Our View: Water rates merit more explanation

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Editorial Board, April 2010 to Aug. 8, 2010

  • Suzanne Schlicht, publisher
  • Brent Boyer, editor
  • Blythe Terrell, city editor
  • Tom Ross, reporter
  • Towny Anderson, community representative
  • Tatiana Achcar, community representative

Contact the editorial board at (970) 871-4221 or editor@steamboatpilot.com. Would you like to be a member of the board? Fill out a letter of interest now.

— Years of poor planning and mismanagement are coming back to bite many Steamboat Springs residents and business owners where it hurts the most — their pocketbooks.

The Steamboat Springs City Council was presented a study last week that recommends substantial and sustained water and wastewater rate increases for all customers. If approved as recommended, the typical residential water bill for a single-family home that uses 7,000 gallons of water per month would increase 14 percent in 2011, from the current $28.43 to $32.41. Rates would continue to increase for the next eight years, reaching $61.56 per month for the typical home in 2019.

Monthly wastewater rates would increase 13 percent in 2011, the report states, from the current $26.88 to $30.37. Those rates also would increase on an annual basis, reaching $50.73 per month in 2019. All of this burden will be on the backs of Steamboat residents who live north of Fish Creek — not those in the Mount Werner Water and Sanitation District.

Additionally, tap fees for new construction would come close to doubling, increasing from $7,435 to $14,190. Wholesale water costs for the Steamboat II subdivision could increase nearly 200 percent by 2013, reaching more than $130,000 that year.

Commercial water and wastewater users north of Fish Creek also would see significant rate increases during the next nine years.

The result would be revenues sufficient to fund $70 million in water and wastewater improvement projects, as well as cover the cost of annual operations and maintenance. To be clear, much of the cost of system improvements will go toward replacing an aging infrastructure that the city has seemingly ignored for years. That includes cracked sewer lines already at capacity and, in some areas, lack of sufficient water pressure for firefighting purposes. Perhaps the biggest issue is the lack of redundancy in the city’s water system.  

What’s most disturbing is how the city got to this point. Insufficient rate increases throughout the years and using tap fees to fund operating costs instead of capital projects are the primary culprits. The city raised water rates by 50 percent less than two years ago and warned about future increases, but that doesn’t make the latest news any less painful or forgivable.

At the time of that rate increase, this Editorial Board asked city officials the following. We think they’re worth repeating today.

Beyond across-the-board rate increases, does the city’s current water rate structure need to be updated? For example, should the rate system be tiered to better promote residential and commercial conservation? Rate revenues should be sufficient to fund the water system’s daily operations, but are there other opportunities to improve efficiency?

It’s time for the city and the Mount Werner Water and Sanitation District to return to the negotiating table for consolidation talks. The two entities have a contentious history. It’s difficult to understand why a city of 11,000 people has two water systems with two rate structures, despite sharing virtually all the same resources and facilities. We think there’s an opportunity for the city to take a lead role in reigniting consolidation talks. There must be a route that leads to benefits for users in both districts, not to mention a fair rate structure.

Regardless, city residents and business owners seemed destined to absorb the impact of significant rate increases in the coming years. Steamboat Springs resident Bill Jameson almost hit the nail on the head during the public comment portion of Tuesday’s council meeting.

“Prior City Councils haven’t addressed this for years. … Now, we’re in a situation where increases are going to have to be more substantial than if appropriate increases had been implemented along the way,” Jameson said. “I guess it’s time to bite the bullet.”

But one of the problems is that City Councils only can act on information given them by staffers and department directors. It seems clear that past city leaders failed to address these issues with past councils. We’re thankful that folks such as Public Works Director Philo Shelton now appear to be stressing the urgency of the situation to the elected officials who ultimately sign off on the rate increases.

Those increases will be more palatable — and understandable — if the city can demonstrate how, after years of mismanagement, it’s on the right track for long-term water and wastewater system maintenance and planning.

Comments

exduffer 4 years, 2 months ago

Just another example of how a government in good times assumes the money will just keep flowing down the pipe (pun intended). Another example is why does the city assume reponsibilty for roads to nowhere when there seems no justification ie Widhorse 1 house, Barn Village 2 houses, Gloria's New Victory Dam the Topedoes Highway no nothing. More operating costs but no more operating revenue.

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RPG 4 years, 2 months ago

With high unemployment and a recession, the water study should have recommended a 14% decrease!

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Jay Gallagher 4 years, 2 months ago

Regarding the last sentence of paragraph 3, it is incorrect to say that "all this burden will be on the backs of Steamboat residents who live north of Fish Creek- not those in the Mount Werner Water and Sanitation District"

The City of Steamboat Springs sets the wastewater treatment fees for its residents and its "wholesale customers", those in the Mount Werner Water and Sanitation District, the Tree Haus Metro District, and the Steamboat II Metro District. These fees are based on calculations of the Cost to Serve (COS) each customer class in each entity.

For its part, the Mount Werner Water District bills and collects these fees from its customers and remits monthly payments to the City to cover the District’s share of the operation and maintenance costs of the wastewater treatment plant and the wastewater interceptor. The same is true for wastewater treatment tap fees paid by developers.

The proposed increases in wastewater treatment fees and tap fees will affect not only residents and businesses in the City District, but also those in the Mount Werner Water District, Steamboat II, and Tree Haus.

The Mount Werner Water District charges its customers for water on the basis of its Cost to Serve each customer class. In 2007, the District put into effect new water rates and a tiered water rate structure. The District will be reviewing its water rates again in 2011.

Jay Gallagher General Manager Mount Werner Water and Sanitation District

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Steve Lewis 4 years, 2 months ago

The editorial raises the opposite of my concern, when it says tap fees funded operating costs. My concern is that operations and maintenance revenue (our water rates) should not be used to install larger pipes to accommodate development -tap fees should pay for that.

If the tap fee fund has been used to pay for operating costs, the city's books should show that $$ transfer.

As I understand it, a few pipes will be upsized by using water rates because that is the only money available, and, much later, tap fees will backfill the operating fund for that expense. The city's books should show all this accurately. I don't mind this, provided the different obligations are balanced in the end.

Certainly any pipes that are getting upsized should be moved from their current budget line as "non-growth related" costs to the "growth related" costs column. In this regard, the current expenditure proposal is not correct in my opinion.

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Steve Lewis 4 years, 2 months ago

Another problem with the current proposal is that, roughly speaking, water rates between 2007 and 2019 will rise by about 3x while tap fees in the same time frame will rise by 2x.

The City should explain the rationale for that large inequity in their proposed rate hikes.

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