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| 10/24/2007 1:01:00 PM | Email this article • Print this article | Town of BV considers water rate hike
Kathy Davis
Times Reporter
The 2007 Water Service Rate Study recommending hikes of up to 20 percent "deserves a whole lot more study," the Buena Vista Trustees decided at a special work session on Tuesday, Oct. 23 at the community center.
Leonard Rice Engineers of Denver, who prepared the study at a cost of $15,000, made recommendations on water rates, the system investment fees (tap fees) and a plan for switching to Equivalent Residential Units (EQRs). The existing customers must pay to maintain sufficient water and development must pay its own way, said Daria Giron, project manager for Leonard Rice. Town public works director Roy Gertson said the rate study was done to implement the Water Master Plan and get a fresh look at the system and new concepts.
Giron said that new regulations may up the water treatment requirements and there may be a need for expansion of the water treatment facility. The annual operating expenses were projected at close to $900,000 and revenues at $600,000, leaving an annual deficit of $300,000, she said. Rates must be increased to operate in a fiscally sound manner, she said.
The proposed rate structure decreased the base gallons from 5,000 to 4,000 and proposed increases for the base rate. A 20 percent increase could interpret to about $5 a month per household plus the proposed percentage goes up exponentially per every 1,000 gallons used. The percentage of increase for senior citizens was less.
For the anticipated growth, the recommended tap fee was $7,700. The Town expects to add 1,800 EQRs at a rate of 3.5 percent growth per year, she said. The costs of improvements are directly related to growth, she said. It is unknown if the decline in the housing market on the front range will impact Buena Vista, she said. The recommended cash-in-lieu of water rights would go from $6,000 to $8,400. Giron recommended water rights over cash-in-lieu.
For the list of recommended improvements over the next 20 years that included pipe replacements, meter replacements, water rights storage acquisitions, chlorine contractor for water treatment, chlorine contractor for well #2, a membrane filtration process retrofit, the cost could be $4.6 million. Capital improvements for growth, including the total for the membrane filtration process retrofit, totaled $5 million for a total of $9.6 million.
At a minimum, annual increases should be 3.5 percent to meet anticipated inflation, Giron said.
Trustee Jerry Steinauer said this deserves a whole lot more study and should be talked about at length. "There are discrepancies I'm having a problem with," he said. There are assumptions for required needs that need more investigation, he said.
Trustee Diane Look said their general feeling was that when there is an increase, demands go down and then revenues decrease. Water conservation could detain the need for some improvements. Town treasurer Cyndi Marsh said that the fixed costs are there for debt and salary so there is still the need. Marsh also questioned where the plans were in the study for purchasing water rights. Giron said that they talked to the town water engineer who said the town does have enough water rights, but needs water storage.
Look said the trustees need to ponder adopting a new rate structure. Customers were extremely sensitive about the last rate increase in 2004, she said.
The trustees decided to hold a work session prior to their next regular meeting on Nov. 13 to discuss water rates.
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