Enterprise Funds Major Revenues

Water Fund Revenues

Water Sales Revenues: The City water customers are divided into commercial and residential classification with additional designation of accounts inside City limits and those outside. All accounts are metered, and water meters are read by the Finance Department each month for billing (Utility bills include Water, Sewer, Trash & Recycle, Spring and Fall Cleanup and Sustainability fees). Water rates are set by Council and have been guided by rate evaluations conducted every five years. The last study was conducted in 2019 by Raftelis Financial Consultants and that study was partially implemented for 2020 adjusting base rates for both in-city and extraterritorial users, but in that year no other rate amendments were included; for 2021 no additional rate amendments for water were implemented. For 2023 staff forecast stable water consumption, with population growth maintaining a balance with conservation efforts.

Water Plant Investment Fees and Development Contribution Revenue: Plant investment fees are development fees that are paid for new commercial or residential units connecting into the City’s water system. These fees are collected on building permits issued in the community development department. The value of Plant Investment Fees collected annually is directly linked to the number and type of building permits issued assessed the rates in affect that year. These revenues can be volatile as a single large development, can have a significant impact on the annual receipts. The forecast anticipates relatively flat revenues for Plant Investment Fee collections going into 2023. This is due to a moderate increase in development activity projected for the year coupled with an inflationary adjustment to the Fee rate to be charged in 2023.

Sewer Fund Revenues

Sewer Treatment Revenue: Wastewater customers are divided between residential and commercial, in-city and extraterritorial for rate classification. The residential rate is based on the quantity of water used by a residential customer during January, February and March as an indicator of in-home use, applied for the next full year beginning in April bill (received May). Commercial wastewater rates are based on their water use on a monthly basis. Monthly invoices are issued by the Finance Department. Rates are set by Council and guided by rate analysis. Raftelis Financial Consultants completed the last rate study in 2019 for demands from 2020 through 2025 and prescribed a 3% increase in sewer revenue annually. Due to pandemic concerns, a zero-percent increase was incorporated in 2021 and a return to 3% annual adjustment is recommended to maintain operations and bond covenants in affect for the fund.

Sewer Plant Investment Fees and Development Contribution Revenue: Plant investment fees are development fees that are paid for new commercial or residential units connecting into the city’s sewer system. These fees are collected on building permits issued in the community development department. The value of Plant Investment Fees collected annually is directly linked to the number and type of building permits issued assessed the rates in affect that year. These revenues can be volatile as a single large development can have a significant impact on the annual receipts. The forecast anticipates relatively flat revenues for Plant Investment Fee collections going into 2023. This is due to a moderate increase in development activity projected for the year coupled with an inflationary adjustment to the Fee rate to be charged in 2023.

Airport Fund Revenues

Parking Fee Revenue: The Airport receives revenue from both long-term and short-term parking at the airport. Parking Revenues have increased due to an increase in activity at the airport. These are collected daily at the airport and processed through the Finance Department. Forecasts for this revenue are based on the continued use and expected growth of passenger traffic at the airport. Enplanements on the existing airlines continue to increase. At the end of 2014, the Airport invested in new automated parking equipment and began self-collecting parking revenue instead of contracting parking management to a third party. With this change, the Airport experienced a large increase in the revenue as there are no fees going to the third party. Airport parking continues to increase moderately with the growth of enplanements.

Rental Car Concession Fees: The Airport receives revenue from concession agreements at the airport for rental car agencies. These are collected monthly by the Finance Department. Forecasts for this revenue are based on demand trends and the continued growth of passenger traffic at the airport. A new concession agreement was negotiated and implemented in November of 2019, resulting in an increase of these revenues. This agreement will remain in place for a 5-year term.

Trash and Recycle Fund Revenues

Refuse & Recycling Collections Revenue: Refuse and recycling collection charges are placed on the same invoice as the water, sewer and sustainability charges. By ordinance, residents within the Durango city limits are required to pay for trash and recycling service provided by the City of Durango. Refuse collection for businesses within the city can contract with the City or a private hauler. Monthly invoices are issued by the Finance Department. In 2009, the City of Durango increased its marketing effort to potential commercial clients. These efforts resulted in additional customers and increased revenues. A $3 single stream recycling fee was instituted in 2013.

Transportation Fund Revenues

Parking Meter Revenue: The City collects parking revenue from just under 1,000 parking meters located throughout the Central Business District. The fee per hour at a parking meter is based on the demand for that area and ranges from $.50 to $1.00 per hour. Parking meter revenue fluctuates based on tourist use. The parking staff collects the coins from the meters weekly and delivers them to the city’s bank of record. Credit card payments are transferred from the merchant account on a daily basis. Revenue for parking meters fluctuates with tourist activity and the local economy. Increasing hourly rates to accommodate the charges for credit cards has increased the gross revenue over the last few years.

Parking Fines Revenues: The City collects parking fines within the city limits, based on parking violations of the Municipal Code, such as expired meters or improper use of a handicapped space. The Parking Division has the primary responsibility to enforce the Parking Code. Citation fees vary based on the severity of a violation. Fines are collected at city cashier locations, the city website and at various drop box locations throughout the city. Parking fines were increased in 2017 based on a survey of like communities. The change resulted in increased meter compliance and decreased violations.

FTA Grant Revenues: The Federal Transit Administration awards operating and capital grants. The City of Durango has been awarded these grants for the last 10 years. Expanded transit operations are ongoing because of the level of support from the FTA. The forecast for this revenue is based solely on grant applications and awards. This includes additional monies for CARES act funding.