Steamboat reviews water rates
August 15, 2010
Steamboat Springs — Like water flowing through a pipe, issues surrounding Steamboat Springs' needed water system improvements and corresponding rate increases are very much in motion — even as at least three repair projects already are designed and less than a month remains before specific costs for residents could come before the city's elected officials.
City Public Works Director Philo Shelton said Thursday that a water-main replacement in the Indian Trails area, across U.S. Highway 40 from the Stock Bridge Transit Center west of downtown, is out to bid and could begin at the end of this month.
"We've had a lot of leaks on that," Shelton said about the pipeline through a residential area.
Next on the city's list, Shelton said, are water-line improvements on 13th Street, toward the Fairview neighborhood.
Two sewer-line replacements — in the alley between City Hall and Lincoln Avenue near 10th Street, and from West Lincoln Park to the Dream Island area — are designed and ready to go when funds allow, he added.
Those projects and repair needs are emblematic of more than $70 million worth of water and wastewater improvements facing Steamboat Springs, according to Red Oak Consulting.
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The projects include new infrastructure on the city's west side and repairs to, or replacements of, aging sewer pipes through Steamboat Springs' downtown core.
Red Oak listed the projects and their costs, along with projections of water and sewer rate increases through 2019 and higher tap fees for new construction, in a draft report presented to city staff and the Steamboat Springs City Council this month.
Red Oak is a division of the national environmental engineering firm Malcolm Pirnie.
"It'll be done in segments, logical segments … based on the budget we have available to use," Shelton said about the work, which could stretch throughout several years, if not the next decade.
How that budget will look is a topic of much debate.
"We're working to update the study to reflect some of the feedback we've gotten," Red Oak consultant Andrew Rheem said.
The City Council asked Red Oak on Aug. 3 to prepare revised water rate and tap fee projections that would lessen the impacts on local residents and businesses struggling through the national economic recession.
Shelton said the new rate and tap fee plans could be presented in the form of an ordinance at the City Council's Sept. 7 meeting. A second and final reading of that ordinance could occur Sept. 21. Shelton said it remains his goal to see the new water and wastewater rates, and higher tap fees for new construction, implemented Jan. 1.
At the City Council meeting Aug. 3, Jay Gallagher, general manager of the Mount Werner Water and Sanitation District, asked that the new rates not be implemented until April 1.
The Mount Werner district pays the city for its share of operation and maintenance of the wastewater treatment plant, which also is used by the Steamboat II and Tree Haus subdivisions. Those subdivisions also pay the city for wastewater service. Because improvements to the plant and to the wastewater interceptor — where Mount Werner wastewater pipes join the city's — are part of the improvements, wastewater rates for Mount Werner customers would increase. Gallagher said April 1 would allow time to hold public hearings about the new rates.
Gallagher said Red Oak's recommended rates would nearly double wastewater service charges for the 120 or so commercial customers in his district. Those customers include Yampa Valley Medical Center and the Sheraton Steamboat Resort.
Shelton said despite that request, he's still planning on the implementation of the new rates Jan. 1.
He noted that the city's wastewater connectors' agreement with Mount Werner, Tree Haus and Steamboat II expires at the end of this year.
"It's a logical reasoning to have the new agreement coincide with the (new) rates," Shelton said.
He expressed optimism that the expiring agreement won't exacerbate talks about the new rate levels.
"We're trying to vet out all the issues now, so it's not difficult later," Shelton said. "I think everyone understands the cost to serve, and we're working toward that end."
Red Oak Consulting's draft report states 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. Water bill 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.
Wastewater bills for a typical residential home would reach $50.73 per month in 2019.
One-time tap fees for new residential construction, including water and wastewater, could nearly double, from $7,435 to $14,190, an increase of $6,755.
Wholesale water costs for the Steamboat II subdivision could increase nearly 200 percent by 2013, reaching more than $130,000 that year.
City Manager Jon Roberts has said commercial increases are harder to quantify given the variety in water usage by a restaurant or an office, for example. But the city's monthly service charge for commercial water use would increase from $19.50 to $32.70 by 2013, Red Oak states, along with increases in commercial volume rates and wastewater costs.
All those figures are under review for the Sept. 7 meeting.
Also Aug. 3, Steamboat resident Steve Lewis asked whether the new rate increases would allocate costs of base area growth to downtown residents.
"When we upzone the base area hundreds of units beyond what we've planned for, I have to wonder if as a taxpayer … if I'm paying for the expansion of the base area through my water rates?" Lewis asked, citing the need to upsize pipes through the downtown core.
Shelton said in project plans, "development is paying its own way through this cost-to-serve model." A percentage of costs are allocated to repair and replacement, and another percentage is allocated to expansion, he said.
"Everything is set up for everyone to pay their own way for their own facilities," Shelton said.
Shelton added that he's asked Red Oak to prepare a clearer analysis of growth-related and non-growth-related costs in the water rate plan.
One thing everyone agrees on is that municipalities across Colorado and the nation are seeing their water and wastewater costs increase. Red Oak's study, for example, states that even if water and wastewater monthly rates, combined, rise to $64.75 for Steamboat residents, that's still below the $93 monthly cost in Dillon and the $81.56 rate in Winter Park and Fraser.
"Communities all over the country are experiencing varying degrees of deferred maintenance and repair and replacement," Rheem said. "So the city of Steamboat certainly is not alone."