Gabe Preston of Durango-based RPI Consulting presented town trustees with the news on Wednesday, Nov. 13. Most of the failing lines are located on North Main Street, East Menefee Street as well as south of the Mancos River along First Street and Second Street. Approximately a fifth of the town\u2019s water is lost annually to leaky pipes and outdated water taps.<\/p>\n
\u201cSome of the pipes are very old,\u201d said Mayor Rachel Simbeck. \u201cThey are in dire need of replacement.\u201d<\/p>\n
Calling to replace the lines within the next decade, Preston urged the town to consider increasing water rates to offset the capital improvement project. He said the town\u2019s current water rates are not only below average when compared to other small towns in the region, but the amount of water appropriated monthly to customers is also above average when compared to those same towns.<\/p>\n
Preston provided town trustees with three possible options. One would maintain the current $25.72 monthly water rate for residential customers, but lower the total amount of water included under the rate from 10,000 to 7,000 gallons per month. Preston said the model would increase annual revenues by $17,000.<\/p>\n
\u201cUnder this scenario, operations and maintenance would still outpace revenues by 2018,\u201d Preston explained.<\/p>\n
A second option calls to lower the water threshold from 10,000 to 7,000 gallons in combination with a $5 monthly increase to the base rate. This alternative would increase annual revenues about $58,000, he said.<\/p>\n
\u201cThis model gets you closer to the range needed to actually accomplish capital improvements and replacement projects,\u201d Preston told trustees.<\/p>\n
The final option proposed to town officials again lowered the amount of water to 7,000 gallons per month, but in connection to a $15 monthly increase to the base rate. This plan would provide an additional $119,000 in annual surplus revenues, Preston added.<\/p>\n
\u201cThere\u2019s a trend across Colorado where many towns are charging higher rates,\u201d Preston said. \u201cThis would be the best model to accomplish your capital improvement goals.\u201d<\/p>\n
Under the current base rate, more than half, 56 percent, of the town\u2019s generated water revenues are spent on administrative costs. After water treatment, storage and distribution costs, only about a tenth of revenues are remaining to cover capital improvement projects.<\/p>\n
Preston said some residents will reject any rate increases, but he added that many more expect leaders to make tough infrastructure improvement decisions.<\/p>\n
\u201cThis stuff is buried,\u201d Preston said. \u201cNo one sees it, and no one really cares about it until their water doesn\u2019t work or turns brown.\u201d<\/p>\n
Mayor Simbeck said officials should address water rates, adding the town\u2019s general fund should not be used to subsidize needed capital improvements. Trustee Alan Rolston agreed.<\/p>\n
\u201cIt\u2019s foolish,\u201d Rolston said. \u201cWe have to make these improvements.\u201d<\/p>\n
Trustee Queenie Barz voiced concerns for residents on fixed incomes, suggesting leaders should obtain feedback from their constituents before spiking water rates. Trustee Chip Tuthill agreed.<\/p>\n
\u201cIf we hit residents with a $15 monthly increase to their water rates, they\u2019ll burn our effigies in the streets,\u201d he said.<\/p>\n
Preston then reminded trustees they could phase in the water rate increases over time to help ease the sticker shock. Officials ultimately decided to table the matter until the New Year.<\/p>\n
\u201cThis is going to be a hard sale,\u201d said trustee Todd Kearns. \u201cBut the sooner it\u2019s done, the lower the long term costs.\u201d<\/p>\n