Proposed water rate increase for Central City

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Work Session floats rate increase to Council for approval

By David Josselyn

  The Central City Council met for a work session on Tuesday, September 17th with only one item on the agenda: water rates.

Rating our water

  Utilities Superintendent Shawn Griffith introduced Will Raatz, Project Manager of JVA Consulting Engineers, to talk about the proposed water rate structure. Raatz summarized the issue saying that the existing rate structure is not collecting enough revenue to cover basic expenses. Expenses above the water budget have been paid by the general fund. Alderman Heider inquired whether the water fund would need to pay back the amounts sluiced off the other account, but City Manager Alan Lanning said that would not be necessary. “What’s done is done,” he said, like water under the bridge. Lanning added that “this study is what it would take to get the water fund solvent.” Alderman Bob Spain wanted to know what the average use is per residential home, but was put off by Raatz to address later. There are two main concerns compelling a rate increase that Raatz brought to the council.

  The first concern is that the water system is sized to provide water at a much higher usage rate than is currently needed, so the system itself is costing more than the current revenues. When the water system was originally fabricated, the expected number of businesses to utilize the system was about 60. Today, Central City has about 27 active business taps as confirmed by Griffith. The system use for 2012 was about 38 million gallons, but the system was built to handle 150 million gallons; therefore, there is a good part of the system without revenue to support it. “The capacity of the treatment plant is much greater than the amount we’re currently using,” stated Griffith.

  The second concern is that the infrastructure is fairly old, about 50 years, which is about the age parts start needing to be replaced. The main water line for Lawrence Street is currently being replaced as it shows signs of imminent rupture. Just this year, there have been several leaks in the infrastructure causing some residents water bills to inflate by more than 300%. Shawn Griffith personally went to six people in town with that issue and once the problem was identified, their bills were adjusted.

  The proposed rate structure would encourage conservation of water and start to build revenue reserves for pending repairs and replacements, and also will replenish the general fund.

How this could affect you

  As a resident, the average use for Central citizens is 4,000 gallons per month. Your water bill would increase about 13.4 percent. As a senior resident, the discount for your base rate remains the same (20%), but your usage rates are not discounted, so your water bill would increase about 16.4 percent. In actual dollars, for a 4,000 gallon usage you would pay $73.50 as a resident or $61.50 as a senior resident. These numbers are based on the size of your water line tap into the main line and a ¾” tap is assumed. More than 200 residents have a ¾” tap on their line. As the size increases, so does the base rate. Alderman Heider asked Mr. Griffith how residents know the size of their tap and Griffith answered that the city has records for every lot, but it is not printed on their water bills.

  As a business, the average use is 7,000 gallons with a ¾” tap. Your water bill would increase about 90 percent. In actual dollars, for a 7,000 gallon usage you would pay $114. Almost 40 of our businesses use about 7,000 gallons per month.

  The proposed rate structures for both residential and commercial are a tiered system. This means that the base rate increases based on tap size and the usage rate increases as you enter the next tier. The entire usage is not charged at the new rate, but rather only the amount of usage that entered the tier. For example, a resident using 4,000 gallons would be charged three dollars for each thousand gallons up to 3,000, and then would be charged four dollars and fifty cents for the thousand gallons above the first 3,000. This pricing structure is similar to other municipalities in Colorado.

  The 2013 budget for water is about $150,000 and the current pricing structure brings in considerably less than the budgeted about. The proposed rates would potentially bring in about $170,000, producing about $20,000 annually for infrastructure upgrades. “Whether you use water or not, somebody’s got to pay for the infrastructure,” stated Alderman Voorhies. There is a special meeting to discuss the water fund scheduled for Thursday, September 26th.

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