The Durango City Council identified possible major utility rate increases Tuesday that may be imposed to help fund needed infrastructure improvements.
The city needs 55 percent more revenue to fund water improvements and 80 percent more revenue to fund sewer upgrades next year, consultants from Willdan Financial Services told councilors.
“This is very painful for every resident, every city councilor,” Mayor Sweetie Marbury said.
The city is in need of $55 million in wastewater plant improvements and a variety of expensive improvements to the water system, and the city must have more cash flow to legally issue bonds to finance the projects. In 2016, residents likely will face more rate increases.
“We should have been raising rates over the last 50 years, and now we’re dealing with it,” Counselor Christina Rinderle said.
The consultants advised introducing a new fixed charge for water service that would be in addition to the per-thousand gallon fee. This rate would be either $12.46 or $18.69, depending on the size of water line serving a home.
While the number shocked some councilors, Rinderle said a base charge was an issue of fairness.
Those with second homes in Durango that use water only for a short time should still pay for the infrastructure necessary to bring it to their homes, she said.
The consultants also presented a new tiered structure of water charges based on usage. Councilors voiced approval for a structure that would encourage water conservation.
Those with the lowest water usage could expect to be charged about $17.32 per month in the winter and about $23.55 in the summer under the suggested structure. Average users could expect to pay $33.13 for a winter month and $40.45 in the summer. The current average water bill is $24.23 in a winter month.
The consultants also advised doubling the proposed base charges and water rates for those living in the county on city water. This is a differential that already is imposed for sewer service. It would impact about 5 percent of water users.
The logic behind this differential was hotly debated.
“It’s not right to say it’s two times (more) and not have any rational nexus for it,” said Bob Wolff, a Durango Utilities Commission member.
However, City Manager Ron LeBlanc argued county residents using city water have all the benefits of a city utility but wouldn’t shoulder any of the risk if the city issues bonds.
Consultants suggested a flat-rate structure for sewage bills at about $8.28 per thousand gallons for a city resident. Average users would face an 86 percent increase for average users from $21.39 to $39.72. This would include a 20 percent increase in the base charge for service.