Post Date:10/05/2023 8:28 AM

by Director of Finance and Administration Zach Cartaya 

Highlands Ranch Water and Sanitation District is working hard to get its proposed 2024 budget ready to release for public review on Oct. 15. The annual budget season is a strange mix of exhaustion, challenges, excitement and frustration as decisions are made that will impact both our operations and our rate payers. While the mixed emotions that come with every budget season are prevalent this year, I believe 2024 is one of the most exciting yet challenging budget cycles I’ve ever encountered.

While some might attribute that sentiment to my newness to Highlands Ranch Water, as I’ve been in my role for only about six months, that’s not the whole story. There has certainly been a learning curve as I joined a new team, but the 2024 budget is the 18th budget cycle in my career across both private and public sectors, and my sixth with a water utility. All that experience has prepared me to take on challenges like the ones Highlands Ranch Water is currently facing.  

In a lot of ways, Highlands Ranch Water’s challenges are not unique: we face strong headwinds from inflation (which has receded slightly, but is still significant in construction materials and becoming resurgent in the price of oil); much of our water treatment infrastructure is approaching the end of its useful life and requires renovation or replacement; the labor market continues to impose challenges to attracting and retaining talent; and we are nearing the end of an historically wet year which drove down demand for outdoor water and had a big impact on our revenue. While we are not entirely unique, there are caveats that make Highlands Ranch Water distinct – and our challenges more complex – when compared to other businesses and water providers.

One thing that makes us stand out is our commitment to excellence. Every day, our staff strives to provide outstanding customer service either through interactions with the public or by ensuring we are providing safe, clean drinking water to all our customers through rigorous monitoring and quality assurance at our treatment plants. For our customers, only the exceptional is acceptable, and we are keenly aware of the fact that rates paid by customers are what allow us to deliver that high level of service. We strive to add value through our rates to ensure our customers continuously receive outstanding services. And through exemplary fiscal discipline, we have weathered many challenges over the years while keeping our rates low.

We have a proud history of maintaining competitive rates, but this is another feature that makes Highlands Ranch Water unique. Unlike other entities, Highlands Ranch Water’s services are almost entirely funded by our rate payers. Nearly every other local water provider is funded by not only rates, but impact fees, mill levies (i.e. property taxes), and development fees. These taxes and fees allow other entities to put aside dedicated funding for their infrastructure and other capital needs. Even with these additional revenue streams, though, our research shows many other water providers, both locally and nationwide, have communicated the need for higher than average rate increases next year to manage these unprecedented economic and environmental circumstances.

And these circumstances are what make this year’s budget cycle the most challenging in my career. Being dependent on rates – with no taxes or mil levies to supplement our budget – leaves Highlands Ranch Water’s leadership the task of balancing the best way to continue our high standards of excellence while working to repair and replace our aging infrastructure, and still providing the most value at a competitive cost. Our team is committed to meeting and overcoming these challenges, but we believe our rate increases may need to be higher this year than they have in the past.

We are still evaluating the size and scope of this potential increase, and we will not make the decision lightly. We will continue to work to find the best path forward for ourselves and our customers. What I can commit to is that we will be transparent in our process. We won’t raise rates any more than we need to, Highlands Ranch Water will continue to be one of the most competitively priced local water providers, and we will continue to earn your trust by providing excellent service at a fair price.

I’ve heard elected officials publicly refer to the budget as a “moral document” that lays out the ethos, values and requirements of an entity. While I understand this sentiment, I don’t fully subscribe to it. I prefer to think of the budget as an agreement between the entity and its stakeholders. With any agreement comes accountability, and the budget is the document that our customers can use to hold us accountable. When the 2024 budget is published for review on Oct. 15, our customers will have the ability to understand (and comment on) the investments we’re making in our infrastructure, our people and our water resources. We look forward to this process and, no matter how challenging, I am excited to find the best way to continue our commitment to excellence and providing value to our customers.