Why the Basement Now Helps Set Your Castle Rock Water Fee

A new single-family home in Castle Rock pays a one-time water and sewer development fee when the builder submits a complete permit application. Until June 30, 2026, a standard home on a ¾-inch meter paid one flat total of $51,890, whatever its size. Starting July 1, 2026, that total depends on the home's gross floor area. It runs from $13,982.34 for a home under 500 square feet to $71,465.27 for one over 10,000 square feet.

The floor area includes the basement, and that shifts the cost of a custom build plan. Two homes with the same above-grade layout can land in fee tiers more than $20,000 apart, depending only on what sits below grade. Anyone weighing a lot purchase or a builder contract in Castle Rock should work this into the plan before the drawings are final.

The Fee Comes From the Floor Plan

The Castle Rock Town Council adopted Ordinance 2026-014 by a 7–0 vote on May 5, 2026, after a first reading on April 21. The ordinance defines gross floor area this way:

"Gross floor area" includes all enclosed and roofed floor space within the building, including basements, mezzanines, and interior circulation areas, but excludes parking garages and areas not enclosed by walls, including open balconies, decks, patios, and similar exterior spaces.

The Castle Rock Water staff report behind the ordinance is more explicit. It says the tiers count "both finished living space and any unfinished basement area that could reasonably be converted to habitable space in the future," so the fee reflects the home's full potential demand on the system. A three-car garage adds nothing to the fee. A covered deck adds nothing. An unfinished basement that could become living space is priced as if it already were.

Where the Schedule Jumps

The tiers mostly run in 500-square-foot steps, but the dollar steps between them vary a lot. Staff found that water use climbs quickly at smaller sizes, levels off in the middle, and rises again for larger homes. Staff chose tiers because a single formula would have overcharged or undercharged parts of that curve. Here are selected tiers from the July 2026 schedule, with each total combining the water system, renewable water and wastewater fees:

Two lines in the schedule matter most. Going from 1,999 to 2,000 square feet adds $12,118.02, the biggest single step on the schedule. Going from 2,499 to 2,500 adds another $8,389.40. Past that point the schedule nearly flattens. Every tier from 2,500 through 4,999 square feet falls between $42,257.72 and $45,364.91, so about 2,500 square feet of extra space adds only $3,107.19 in fees.

The $51,890 tier at 5,500 to 5,999 square feet is the benchmark. Castle Rock Water set one Single Family Equivalent at the 75th percentile of home sizes built in town since 2023. Homes below that size pay proportionally less, and homes above it pay proportionally more.

The Basement Math

Because the basement counts and the schedule moves in uneven steps, the same basement can cost very different amounts depending on the house above it. The examples below are illustrations built from the published tiers, not quotes for any specific permit:

1. A 1,800-square-foot ranch on a slab falls in the 1,500 to 1,999 tier at $21,750.30. Add a 1,800-square-foot basement under the same footprint and the home measures 3,600 square feet, which moves it to $42,879.16. The basement adds $21,128.86 in development fees.
2. A 3,000-square-foot two-story pays $42,568.44 without a basement. Add a 1,600-square-foot basement and the 4,600 total pays $45,364.91. The same kind of basement adds only $2,796.47, because both sizes sit in the flat middle of the schedule.
3. A 5,000-square-foot custom home pays $48,161.38 without a basement. A 1,500-square-foot lower level brings the total to 6,500 square feet and $54,997.19, an increase of $6,835.81.

For a smaller plan, the basement can be the biggest single line in the water fee. For a mid-size plan it barely moves the total. For a large custom home, every added 500 square feet usually adds a few thousand dollars, and the total goes past the old flat fee once the home reaches 6,000 square feet. Builders also still submit plumbing fixture counts with the permit, including any optional or future features available at submittal. Those counts determine the meter size, which leads to the next point.

