Utility bill forgiveness is on the horizon for some Durango businesses and residents, the newest economic relief effort put forward by the city of Durango in response to the coronavirus pandemic.
Durango City Council gave a unanimous go-ahead Tuesday for the relief program, which offers three months of bill forgiveness for water, sewer, trash and recycling services. The program is intended to help struggling businesses and residents financially impacted by the coronavirus pandemic.
With council consent, City Manager José Madrigal will launch the program with an emergency order within a week.
“This is something that I look at as thinking out of the box,” Madrigal said during the City Council meeting. “Businesses came to us saying that this would provide them some meaningful help, so we looked at some ways to be able to do it.”
The city could lose as much as $1.9 million in revenue from commercial entities during the three-month program, but that number is an overestimate, said Devon Schmidt, Durango’s business and strategic planning manager.
It includes corporate entities that would not be eligible for the forgiveness program, she said.
The city would lose about $154,000 in utility revenue from its resident population, if everyone who is eligible applies.
“We are reacting (in a way) that we know we will be able to financially sustain within our funds,” Madrigal said.
Businesses and residents would have to submit an application and meet certain eligibility criteria to receive 100% bill forgiveness.
Businesses must show a 25% loss in revenue in 2020 compared with 2019 and substantial impacts related to the pandemic, according to a city staff presentation.
If a business opened in 2020 and couldn’t show a decrease, the business could still apply. City staff members would ask for other documents to demonstrate a financial loss.
Businesses have to be locally owned and/or headquartered in Durango. A locally owned franchise could apply, but a large corporate chain would not be eligible. Businesses cannot be delinquent in sales tax submissions.
Finally, businesses have to be compliant with local, Colorado and federal laws – including public health orders. Some businesses have pushed against the restrictions by refusing to comply, citing financial concerns.
Commercial entities would see relief from Jan. 1 to March 31.
Residents must meet income limits: Low-income households are eligible to apply. The city estimated that about 1,800 residents, or 9.2% of Durango, would qualify based on income data.
The city is taking a tiered approach to utility bill forgiveness for residents. Those in the low-income category would get one month of forgiveness; “very low” income, two months; and “extremely low” income, three months.
“I think this is another good program to add,” said Councilor Melissa Youssef. “These are crazy times, so it’s important that we step in if we can.”
smullane@durangoherald.com
