Although Rifle citizens did not have a chance to vote on the plans for the proposed water treatment plant, when it comes to paying for the project, they will have their say at the ballot box in November. Rifle City Council agreed Aug. 1 to present a ballot question for a three-quarters of a cent sales tax hike to help pay for the $25.5 million plant.
The city wants to get the money for the plant through a $25.5 million loan from the Colorado Water Resources and Power Authority.
City officials have said the existing Graham Mesa plant is aging, undersized to serve projected population growth and unable to meet possible tougher federal water quality standards in the future.
Under the water rate structure approved earlier this year by council to help repay the loan and cover operating costs of the new plant, the base rate charged to city water users will nearly double, as of Sept. 1.
City Finance Director Charles Kelty said Tuesday that if voters approve the three-quarter cent sales tax measure in November, the second phase of the rate hike, due to take affect April 1, could be lowered. That would require City Council action sometime after the first of the year, he added.
Kelty said the bonds for the loan were sold last week and he expected to receive the paperwork this week. After those documents are signed by city officials and returned to the water and power authority, the closing date will be Aug. 14. No further action by council is needed to finalize the loan, he added.
After comparing the effect between a half-cent sales tax hike and a three-quarters of a cent increase at a July 18 workshop, council members agreed to pursue the higher rate at their Aug. 1 meeting. When the debt incurred for the water plant is paid off, the sales tax will end.
Councilman Jonathan Rice asked, "I should feel very confident that in 20 years or less [the lifetime of the loan], this loan is going to be paid off and this sales tax will go away?"
City Attorney Jim Neu replied in the affirmative.
Many Rifle residents and business owners have expressed doubt and opposition about the plans for the new plant, despite the city's continued warnings that the current plant is on its last legs.
"We know the Graham Mesa plant has exceeded its design life expectancy. It has been running continuously for more than 30 years. What appliance in your home has run continuously for that long? Other than your water treatment plant, do you know of any piece of machinery that has lasted that long without a major breakdown or major repair?" wrote Rifle Mayor Jay Miller in a guest column published in The Citizen Telegram in June.
Former Rifle Mayor John Scalzo told the council he supported a 1 percent increase, saying he believes it would be easier to ask for a full penny sales tax hike if they were offered more incentives, such as further reducing their water rates.
Some council members expressed concern over raising the sales tax at any rate.
"I've struggled with this, mostly because of my very strong opposition to the water treatment plan and how it's designed, and the cost of it," said Councilwoman Jennifer Sanborn. "As a voter, when I go to vote on this, I'm going to be an angry voter because I don't really have an option."
Councilman Randy Winkler, who has consistently voted against the plan for the water treatment plant, agreed with Sanborn.
"I'm a little torn, too, on this one, because I'm not sure the businesses are the ones who should be paying for this right now," Winkler said.
"As business improves, coming out of the recession, they'll be generating more sales tax," said City Manager John Hier.
That increased revenue will, in turn, help reduce future water rates through the subsidies and pay down the principal on the loan more quickly.
City council will consider final approval of the sales tax ballot question on Aug. 15.