Rifle City Council begins process of analyzing utility rate structure
Rifle city councilors have begun the process of studying utility rates that will eventually determine whether the city should increase, decrease or keep rates the same.
The rate study is being conducted by Raftelis Financial Consultants, Inc.
Raftelis Senior Manager Todd Cristiano presented during a city workshop Jan. 6 a four-step study for the city to explore in relation to the rate designs for water and wastewater.
The study will closely address how much revenue is needed to fund capital expenditures, which customer classifications need to pay what, what the rate design will look like, and what one-time charges to assess for new development.
“The main goal of this is to give you guys some of the information you’re going to need to make decisions on our rates,” Cristiano said. “There’s going to be some stuff that’s going to take a while to digest.”
Currently, the city charges a monthly rate of $30.63 for the first 2,000 gallons of water a customer uses. Beyond that, the city tacks on variable extra charges if a customer uses more than the original 2,000 gallons per month.
In addition, customers pay a minimum $3.68 in water tank storage charges. The extra fee, which is 12% of a customer’s average bill, came when the city’s water tank was on the verge of failing and required $4.3 million in repairs.
For wastewater, the city charges a monthly rate of $57.16 for the first 4,000 gallons. Customers who use more than allotted 4,000 gallons face additional charges.
Tier 0 (first 0-2,000 gallons, base rate): $30.67
Tier 1 (2,000-4,000 gallons): $4.09
Tier 2 (5,000-8,000 gallons): $4.34
Tier 3 (9,000-20,000): $5.10
Tier 4 (over 21,000): $6.12
Extra water tank storage charge: $3.68 (minimum) or 12% of total bill
Tier 0 (first 4,000 gallons, base rate): $57.16
Tier 1 (over 5,000 gallons): $12.80
Right now, the rate structure applies to all customers within Rifle, whether they fall under residential, irrigation or commercial categories, Cristiano said.
“When you lump the $36.63 plus the $57.16, maybe there’s an affordability question there in terms of do we need to look at addressing lowering the fixed charge somehow … to see how it falls out with the volume metric charge?” Cristiano said.
The city could also take into consideration water conservation practices and how much water should be allowed for customer use.
Providing feedback, Councilor Ed Green questioned whether the city should allow customers enough water without them incurring significant costs.
“When it gets really hot and people need to still water their lawn from keeping it turning brown, how do we deal with that and satisfy customers?”
Mayor Barbra Clifton said that once the analysis is complete and the city makes its final determination for what rates they should charge, there needs to be “customer understanding” and “ease in administration and implementation.”
“I have a lot of people who just do not understand how to read their water bills. They can’t figure out how to calculate their rates, they can’t figure out the change from month to month,” she said. “I’ve even sat down with people and tried to figure it out, and I can’t figure it out.
“It’s pretty complicated.”
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