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Glenwood to review utility rates

Dennis Webb

A new study could determine whether Glenwood Springs’ water and sewer rates are too low, and its electric rates too high.But customers shouldn’t assume that the rate study and cost of service analysis will result in higher or lower bills for any of these utilities.”I’ve done enough of these (studies) and I wouldn’t jump to conclusions,” city manager Jeff Hecksel said.The point of the study is to determine what rate changes, if any, might be warranted. It will also look at how rates compare to other area utility providers.Currently, the city’s electric system is operating at a surplus. By contrast, the water and wastewater services, though not cash-strapped, are failing to bring in enough to cover depreciation and future infrastructure needs.Hecksel said proceeds from the electric system are being used for purposes such as subsidizing the city’s general fund. He wants to make sure that doing this doesn’t jeopardize the ability to build up capital reserves, which can fund improvements to the system without the city having to increase rates or borrow money.”I would like to see what the study says and be assured that the electrical system from a financial standpoint is in sound condition,” he said.City finance director Mike Harman said he doesn’t have year-end figures yet for 2004. But in 2003, the city’s electric system produced an operating income of $1.4 million, before transfers to other funds. However, that surplus doesn’t take into account the cost of infrastructure to keep the system operational, Harman said. A lot of the surplus is used to fund system upgrades. Other surplus funds also paid for the broadband system created by the city.As for the water and wastewater fund, 2003 expenses were $553,000 higher than revenue, when almost $1.15 million in depreciation is factored in, Harman said. Still, “they’re not bankrupt; there’s cash in the funds,” Hecksel said. He isn’t sure what the rate study will cost. The city is currently seeking proposals from consultants interested in doing the study. Hecksel hopes the study will be done by July.City Council member Larry Beckwith said he supports the effort.”I think it’s something that we have to look at,” he said.From what he has seen so far, he thinks Glenwood Springs’ electric rates are right in line with those in other communities. But water rates look a little lower.”So there may be an increase of some sort,” he said.Beckwith also would like to see wastewater rates geared to water use. He said he has been approached by a lot of second-home owners who use little water while they are gone.”Their wastewater rates are still a standard rate,” he said.While wastewater rates can vary by usage, they start at a minimum charge of $17.75 per month.Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com


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