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Durango sewer rates to increase $2.22 per month, on average

City Council approves 3% hike to address inflation
Durango City Council approved a 3% increase in base sewer fees for ratepayers, driven largely by inflation, according to city officials. (Durango Herald file)

Durango City Council on Tuesday approved a 3% rate increase for all customers who use the city’s sewer infrastructure.

The ordinance passed with a vote of 4 to 1, with Olivier Bosmans being the only councilor to vote against the increase.

He said the information he reviewed regarding the rate increase was unclear.

“What the Infrastructure Advisory Board presented at the time showed a loss of the sewer fund balance of negative $700,000, while the actual sewer fund balance in the adopted sewer fund balance budgeted for 2022 shows a surplus of $5.33 million,” he said.

Jarrod Biggs, assistant utilities director for the city, said he believes information Bosmans is referring to is outdated, and newer data is available.

Biggs said that although there is a surplus in the sewer fund, it won’t last with rising costs outpacing sewer revenues.

“We know costs are rising, and we wanted to hedge against that in some manner,” he said.

According to Biggs, inflation in the past year has driven up sewer operations considerably. He said the cost of chemicals used to operate the city’s water treatment facility went up 35% in 2021.

“The increase here stems from the cost of everything going up,” he said. “Our costs to operate have gone up on par with the way construction costs have been going up.”

Other councilors commended city staff members and the Infrastructure Advisory Board for looking at the numbers and bringing inflation considerations to the council’s attention.

“I want to thank the staff, and I want to recognize the huge amount of progress that’s been made in the past two years in our financial transparency, accountability and management,” said City Councilor Barbara Noseworthy.

City Manager José Madrigal said the 3% increase will, on average, translate to a $2.22 increase for sewer ratepayers.

Sewer increases are tied to the base rate charges for residential and commercial customers. Those who go over the base rate of usage will not be charged anything more than they normally would for going over.

Base rates are determined by the size of a person’s water meter. Most residential homes have a water meter size of five-eights of an inch; the new base rate for homes with that meter size inside Durango city limits will be $23.71 per month.

“Ninety-five percent of our ratepayers are on that five-eight inch charge, and that transcends both residential and commercial,” Biggs said.

Revenue from sewer rates in Durango is about $7.9 million per year, while the operating budget of the city’s sewage infrastructure is $3.6 million. Another $3.4 million is diverted from sewer rate revenue to pay off debt from large projects, such as construction on the Santa Rita Water Reclamation Facility.

Over the past three years, sewage revenues left over to pay for capital expenses have been around $900,000 annually. However, the annual cost of capital expenses for the sewer system has been around $2 million. Capital expenses include projects such as sewer line rehabilitation and manhole replacements, Biggs said.

“If we don’t have adjustments to bring in more revenue, we will have to watch and limit capital improvement projects, and defer maintenance,” he said.

njohnson@durangoherald.com

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