Council delays move of sewer plant to avoid rate hikes | PostIndependent.com
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Council delays move of sewer plant to avoid rate hikes

The effluent portion of Glenwood Springs’ confluence plan will have to wait in order to keep the lid on wastewater rate increases.City Council this week agreed to postpone relocating the city sewer plant from the confluence of the Roaring Fork and Colorado Rivers for a few years. The alternative might have been a series of rate increases that could have caused a minimum monthly bill of $17 to skyrocket to $65 in as little as three years.”There’s no way we can ask people to pay $65 a month,” Mayor Bruce Christensen said at a council work session on water and sewer rates Thursday.Councilman Joe O’Donnell agreed, and noted that residents already are facing soaring costs for expenses such as gasoline and home heating.”There’s a lot of people out there struggling,” he said.Much of the increase would pay for the $25 million relocation of the plant to West Glenwood. It’s part of a plan that also includes extending Eighth Street to the bridge over the Roaring Fork River and redeveloping the confluence area. Council also approved the Eighth Street project Thursday.The city last adjusted water and sewer rates in January 2000. It is studying the rates in hopes of making them more accurately reflect the cost of providing the services.The study is expected to lead to some increase in bills for both utilities. The city now uses sales tax funding to help pay for the systems, but city officials hope to reduce or eliminate that subsidy and make the utilities self-supporting.Burns & McDonnell, the consulting firm that is analyzing rates for the city, has looked at the projected rate increases that would be required to both end the use of the sales tax and fully fund upcoming capital improvements including the sewer plant relocation. Its draft report has found that achieving these goals would require water rates increases of 10 percent a year for four years, and sewer rate increases of 55 percent in the next two years and 50 percent the third year. Otherwise, the two utilities would face a combined deficit of $3.1 million by 2010.While council wasn’t ready to swallow such high sewer rate hikes, it also isn’t ready to give up on moving the plant. Besides the fact that the city would like to get the plant out of the center of town, land is limited at the current site, meaning there is little ability to expand the plant when the need arises.”We’ve got to move it sooner or later,” O’Donnell said.Council also doesn’t want to wait too long to move the plant. The longer the move takes, the more the city will have to spend in the meantime on required upgrades for a facility that is destined to be demolished.City manager Jeff Hecksel recommended against trying to do the move in 2007 or 2008, considering the possible rate impacts and other major projects already on the city’s plate. Among these are the Eighth Street work and other street projects to be funded by a sales tax approved by voters in November. Instead, council has decided to plan on aiming for design of the new sewer plant in 2009 and construction in 2010.Pushing back the time line should reduce the size of the required rate hikes. Council also has agreed to reconsider its plans for eliminating the sales tax subsidy, to further ease the possible impacts on ratepayers.Council had asked Burns & McDonnell to look at what rate hikes would be required to phase out that subsidy in five years. Now, it has agreed to see what difference in rate hikes would result from spreading out that phase-out over a 10-year time period, or continuing the subsidy at $500,000 a year for as long as it takes to pay off the debt for a new sewer plant.The city subsidizes its water and sewer improvements out of a capital fund paid for by sales tax revenues. Hecksel said most cities’ utilities don’t rely on tax proceeds.Sales tax revenue long has been a cash cow for the city, but in recent years that has changed. Glenwood’s role as a regional retail hub has diminished somewhat as other communities’ retail offerings have grown.If Glenwood Springs can stop relying on its sales tax to pay for water and sewer costs, it will have more flexibility to fund other needs, Hecksel said. If the city sales tax no longer was subsidizing water and sewer in a decade, that could be just about the time the city might be looking at trying to pay for a Highway 82 bypass, he noted.Hecksel said the city can’t ask for any more sales tax hikes to meet its needs. Its latest increase was approved by just 11 votes.”You’re done with sales taxes,” he told council. “You’re not getting any more.”Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com


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