Steamboat Pilot & Today

Steamboat Springs — At its most basic, it is microorganisms working feverishly to break down sewage before it travels down the Yampa River to Hayden. At the human level, it is the most recent saga in an ongoing struggle between the city and Mount Werner Water and Sanitation over the most coveted resource in the West. Either way, wastewater treatment is a messy process a process that few of the people involved in recent disputes are willing to talk about on the record.

The city and Mount Werner Water are at it again after recent conversations about cooperating on an expansion of the city's wastewater treatment plant fell apart. While that breakup may not affect local water bills in the upcoming future, it does put the city in an $11 million hole that not everyone thinks will be easy to climb out of.

A little more than a year ago, the city had reached its wastewater treatment capacity based on estimates of waste production from new construction projects, said Jim Weber, the city's public works director. The state mandated that the city start planning its expansion when the plant reached 80 percent capacity. Discussions involving the city, Mount Werner Water and Steamboat II about expanding the plant have gone on for four years. And actual construction began just this past September. The Mount Werner district roughly encompasses the area east and south of Fish Creek Falls Road.

The city, after attempting to negotiate a deal with Mount Werner Water to share the cost of expanding the plant by 1.6 million gallons per day, abruptly broke off talks on Jan. 19 and decided to go ahead without the water district. And, despite renewed efforts by Mount Werner Water to renegotiate the deal, City Council members say there's nothing more to talk about.

In1996, the two water departments started discussing how to merge their operations and become one entity. They actually did for while, operating as Steamboat Water, but then that truce fell apart in 1999.

The latest breakup is just one more night on the couch in what has been a loveless, arranged marriage.

After discussing Mount Werner's most recent proposal to amend the plant expansion agreement, City Council decided it would rather go ahead on its own swallowing an $11 million debt in the process.

City Manager Paul Hughes said the break will have no impact on the residents of the city in terms of their water bills, though tap fees may need to increase to meet the cost of the expansion. The city is undergoing a rate study to determine if tap fees will need to go up, Weber, the public works chief, said.

The city plans to apply for a low-interest loan from the state to pay for the expansion. It will have to go into debt to finance the project, though it does not need to go to the voters to approve the bond, because wastewater treatment costs are categorized in an enterprise fund, not the city's sales tax-based general fund. Under state law, enterprise funds are seen as business activities that ostensibly can pay for themselves.

ON ITS OWN
As planned, all the debt, in the spirit of self-financing, will be paid back by the tap fees the city charges to hook homes up to water and wastewater facilities.

Tap fees, however, are a somewhat unstable source of funding, because they are only assessed when a project is first built, noted Joe Brennan, a member of the Mount Werner Water board. In that sense, meeting the cost of expansion will depend entirely on new development. City Councilman Ken Brenner said he thinks that system, actually, is the most equitable solution in terms of financing the plant.

"The consumer will pay the actual cost of providing the service," Brenner said. "We think it represents the fairest and best system for the consumers in the city of Steamboat Springs."

If the deal had worked out, as some on the Mount Werner board think it still can, the city would have shared the cost of expanding the plant with the district, drastically reducing its debt load. The first draft of the agreement had the city paying for 55 percent of the expansion, with Mount Werner Water paying for 40 percent and Steamboat II handling 5 percent. Steamboat II will remain in the cost-sharing agreement.

As it is now, Mount Werner Water will continue to pay the city to use the treatment plant, but will not be putting any money up front into the expansion of the plant. Their policy of "pay-as-you-go," which mandates that Mount Werner pay for the sewage capacity it uses on a regular basis, has been in place since the city and the district entered into an agreement in 1980 to share the costs and benefits of wastewater treatment at the city's plant west of downtown.

CHANGE IN PLANS
Mount Werner District Manager Dan Birch said that after the city decided it wanted to move from the pay-as-you-go system to a cost-sharing system in which the district would share the debt with the city, the district wanted to protect its interests.

The cost-sharing system, according to the members of the board, would have been acceptable in fact, the board went ahead and borrowed about $3 million to cover its costs. But if they were going to pay for 40 percent of the expansion, they wanted the ability to control that 40 percent, Brennan said.

Hughes said he bristled when he read Mount Werner's most recent proposal, which would have given the district more power to allocate wastewater capacity and to expand the plant in the future, among other issues. Hughes made it clear that the city owned the plant and would not give up such significant decision-making power to Mount Werner Water. City Council members, tired of what they believe are Mount Werner's consistent attempts to take advantage of them, decided the city could do the job on its own.

"We have a sewer plant to run," Hughes said. "We need to go about the business of running it."

When the city came to the conclusion the district would not accept its proposal without amending it, city officials decided they didn't want to talk anymore.

"They sent us an amendment to the 1980 agreement that was essentially reinventing the whole thing," Councilman Jim Engelken said.

The members of the Mount Werner board, however, thought their draft proposal was just that a draft.

"I think it's premature not to negotiate a draft," said board member Carol Fox.

DIFFERENT PHILOSOPHIES
Fox also noted that the city's most recent letter indicates it can control which buildings in the Mount Werner district can get wastewater permits. The city has recently discussed implementing a "concurrency" program, which would allow the city to control the amount of various utilities and other infrastructure used by different kinds of development. That program, City Council members have said, could be used as a growth-control tool.

The members of the district, however, see the limiting of wastewater capacity as an unfair tactic for controlling growth, a tactic they say goes against the 1980 agreement.

"The city is talking about controlling development in the Mount Werner District in that when new buildings come into the district, they would have to get permission for wastewater allocation from the city for a building permit," Fox said. "Why would we be treated differently than anybody else?"

Brennan echoed Fox's comments, noting the city has full power to control growth, but remarking he doesn't understand why municipal officials would focus on controlling the allocation of utilities to do so.

Both sides also talked about the dissolution in 1999 of consolidation talks as a precursor to this most recent breakup.

City Council President pro tem Kathy Connell referred to the 1999 breakup in the city's written statement about the most recent split. Connell, like Hughes and other council members, said she thought the newest proposal from Mount Werner Water qualified as an about-face, much like the district's 1999 position on consolidation.

"This is beginning to look like 1999 all over again," Connell was quoted in the city's written statement. "In that year, we almost had a consolidation agreement when they changed their minds and decided to separate. This time, we've been engaged in good faith negotiations and had most issues settled when they announced this sudden change of position.

"Here we go again."