Aspen borrowing for its Castle Creek water treatment plant

Borrowing under City of Aspen Ballot Issue 2A could be repaid only from the city's water utility revenue. The question allows up to $100 million in revenue bonds or another multiple-fiscal-year financial obligation, "PAYABLE SOLELY FROM THE WATER ACTIVITY ENTERPRISE REVENUE," to expand, renovate, improve, remodel and equip the water treatment facility, with terms and interest rates approved by the City Council. The question caps total repayment at $255 million and sets no repayment period. Its first words are "WITHOUT INCREASING ANY TAXES." It would also let the city collect, keep and spend the revenue and interest from the obligations as a voter-approved revenue change under Colorado law or any other law.

Resolution 101 says that if voters approve, the city intends to issue bonds of about $100 million to pay the project's costs, "including the reimbursement of certain costs incurred by the City prior to the execution and delivery of such bonds." The council adopted the resolution on August 11 on its consent calendar, 4 to 0, with Councilor Doyle absent.

The plant serves more than 4,100 accounts and produces 1.1 billion to 1.7 billion gallons of water a year, city utilities staff report. It was built in 1965 and expanded in 1986. Staff describe most of its equipment as "nearly 40+ years old," and the filtration media, replaced more than 15 years ago, is scheduled for replacement.

The Aspen Daily News reported in July that the project would add operator safety equipment, consolidate the plant's bleach and fluoride systems, and address state health department sizing requirements for the pretreatment process and the backwash pond. The paper reported that the pretreatment process meets all required treatment parameters but is outdated, and that city staff anticipate state discharge permit rules becoming more stringent within three to five years.

Staff call the work "a critical project and a necessary expense to continue to produce and distribute water that is safe for human consumption." They wrote that "a ballot measure seeking voter approval to bond finance the project is necessary to complete the project." The alternative to the project that their August report names is to run the equipment and filter media "to a failure point" and buy replacements through emergency procurement.

In August 2025, the Daily News reported an estimate of about $77.4 million for work between 2027 and 2030, and a plan to ask voters for an $85 million bond. The design reached 90% in February 2026, and in May the city's construction manager, Haskell, submitted a draft guaranteed maximum price. Staff's July 13 report put Haskell's contract and the engineer Garver's construction-phase services at $92,480,190.05, added an owner contingency of 8%, and recommended a project budget of up to $100 million for a schedule running from September 2026 to June 2029. Staff wrote that they were still negotiating toward a final guaranteed maximum price.

The council hired the design and construction team by resolutions in 2024 and 2025 and approved construction services for an early work package earlier in 2026. The Daily News reported in May that Haskell had started on drains, pumps and variable-frequency drives.

At an August 2025 work session, the Daily News reported, the council weighed a 40% water rate increase in 2026 with no bond and a 25% increase paired with a $32 million bond. It asked staff to proceed with a 15% increase in 2026 alongside a bond. The council adopted the 15% increase by Ordinance 13 of 2025. The Aspen Times reported in October 2025 that, under staff's proposal, a typical gravity-fed residential bill would rise from $74.37 to $85.53 a month.

Staff's July and August reports say the council also "supported future out-year rate increases of 10% in 2027 and 2028." The August report adds that staff's projected rate plan supports the treatment plant project's budget and the bond repayment cost while funding the water utility's other capital and operating expenses. Staff wrote that they would confirm that plan at the council's October 2026 budget sessions.

Resolution 101 gives the council's reason for borrowing: it lets the city finish the project "in a timely manner, while reducing the long-term financial risks associated with inflation, construction cost escalation, and extended phased construction."

The city's 2026 Budget in Brief reports $42.4 million of outstanding principal as of January 1, 2026, mostly for parks and open space purchases, a police department building and a new City Hall, with $3.65 million in principal and interest due in 2026.