IGNACIO – The Ignacio Town Board proposed a new water and wastewater utility rate structure as Ignacio residents pushed for clarity on upcoming rate increases during town hall and board meetings.
Ignacio has been grappling with how to handle a recent water and wastewater utility rate increase from the town’s water provider, the Southern Ute Utilities Division. The town board has considered another water provider, and it is still considering building its own wastewater treatment plant. The Sept. 16 and 17 meetings, however, were a whirlwind of tensions, questions and concerns.
“It’s obviously not going well,” said trustee Allison deKay. “I really feel like we are blocked at every turn and every idea legally for one reason or another.”
In an executive session, the Ignacio board created a new rate structure that ties water and wastewater usage to charges more closely than in prior years. If approved, customers who use less water and wastewater would see lower rates than in the past, just as those who use more will see their charges increase.
Also, the director of the Southern Ute Growth Fund, Shane Seibel, visited Ignacio’s Town Board meeting – one of few Growth Fund representatives to meet with the board, according to board members – and offered to give the board behind-the-scenes information about the tribe’s utilities. The Growth Fund manages SUUD.
At the community meeting, the town board shared a proposed rate structure that would set rates by 1,000 gallons of usage, rather than the current structure, which has a lump charge for the first 3,000 gallons.
Rates for customers will stay the same until January, even though the SUUD rate increases go into effect Oct. 1. The town will pass those charges onto customers and the town’s rate increases at the same time.
“There are restaurants paying too much and others paying too little,” said Mark Garcia, interim town manager. “Overall, it seems like the wastewater will decrease overall, except for some customers.”
If the town’s proposed rate structure passes, water customers who use 1,000 gallons or less per month would see their charges drop by less than 3%. All other water users will see their rates increase, regardless of water usage.
For wastewater users, the savings would be larger. Customers who use less than 3,000 gallons per month would see their rates decrease. Those who use less than 1,000 gallons would see their rates cut by the largest amount, about 51%.
Meanwhile, if customers use more than 3,000 gallons of wastewater per month, they would see higher rates. Those who use more than 6,000 gallons per month would see the largest increase, at about 54%.
“Sounds to me like conservation,” said Kasey Correia, a town resident and business owner, adding that the town could find grants to help residents assess water usage.
Only three people attended the community meeting. Still, tempers flared as frustrated residents asked board members about their budget choices and priorities. They asked about the board’s plan to help customers on fixed or low incomes and how the proposed rate structure would impact larger businesses.
Board members, similarly frustrated, tried to explain years of decisions and negotiations.
Correia and James Brown, a former Ignacio Public Works employee, emphasized that the town needed to balance its gas, water and wastewater utility funds. Ignacio has been using its gas enterprise fund to subsidize the other two funds.
For Brown, another main concern was the water loss charge in the town’s proposed rate structure. If approved, customers would be charged a 10% water loss factor in both wastewater and water utility rates.
“That should be the cost of doing business,” he said.
Ignacio’s piping system is about 50 years old, Garcia said. It runs with 20% water loss, which is slightly higher than average.
Garcia said the 10% loss is part of the policy, so the town built it into the rate structure. The town also found a large leak that should decrease that loss factor and is prioritizing finding other leaks in the system.
The board said it cannot fully justify the increase to customers because of the lack of information coming from the tribe.
The contract between the town and the tribe said that the tribe had to justify rate increases, said Trustee Tom Atencio. He said didn’t remember seeing that justification.
“I’m asking you, can you get us some of that (information)?” Atencio said, speaking to Seibel at the town board meeting.
Regarding the tribe’s sewer rates, Atencio said the sewer treatment plant was built for 5,000 customers. The area’s population is about 2,000 people.
Seibel said he couldn’t go into any particulars on the sewer plant, itself, but acknowledged that the facility was built with the expectation that subdivisions, like Tranquillo Court and Rock Creek, would fill with new residents.
“We anticipated growth and it didn’t happen,” Seibel said. “I will give specific information on why the sewer rates are increasing.”
The town has not yet received information from the tribe, but it is in discussions in advance of receiving such information, Garcia said.
Seibel also emphasized open communication, the high-quality facilities and utilities offered by the tribe, and the fact that everyone – including tribal members, businesses and Seibel himself – is being impacted by the rate increase.
“We’re all in it together,” said Trustee Dixie Melton. “I don’t know if there’s a solution in it for all of us, but if we could work together to find that, it would be great.”
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Ignacio residents raise concerns, questions
The town of Ignacio held a community meeting Sept. 17 at Town Hall to address water and wastewater utility rate increases residents must begin paying in January. Residents asked questions about the town’s utility structure and town officials provided answers.
Q: The town did not pass on the tribe’s 2018 rate increase to customers. Now, customers are paying for a “triple-hit,” the tribe’s 2018 and 2019 rate increases and the town’s 2019 increase. Why didn’t they pass on the 2018 increase?
A: The town was in rate negotiations in 2018, said Ignacio town Trustee Allison deKay.
Q: The town adds on its own charges to the tribe’s charges. How is that money spent?
A: Salaries, trainings, benefits, operating costs, water loss factor and small capital replacement to fill the utility fund for future projects, said Mark Garcia, interim town manager.
Q: The town has used the gas utility enterprise fund to subsidize the water and wastewater utility funds. Why?
A: Gas fund reserves have covered matches on grants, debt payments and the costs of not passing on water and wastewater utility rate increases to customers. No gas funds have gone into the general fund, Garcia said. “We anticipate gas rates will go down.”
Q: What is your long-range plan, especially to help residents who can’t afford the rate increases?
A: The town started the rate analysis to address that problem. The board changed the rate structure to better accommodate people who use less than 3,000 gallons. The town is not currently applying for grants for residential assistance, board members said.
“It has led us to this point,” deKay said. “Your thoughts really and truly have been our thoughts for years, and it’s been hard. At this point, we are not at a solution. We are looking at ideas, but it’s not going well.”
