Mike McKibbin

Follow Me

Back to: News
September 26, 2012
Follow News

Drowning in higher rates?

Rifle residents, get ready for a 56 to 60 percent increase in your water bill next month.

That's what City Manager John Hier told Rifle City Council in a Sept. 19 memo that added the council may be able to "significantly reduce" the new rates, if city voters approve a 3/4 cent sales tax hike on the Nov. 6 ballot.

The higher water rates and the sales tax question are related to the city's plans to build a $25.5 million water treatment plant to replace the Graham Mesa plant.

The city obtained the money for the plant through a low-interest loan from the Colorado Water Resources and Power Authority.

City officials have said the Graham Mesa plant is aging, undersized to serve projected population growth and unable to meet possible tougher federal water quality standards in the future.

The new rates went into affect Sept. 1 and will be reflected on October's utility bills, Hier said.

"I would expect we'll get a few phone calls," he added.

Hier presented figures showing the user of 7,000 gallons of water would have paid $28.91 under the previous rates. However, the same usage will result in a bill of $48.40 under the new rates.

Likewise, 12,000 gallons of water under the old rates would cost $46.61 and now will cost $74.80, and 20,000 gallons will increase the bill from $74.93 under the old rates to $119.60.

"These new rates represent an approximate 56 to 60 percent increase for purchased water," Hier wrote in the memo.

Affect of 3/4 cent sales tax

If approved by voters, the sales tax will generate an estimated $1.5 million annually, Hier wrote, or approximately 71 percent of the projected $2.1 million in new revenue needed annually to build and operate the new plant and meet bond issue payments.

Hier recommended the city take two steps, if the sales tax is approved: Eliminate the phase II water rate increase planned for April 2013, and revise the phase I water rate increase downward, "so the combined revenue from the sales tax and new rates will generate only that revenue needed to pay the debt service and increased operation and maintenance cost on the new plant," Hier wrote.

Due to the "excellent" loan rate received from the Colorado Water and Power Authority, Hier continued, "it may be possible to lower phase I monthly base rates to $23 per month and significantly reduce the phase I tier rates."

Hier also told the council at its Sept. 19 meeting that city staff will prepare two different water department budgets. One will be with the 3/4 cent sales tax revenue and the second without the sales tax revenue.

"I would recommend you adjust the rates if the tax is approved, since we won't need all the revenue the new rates will generate," he told council.

Stories you may be interested in

The Post Independent Updated Sep 26, 2012 05:40PM Published Sep 26, 2012 05:38PM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.