The Southern Ute Indian Tribe Utilities Division will raise water and wastewater rates by more than 90% and 50%, respectively, starting Oct. 1.
The Southern Ute Utilities Division, administered by the Southern Ute Growth Fund, provides both treated drinking water and wastewater treatment for the tribal campus, local tribal members living near Ignacio and the town of Ignacio. Discussions of rates have caused a rift between the town and the tribe, said Mark Garcia, interim town manager. While the town and the tribe analyze their agreement, ratepayers are stuck paying ever-increasing water and wastewater utility rates.
“Wastewater and water rates are based on usage, and they’re going up,” Garcia said. Utility customers will be hit with the increase at different times, based on their level of use for water and/or wastewater. But for overall water and wastewater rates, “all levels of users will see probably an increase in their rates starting in 2020,” he said.
Starting Oct. 1, ratepayers will pay higher base rates for fewer correlating gallons of water. Water rates will increase from $32.80 per 8,000 gallons to $47.80 per 6,000 gallons, a 94% increase. The rates will jump again Oct. 1, 2020, to $62.80 per 6,000 gallons, a 156% increase over current rates, according to a July letter to Garcia from the tribe.
The town charges customers additional fees for billing, repairs and collections. Garcia said the town’s water fees will increase from $24.60 to $26.48 a month starting Jan. 1, 2020, a 6.4% increase.
Wastewater rates will also increase. Service users currently pay $72.09 per ERT, or Equivalent Residential Tap, per month. One ERT allows for 7,500 gallons of usage.
That billing system will change. The tribal utility will charge the town based on winter usage, not ERT. This shift will also make ratepayers pay more for fewer gallons. On Oct. 1, the rate will increase to $87.09 per 6,000 gallons, a 51% increase over current rates. Wastewater rates will jump again in 2020. Users will be charged $102.09 per 6,000 gallons, a 77% increase over current rates.
The town charges an additional $9.88 base rate to users for billing, repairs and collections.
According to Garcia, the average town customer uses 4,000 gallons of wastewater per month, so ratepayers are paying for more wastewater than they are using.
“With the new rates and winter flow basis, the rates that the tribe charges the town as a bulk customer will actually go down from the current bulk rate charged,” the tribe wrote in a June news release.
According to Garcia, the tribe has increased rates almost yearly. So why the sudden jump?
In the past, the town has avoided passing rate increases to customers by using reserve funds. Now, however, those funds are no longer available, Garcia said. That means more costs will go to the user.
In its June news release, the tribe said that water and wastewater providers statewide are now coming to grips with deferred maintenance and ever-increasing operating costs. The tribe cited a 2018 Municipal and Wastewater Rate Survey by the Colorado Department of Local Affairs, which indicated that rates appeared to double about every 15 years.
“Our circumstance is magnified by operating a quality system spread over a small population,” tribal representatives said in the June news release.
The tribe declined to comment beyond the news release.
“I think the water rates were acceptable as they were, but they’re going up,” Garcia said. “The sewer rates, we have been contending, and still contend, that they are high and that we’re being overcharged.”
For 6,000 gallons, wastewater rates in Durango were $93.39 and in Bayfield, $54.20, according to a May analysis by The Durango Herald. Garcia said that Bayfield’s system is larger and newer than tribal facilities, yet Bayfield users are still paying less.
In its June news release, the tribe said the comparison was not applicable because each system is unique. It cited more regional base rates per 6,000 gallons: Edgemont Ranch, with a $95 base rate; outside the city of Durango, $186.84; Forest Lakes, $29.50; and Pagosa Springs, $49.88.
Garcia is also basing his assertion, in part, on his own analysis of flow rates through the town and the facility compared to plant costs. The town’s wastewater flows equal 25% of the flow through the plant, and the town is paying 49% of the costs, Garcia said.
The tribe, however, said that rates do not include $40 million in capital costs for building the facilities or $3 million for building a new reservoir. Rates also do not include overhead costs, like oversight, human resources and accounting. The tribe also donated to the Ignacio School District in 2012 by waiving water and wastewater fees, according to its June news release.
“We understand the burden that our customers will bear with the increased rates,” tribal representatives wrote in its July letter to Garcia, “however, please understand that the Southern Ute Indian Tribe continues to absorb other large capital expenses which are not reflected in the new rates, but that correlate with supplying quality water and wastewater products and services.”