Durango City Council has approved a yearlong reduction of water rates that will save residents $5.81 per month and commercial entities $43.09 per month on average.
The rate changes will become official after a second reading on April 5 and will take effect with either April or May water bills, said Mayor Kim Baxter.
The new rates will bring the average monthly water bill down to $28.28 for residents and $130 for commercial users.
The change presented last week to City Council will eliminate the duplex water rate classification, remove winter and summer rate differences and expand the allotted consumption of water per gallon.
Public Works Director Allison Baker said during a public hearing that the changes to the water rate were recommended by the Infrastructure Advisory Board.
The ordinance change aims to reduce water revenue by about $1.58 million this year, putting projected water rate revenue at $6 million for 2022.
The one-year reduction was made because the city scrapped plans for a second water-treatment plant at Ridges Basin. The city determined a second water-treatment plant was less cost-effective than rehabilitation of the existing water treatment plant at College Mesa, Baxter said.
The Ridges Basin water-treatment plant was estimated to cost $70 million, while the rehab and upgrade of the College Mesa facility was estimated to cost about $40 million, she said.
The city has been collecting revenue in a reserve fund from water bills for the Ridges Basin project, which would also necessitate a pipeline from Lake Nighthorse to the second water treatment plant.
The reserve fund had about $17 million when the second facility plans were canceled, Baxter said.
“We’ll do a rate study to incorporate College Mesa upgrades, enhancements and repairs, and all of that,” she said.
The study will also inform City Council about the expected costs for a pipeline from Lake Nighthorse to College Mesa, she said.
“We’re reviewing all of our rates based upon our true needs every couple of years to make sure that we’re doing the right thing,” Baxter said in an interview Saturday.
She added that frequent re-examination of water rates is something cities should be pursuing.
A rehabilitated College Mesa water treatment plant is projected to meet the city’s water needs until at least 2050, but more likely until 2070, Baxter said.
Residential and commercial water rates are headed in the opposite direction of sewer, trash and recycling fees.
In January, City Council approved a 3% rate increase to sewer fees, resulting in a $2.22 price hike per month, on average.
Jarrod Biggs, who is now assistant finance director for the city, said rising costs are outpacing sewer revenues. He referenced inflation in 2021 and said the costs of chemicals for the water treatment plant rose by 35%.
“We know costs are rising, and we wanted to hedge against that in some manner,” he said.
City Council also approved a 2.5% increase for trash and recycling collection fees to maintain funding for future expansion of its collection fleet and facilities.
The increase equates to 42 cents more a month for trash and 29 cents more a month for recycling for the average resident who pays for 90-gallon containers, bringing the monthly rates to $17.25 for garbage and $11.89 for recycling.