The Durango City Council on Tuesday will consider tweaking city utility rates.
The council approved the rate hikes last fall to help fund infrastructure improvements, and now the board will revisit points of contention and unintended consequences.
The board likely is to discuss residents who were inadvertently penalized for their fire-suppression systems, expanding the utility-rebate program and the new city water rate differential for those living in the county, according to city documents.
While the meeting is open to the public, the board will not take public comment.
Councilors asked to revisit a contentious decision to charge those who live in the county double what their city counterparts pay, Councilor Dean Brookie said.
“It’s never too late to ask ourselves: Did we do the right thing?” he said.
As a result of the increase, county residents with city water service now pay more on average for water than those in Forest Lakes, Edgemont, Ignacio and Bayfield.
The staff will recommend county residents continue to pay the difference because it is common, and it helps encourage neighborhoods to apply for annexation to the city. A similar rate differential already was in place for sewer service, a city document said.
However, opponents have said it was arbitrary and likely would slow commercial growth near La Posta Road and Animas Airpark.
“On its surface, it’s just not fair,” said Bob Wolff, a local developer.
This kind of rate differential is common when water is funded by property taxes but not in a rate-based system, he said.
The rates also could create a barrier for businesses in Animas Airpark who could have the option of connecting to a new water main soon.
In October, the city assured the Animas Airpark Association that they would build a water main that businesses could hook up to in 2015.
The water main will connect the city to a new water treatment plant at Lake Nighthorse, but in the meantime the water could flow up to the airpark.
If the rate structure remains, Jerry Zink, vice president of StoneAge Waterblast Tools, said his company would continue hauling water rather than use city water. But he was optimistic the council would reconsider.
“I trust they will put it back on the same rate schedule, and everything will be fine,” he said.
The council also will consider adjustments on the homeowners.
For fire-suppression sprinkler systems, homes need a 1-inch water meter and currently are paying about a $30-a-month base charge for water service. Those with smaller meters are paying about a $12 base charge for water. Residents complained to the city about this charge during the first billing cycle.
The staff will ask the council to lower the base rate for those homes that need the 1-inch meter for sprinkler systems, said Mary Beth Miles, assistant to the city manager.
The council also will consider expanding the annual utility-rebate program to all customers on fixed income. Right now, only those who own a home within city limits can qualify, according to city documents.
Utility rate increases are likely to continue in the coming years to help fund infrastructure needs.
Consultants recommended the city grow the sewer-fund revenue by 25 percent in both 2016 and 2017, which would require additional rate increases for residents.
Similarly, water-fund revenue needs to increase by 32 percent in 2016, according to a rate study consultants completed for the City Council.