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Town of Ignacio is collecting more sales tax, but failing to cover sewer costs

Board to consider raising fees at a meeting next month
The town of Ignacio is seeing more sales tax, but is not collecting enough to cover sewer costs. (Jerry McBride/Durango Herald file)

An increase in sales tax revenues and losses in the town’s sewer fund were two of the primary items discussed at a budget work session Monday for the town of Ignacio.

Sales tax revenues are expected at about $500,000 for 2021, up from $456,000 in 2020, said Tuggy Dunton, the town clerk.

The town’s share of the county sales tax will be more than $1 million this year.

“Sales tax is increasing, but we’re assuming it will start to level off,” Dunton said.

While the sales tax bump has been welcome during the past two years, the town’s sewer fund will end the year $88,000 in debt, said Mark Garcia, the town’s interim manager.

“We’ve attempted to hold rates down, but they’re too low,” he said.

Trustees agreed to transfer $88,000 from the town’s general fund to cover the shortfall, but they agreed that rates for sewer service should cover the costs of the service.

The town will hold a public hearing about increasing sewer rates at its Dec. 13 meeting, when the town board is set to finalize its 2022 budget.

The town is expected to finish 2021 collecting $475,000 in sewer fees, while paying the Southern Ute Indian Tribe $387,000 for sewer treatment.

There might need to be an increase in irrigation rates of $1 to $2 per month to cover costs, Garcia said.

Overall, the town plans on almost $2.3 million in revenues for 2022, with a little more than $2 million in expenses, according to the draft budget.

The separate enterprise funds for water, gas, sewer and irrigation are expected to bring in $1.2 million in revenue next year, with $1.1 million in expenses.

After some discussion, town trustees said they want town employees to receive a 4% raise in salaries, with a 1% increase in employee plans covering wellness, retirement and health insurance.

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