The Durango City Council unanimously approved another water and sewer rate increase at its regularly scheduled meeting Tuesday, a continuance of decades of rate hikes that have exacerbated the cost of living in the city.
Water and sewer rates will rise 3 percent in base and usage fees in 2019, an increase the city has justified as necessary to maintain a fiscal position resilient to future economic fluctuation, maintain and invest in city infrastructure and improve city facilities to meet the needs of a growing community, according to materials prepared by city staff.
“It’s understandable that you have to raise the rates to keep the mechanisms working,” Mayor Sweetie Marbury said.
Both sewer and water rate increases were approved, in part, to account for inflation.
While it is difficult to say how much the city has increased its water rates in the past two decades – because the fee structure has changed in the interim – it is clear from city ordinances dating back to 1997 that the city has been charging more for those services at a rate that outpaced inflation.
From 1997 to 2013, the cost of the first 2,000 gallons of water used by single-family homeowners increased from $5.82 to $13.08, an increase of more than 124 percent, city ordinances show. And the rate for every 1,000 gallons over the base fee rose from $1.24 to $2.23 between 1997 and 2013, an increase of almost 80 percent.
Both of those rates are significantly higher than the 45 percent rate of inflation that occurred during the same time period, according to the Bureau of Labor Statistics. If water rates would have kept pace with inflation, residents would have been paying $8.44 by 2013 for the first 2,000 gallons of water – $4.64 less than what was being collected.
“I do recognize that it is a difficult time, and I do recognize that we have had a lot of rate increases,” said Mayor Pro-Tem Melissa Youssef. “Our utility bills are expensive.”
Then, in 2014, the city conducted a water-rate study that found charging a base fee based on the size of a water meter would be necessary to ensure revenue stability. That’s when the city proposed renovating the Santa Rita Water Reclamation Facility, a more than $50 million project funded through a bond that is being repaid with water and sewer fees.
“Having a base-fixed charge assessed to all customers each month will help to ensure that the city will have the revenues needed in order to meet its annual debt service obligations and will provide additional assurance to bond holders that their loans will be repaid,” the 2014 report states.
That base charge, in 2014, for a residential water meter was $12.46. In 2019, the base rate for the majority of rate-payers will increase to $16.23, an increase of more than 30 percent in half a decade. By comparison, inflation increased only 8 percent during those five years. That means in the past four years, water and sewer rates have risen at almost four times the pace of inflation.
John Simpson, a resident who has been critical of city spending, said Tuesday there wasn’t enough justification for raising sewer and water rates. Simpson was also critical of the city’s tax question in November that would have raised an additional 5.4 mill levy on properties and a 0.55 percent increase to sales tax. That measure failed by more than 20 percent.
“Proceeding with staff recommendation (to approve a rate increase) will only go to further the sentiment in the community that you just don’t get it,” Simpson said of City Council.
Much of the extra money raised through rate increases will help pay for the Santa Rita Water Reclamation Facility; the rest has been used for infrastructure repair that had long been deferred under the previous rate structure, said Jarrod Biggs, assistant utilities director. It will also be used to pay for a second water treatment plant, a project that’s in the beginning stages of planning, he said
“Moving forward, we are making sure we are becoming more proactive with our asset management,” Biggs said.