussions in the video.