Ignacio town trustees don't want to pass on annual water and sewer rate increases from the Southern Ute Indian Tribe to residents and businesses.
The town's contracts for water, sewer, and gas from the tribe include a rate increase on October 1 each year. But trustees opted on Oct. 7 not to impose the pass-through increases on customers. Instead, the town will absorb the increased costs, at least for now.
The 4.7 percent water rate increase would have raised the lowest use category of up to 3,000 gallons per month by 30¢ to $32.50. The increase for 3,000 to 6,000 gallons would be 60¢ and bring the charge to $39.90, and use above that would be $3.86 per 1,000 gallons for in-town customers.
For sewer, the proposed increase would be from the current $68.09 per month up to $70.73 per equivalent residential tap (ERT).
Audience member Victor Atencio said of the proposed increases, "Utilities are draining our pockets. They are getting bad. When I was a little kid, we could get a 55-gallon drum and go to the river and get our water. We could dig a hole and use it as an outhouse. Then the government said you can't do those. I don't understand why the government can't come back and help us on prices."
Audience member Kasey Correia added, "Mr. Atencio and I have rental properties. We provide affordable housing for (people who work at) the grocery store, the tribe. When (utility) rates go up, we have to lower our rents. I have a heart. I can't gouge people. It's not affordable. ... I care about the community. There needs to be some long-term plan." The sewer rates are already outrageous, she said.
Bernadette Lopez said, "I'm not on a limited budget, but I agree. You are nickel and diming us to death. You can have affordable housing, but with these rate increases... Trash was increased and the service is still appalling. I try to watch my water, but it's hard to stay under 3,000 gallons. It's hard for us to come up with the $155 for water, sewer, trash, irrigation. We watch everything. Either sever the ties with the tribe or renegotiate the contract. Young people aren't going to come here to live. The rent maybe is affordable, but the utilities will put a major dent in that" affordability.
Lopez said her January utility bill was $247. Mayor Stella Cox said her bill used to go down from March to October, but now it doesn't.
"They are trying to run us out," Atencio said.
An elderly audience member complained, "A lot of us are on fixed income."
New Interim Town Manager Mark Garcia said he didn't have the rate increase resolutions ready. He recommended to not raise the water, sewer and gas rates and to do more work on the agreements with the tribe. "I have a background in rate analysis. I think we can have a good discussion with the tribe. We have fund balances in water and sewer that can offset the increases. It won't bankrupt us, but it will hurt us financially."
He continued, "On the water agreement passed in 1998, it says the tribe will set rates every three years based on a rational nexus, but they are raising it every year based on the (consumer price index). The sewer agreement was signed in 2009. It's 15 percent a year until 2015 and then goes to the CPI-U. I think it's time to revisit that. Our (sewer) rates are probably the highest in the region."
The tribe reduced its sewer rate increase to 4.5 percent in October 2013 to leave room for the town to do its own rate increase and stop operating losses.
The gas price is based on an index plus 20 percent, while the town charges a fixed rate per mcf, Garcia said. "When gas prices go up, we'll have to look at that," he said. He mainly wanted to look at the water and sewer rates.
Trustee Tom Atencio noted the sewer rate increase last fall was 4 percent instead of the 15 percent. "The water is consistently going up," he said. "Pass along, pass along. One problem of not passing it on is we will fall back into where we were five years ago in the red."
He doesn't want a big rate increase in three years instead of smaller annual increases. "We need to talk to the tribe. The more we wait, the more it will cost our pocket. I feel good about being able to absorb this, but I'd hate to see it go more than six months."
Mayor Cox noted the town had its own 5 percent sewer rate increase last winter in addition to the pass-through increase from the tribe.
Tom Atencio raised the idea again of the town having its own sewer plant. "If we can't come up with a solution with the tribe, start looking at a sewer plant. I'd love to stay with the tribe. They have state-of-the-art equipment. They know what they are doing. But you can only do this for so long."
Trustee Dixie Melton commented, "If we never raise anyone's rates, we're in the red again. I feel like we're between a rock and a hard place. (The tribe) built a sewer plant for X number of people. That's what we need to talk to the tribe about, to only pay our share, not the whole sewer plant."
Tom Atencio said he tried to get more community members to the meeting. "If the people don't show up, I don't feel bad about passing it on because you don't care, but I do care, and I don't want to pass it on." He noted that none of the pass-through increases from the tribe come to the town.
The town did impose its own water and sewer rate increases for 2013 and 2014, in addition to the pass-through increases from the tribe, to shore up finances in those funds.
Garcia said he'd initiate talks with the tribe. "In four to six months we may need to raise rates," he advised.