Which Homes Pay More, and the Meter Caveat

The tiered schedule covers only single-family homes on a standard ¾-inch meter. Homes on any other meter size still pay under the meter-based schedule that took effect January 1, 2026. On that schedule, a 1-inch meter costs $16,585 for water, $59,834 for renewable water and $10,237 for wastewater, a total of $86,656. Meter size comes from fixture-unit and peak-flow calculations, including the highest-flow irrigation zone. We found no published square-footage cutoff that triggers a 1-inch meter. For a large custom home, the fixture schedule and the irrigation design affect the fee as much as the floor area does.

Staff tested the new method on a sample of 750 homes built from 2023 to 2025. Under the new tiers, 554 of them would pay less, 129 would pay more and 67 would see no change. Colorado Politics, reporting on the April 21 first reading, said the new structure lowers fees across all home sizes. The staff report and the adopted tiers show something narrower. Most homes pay less, and homes above the 5,500-to-5,999 benchmark on a ¾-inch meter pay more.

The staff report also leaves room for case-by-case "water efficiency plans." Under these, Castle Rock Water has occasionally worked with developers on extra conservation in home design and landscaping in exchange for lower fees. Any such plan needs its own analysis and approval.

Why Castle Rock Changed It

The change rests on the town's 2022 landscape ordinance, which requires Coloradoscape instead of turf in new front yards and limits irrigated turf in back yards. Castle Rock Water Director Mark Marlowe told the council that homes built under those rules used about 3,000 fewer gallons per month on average. "We finally had the data to study what these new houses look like and what they are really using in terms of water," he said. With most outdoor watering gone, indoor demand tracked home size closely, and the fee was rebuilt around that relationship.

Marlowe said the change will cut system development fee revenue by about 10%, roughly $4 million. Morgan Cullen of the Home Builders Association of Metro Denver supported the change. He estimated that all development-related costs for a new single-family home in Castle Rock exceed $100,000, about 15% of the final price, a figure that covers more than water. Mayor Jason Gray said he hoped the structure would encourage smaller homes and help first-time buyers into the market.

The money supports a long list of renewable water projects. Castle Rock reported its first summer on 100% renewable water in 2025 through the Plum Creek Water Purification Facility. Its planning update lists building the Plum Creek-to-Rueter-Hess Reservoir pipeline among its 2026–2031 priorities, backed by a $1.75 million federal grant. DougCo Social reported in September 2026 that the current five-year budget includes $75.6 million for long-term renewable water projects, and that rates are expected to rise gradually because customer rates and fees fund the work.

After Closing, the Meter Becomes a Monthly Bill

The development fee is paid once, at permit. After that, the home pays ongoing charges. On the 2026 Castle Rock Water rate schedule, a 5/8-by-3/4-inch residential meter carries these fixed monthly charges before any usage: $11.49 for water service, $36.30 for renewable water, $8.65 for wastewater service and $8.79 for stormwater, a total of $65.23. On the same 2026 schedule, water use is billed at $3.39 per 1,000 gallons in Tier 1, $6.91 in Tier 2 during irrigation season and $10.31 in Tier 3. The renewable water charge is the biggest fixed line on the bill, so the renewable supply projects show up every month as well as in the one-time fee.

FAQ

Does a permit filed before July 1, 2026 use the old fee? The ordinance collects the fee when a complete building permit application is submitted and takes effect July 1, 2026. We found no separate grandfathering provision beyond that timing rule. If a filing date is close to the cutoff, confirm it with Castle Rock Water.

Will finishing the basement of an existing home trigger a new fee? The ordinance covers construction of new single-family homes. Castle Rock News-Press reported that these fees are not ongoing charges on existing homeowners. The materials we reviewed don't say whether a later addition or basement finish creates an extra charge.

Does the schedule apply to townhomes? The new tiers apply to one-family and two-family homes as the town code defines them. Multifamily, commercial and industrial buildings stay on the meter-based schedule.

If you're weighing a Castle Rock lot or comparing builder floor plans, Charles Ward can go through the drawings with you. Charles can show which fee tier each version lands in, how the basement and fixture schedule affect the total, and how those costs fit the overall budget, backed by the Custom & Luxury Homes Division at Novella Real Estate. To start, request a complimentary home valuation or a construction consultation.