Tap fees cause sticker shock to Steamboat building owners
Residents criticize bill of more than $6,000; city cites water costs
May 11, 2011
Steamboat Springs — Increased tap fees that caused little stir when approved in September drew an outcry from owners of a downtown building when the bill for a new business tenant came this spring.
"I was expecting to be ripped off about $3,000; instead, it was about $6,000, and I am very ticked," said Janet Williams, who has owned the building at 427 Oak St. since the early 1970s with her husband, Dewey. "I think they're trying to run business out of town."
The building will house MountainBrew, the new location for a coffee shop and cafe owned by Al and Tasha Compos. The business formerly was Spill the Beans on 13th Street. The 427 Oak St. location is a green house on the Lincoln Avenue side of Oak Street in downtown Steamboat Springs. The house backs onto the Alpiner Lodge and housed some county offices from 1999 to 2008.
Janet and Dewey Williams said they've paid the city's tap fee of $6,253, also described as a plant investment fee, to help the Composes continue working to open MountainBrew.
City Public Works Director Philo Shelton said the increased fees are necessary to fund expanded capacity for water and wastewater treatment, and to secure the city's future water supply.
"We have to have a way to collect some money to allow for expansion and rehabilitation of these plants," Shelton said. "I imagine there's a bit of sticker shock, so to speak, from the increases people might have been accustomed to in the past."
The 427 Oak St. bill is one of the first tangible outcomes of increased water rates, wastewater rates and tap fees that the Steamboat Springs City Council approved in September, to fund as much as $70 million in water-related improvement and repair projects the city could face in coming years.
The rate and fee increases were implemented in January.
The Steamboat Springs City Council gave initial approval May 3 to an $11.9 million loan, through bonds issued by the Colorado Water Resources and Power Development Authority, to fund infrastructure projects during the next two to three years. Summer work includes an extensive replacement of a century-old sewer line and addition of a new storm sewer in the alley between Oak Street and Lincoln Avenue, from 10th Street to Fourth Street.
City Manager Jon Roberts said he "was a bit surprised by the amount" of the 427 Oak St. bill and asked Shelton and utilities engineer Jon Snyder to double-check their calculations.
Shelton said the figure is correct. Tap fees are calculated through a complex process involving the number of fixtures in a remodel or new project, water use and other factors.
"When these remodels come in, they count every fixture that's in the permit," Shelton said. "The plant investment fee is a dollar amount per fixture point."
He said a commercial sink, for example, has more fixture costs than a hand sink in a home.
"It varies on which project is being done," Shelton said about tap fee amounts. "The fixture fees have gone up this year, essentially about doubled from before.
"The largest piece for (MountainBrew) was the restaurant seats," he continued. "That was the biggest change in use that added to the plant investment fee."
The water bill increases are on top of 50 percent rate increases that took effect in 2009.
Those increases were put in place after city officials acknowledged in November 2008 that the water and wastewater funds had dipped dangerously low. Reasons for the low funds included the city's failure to increase water rates in the previous 15 years, as well as the habit of using tap fees that should have gone toward capital reserves to instead subsidize the city's operating budget.
Shelton said a portion of tap fees also help the city secure and enhance its water rights.
"That's the portion of the plant investment fee that went up the most," he said.
The city is incurring legal, accounting and construction costs, for example, for a plan to release additional water from Stagecoach Reservoir into a municipal well on the city's south side.
"Right now, we have water sitting in Stagecoach that we can't use until we implement this plan," Shelton said.
He said the city also is paying $175,000 to the Mount Werner Water and Sanitation District this year for a recent expansion of Fish Creek Reservoir.
"Our plant investment fee would go toward that purpose," Shelton said.
Roberts said although tap fees might seem steep, a future shortage of water could be much more detrimental to local economic development than increased bills.
"I think the issue of protecting the long-term water rights of the city of Steamboat is a critical consideration," he said.
The city has a total of about 100 water rights from flows on creeks, small hot springs, Yampa River tributaries and more, according to Boulder-based water counsel Fritz Holleman.
Those uses could provide little solace to Dewey and Janet Williams, though, who said the heavy bill increases could cripple local businesses and new development.
"The town can't survive on this kind of stuff," Dewey said about their bill.
Janet said other local property owners should be aware of potential renovation or construction costs from the tap fee increases.
"I may not get a dime back, but other people ought to know what they're facing," she said.
— To reach Mike Lawrence, call 970-871-4233 or email mlawrence@SteamboatToday.com