Water rate discussion points to large increases in Glenwood Springs in 2021
Water rates could see a big increase in Glenwood Springs next year.
The Glenwood Springs City Council discussed a recently completed water rate study at a work session Thursday afternoon. No binding decisions were made.
The current study, as presented by Bryan Mantz of consultant GovRates, recommends increasing the cost of water by 57% in 2021; increasing the base water rate from $13.83 to $32 per month; increasing wastewater rates and base fee by 36%; and providing more volumetric steps within the water rate system.
These rates would increase the average water/sewer bill in the city from $107.96 a month to $152.85 a month, an average increase of 42%.
Rate increases would not take effect until Jan. 1 at the earliest, and Mantz referred to these as interim rates. A new billing system was proposed based on meter size, as city public works director Matt Langhorst said it’s done in Las Vegas, Nevada. That system won’t be ready until the middle of next year at the earliest.
Although the city Financial Advisory Board recommended a one-time rate adjustment in 2021, councilors mostly agreed that an increase of that size was too much to agree to in 2020 considering the economic impacts of COVID-19 and the Grizzly Creek Fire.
“I would have no appetite for a 57% increase at one time,” Councilor Steve Davis said.
Councilor Tony Hershey said he is opposed to any rate increases.
Mantz also presented a phased rate increase over two years with water rates going up 35% in 2021 and 17% in 2022 for a cumulative increase of 58%; and wastewater rates increasing 17% in both years for a cumulative increase of 37%. With those increases combined, the water/wastewater bill would increase 24% in 2021 and 17% in 2022.
A downside of the phased approach is cash balances would drop in 2021 and remain lower than with the one-time increase.
The study pointed out three other shortcomings of the current system.
One is that all customers pay the same base rate. Once meter size data is put into a usable form, which Langhorst said will happen this winter, base rates could be determined by meter size.
Residential and nonresidential water users have the same price blocks, pushing most nonresidential users to the most expensive rate. The current water rate structure has three price blocks: 0 to 5,500 gallons; 5,500 to 17,500 gallons; and over 17,500 gallons. The study proposes changing that to five blocks: 0 to 3,000 gallons; 3,000 to 11,000 gallons; 11,000 to 22,000 gallons; 22,000 to 33,000 gallons; and over 33,000 gallons.
The study also pointed out that wastewater rates are highest for restaurants, at $9.13 per 1,000 gallons; $7.32 for lodging with food service; and $6.31 for all others. The proposed rate is $8.91 per 1,000 gallons for all non-residential users.
Mantz referred to non-residential use as “essential.” Councilor Paula Stepp said that sends the wrong message during a 20-year drought.
Mantz said that businesses have a profit motive to be efficient, while Langhorst said that residential use is extremely high and charging more for higher usage is a way to reduce overall use.
Langhorst had another take on efficiency.
“There’s a fine balance between forcing conservation and still making enough money to fund the water system itself,” he said.
The study was spurred in part by $38 million worth of water and wastewater system capital improvement projects the city needs to complete and the need to fund them, according to the city’s staff report for the work session.
Even before these projects the city was not collecting enough money to fund the water and wastewater departments, meaning the city has been funding water utilities in part with reserves since at least 2018, according to the staff report.
The last rate study was completed in 2014, and a 15.8% increase was needed at that time. In 2015, council approved rate increases of 7% for wastewater and 10% for water. Recommendations to increase rates by 4-6% for up to five years were not followed.
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