IGNACIO – The Ignacio Board of Trustees unanimously passed a resolution Tuesday that changes town water, wastewater and natural gas rates for utility customers.
Ignacio customers are charged for utility costs by the Southern Ute Utilities Division, which is the town’s water provider, and by the town itself. Both entities have changed their rates. The new rates will increase some costs and rebuild town utility funds.
“Raising rates is never ideal,” said Alison deKay, mayor pro-tem. “It’s not something that we want to do. It is sometimes something that is necessary to sustain the (utility) fund.”
Water rates will increase for customers who use more than 1,000 gallons each month. Sewer costs will increase for those who use more than 3,000 gallons of wastewater each month. Many customers will likely see savings on their natural gas bill.
The town rates include a water-loss fee, a capital fund fee and a base charge for operational costs such as personnel, maintenance and administration. The fees are in addition to SUUD’s bulk charges for water and wastewater, which increased by more than 90% and 50%, respectively, in October.
Although Ignacio has paid off its utility-related debts, utility funds are struggling.
In 2019, Ignacio eliminated $650,000 in debt. The early payoff saved the town about $250,000 in interest payments on the loans.
Still, the water fund balance was at about $69,000 at the end of 2019, and the wastewater fund was just over $28,000. Low fund balances can make updating equipment, repairing leaks and other capital projects difficult to accomplish.
“The goal of this work is to make them self-sustaining, and they haven’t been for a long time,” deKay said.
Ignacio is also trying to address water loss in its aging infrastructure.
Ignacio averages at about 20% water loss each month, but the loss can vary from 10% to 30%, said Mark Garcia, interim town manager, in the meeting.
In 2020, the town is trying to retain a leak specialist, and it has already repaired some large leaks. It will also replace aging water meters to make readings more accurate. The town plans to monitor the water-loss fee and possibly re-evaluate in 2021.
Community members at the meeting raised concerns about the impact of the rate change on low- or fixed-income customers.
“I want to ask you guys on the board to think of the people in this town that are on a fixed monthly budget,” said Doug Little, a community member.
At this time, the town does not have resources to assist residents with water or wastewater utilities, but it can connect customers to assistance for natural gas, Garcia said.
What the new rates look like For water, the changed rates will be more closely tied to usage than in previous years. Rates used to be calculated in 3,000-gallon increments. In 2020, prices are determined in 1,000-gallon increments.
Customers who use less water could see savings, while those who use more will see increased costs.
The cost for 1,000 gallons of water or less each month is $32.23, which includes the water-loss fee, capital fund fee, the Ignacio base rate and the SUUD bulk charge. This rate is a 2.6% decrease compared with 2019.
Most Ignacio customers use about 4,000 gallons of water monthly. Those users will pay $49.48, a 20.4% increase.
For sewer utilities, customers’ rates will be based on winter usage in December, January and February.
Low-use customers will see savings, but customers using 4,000 or more gallons of wastewater per month will see increases. For example, customers using 1,000 gallons each month will pay $30.08, or 60.1% in savings. High wastewater users, 6,000 gallons or more, will pay $106.28 each month, a 40.9% increase.
Most customers will see a reduced natural gas rate, but for low-use customers, the rate will be similar or increase slightly because of facility charges.
The natural gas base rate increased from $10.25 in 2019 to $23.75 this year to include facility charges. Unlike in the past, gas usage rates will vary to adapt to market values.