Denver Water tightening its financial belt

Denver Water, the state’s oldest and largest water provider, is preparing for drought and tightening its financial belt as the winter snowpack in its collection area remains mired at record-low levels. 

The utility, which relies on rates paid by customers for the water they use for much of its annual budget, has slowed hiring, slashed its paid summer internship program, and is deferring or delaying equipment purchases, maintenance projects and contracted services. 

“All of us are hoping to see more snow in the mountains in the weeks and months ahead, and while we hope, we also are making strategic decisions to prepare us — and our customers — for the possibility that these record-dry conditions in the mountains will continue in the months ahead and possibly into next winter,” said Angela Bricmont, Denver Water’s chief financial officer.

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Denver Water does not receive tax dollars or operate for profit. Revenue from customer water bills is reinvested in maintaining and improving the water system. Because customers already use water efficiently, additional drought-related conservation would reduce water use and, in turn, lower water rate revenue that can be invested back into the system.

Denver Water relies on water from mountain snowpack for 90% of its water supply. The water is captured during the spring runoff and stored in reservoirs. Reservoir levels are drawn down as the 1.5 million people the utility serves use the water over summer, fall, winter, and spring, and replenished by the following year’s spring runoff. 

This year, snowpack in Denver Water’s collection areas has been well below normal for months. If the situation doesn’t improve dramatically in the next few months, it is likely that customers will be asked to save more water to preserve water levels during drought conditions.

Check out this TAP story for weekly updates on the snowpack and water supply situation through the winter and spring. 

While Denver Water always has annual summer watering rules in place during the summer, Denver Water staff are monitoring snowpack conditions, weather forecasts and customer water use as they consider what drought response recommendation they will provide to the Board of Water Commissioners in the coming weeks, should conditions not improve.

For its part, Denver Water has been and will continue to seek short-term cost reductions and long-term efficiencies. 

Some of these steps include: 

• Not filling vacant positions for 60 days. This provides immediate cost savings while the utility continues to monitor the water supply situation.
• Reducing the utility’s paid summer internship program, which provides valuable connections and experience for the next generation of water leaders, from 25 positions to one.
• Reducing employee training and professional development opportunities. 
• Reducing spending with outside companies for services that are provided. 
• Deferring noncritical IT projects and upgrades that don’t affect water quality or safety.
• Deferring some routine maintenance at operational facilities and planning and modeling activities related to watershed health.
• Reducing purchases of materials and equipment. 

Clean, safe water 

While cuts and efficiencies are being implemented, Denver Water’s main mission — to provide safe, clean drinking water to its customers — continues. 

The utility’s groundbreaking Lead Reduction Program will continue to replace lead service lines and provide water filters to customers in the program. Work to raise Gross Dam, a project designed to nearly triple the reservoir’s capacity to store water, is continuing. 

The utility will also continue its work to repair, replace and maintain water mains and other infrastructure that are crucial to collecting, cleaning and delivering water. 

Customers can do their part by making water-efficient upgrades, inside and outside, including remodeling their yards to replace water-thirsty turfgrass with low-water ColoradoScapes. These steps preserve water supplies and create more adaptable and drought-resilient landscapes that fit naturally into our climate.

“Drought is a natural part of living in this semi-arid climate, and we’ve seen droughts come and go, affecting Denver Water, our communities and neighbors across the state many times over our decades of service,” Bricmont said.

“Working together, I know we will rise to this latest challenge as needed.”