The Town of Ignacio is proposing to raise water and sewer rates to its customers. The town will hold a public hearing on the increases at 7 p.m. on Wednesday, Nov. 16 at the regular town board meeting.
The town buys these services from the Southern Ute Indian Tribe, which raises its prices to the town each October. The current four-percent increase would be passed to town businesses and residents, effective Jan. 1, 2017, if trustees approve them.
In addition, the town proposes to pass on the tribe's water and sewer increases from October 2015 that weren't passed on to town customers. The town absorbed those increases. At the Sept. 21 town board meeting, it was stated that residential sewer customers have been paying $68.09 a month this year, while the town's cost has been $70.73 per residential tap. The $68.09 includes $56.27 for the tribal rate (no pass-through of the tribe's increase in Oct. 2015) and $11.82 for town expenses.
The town proposes a total 8.7 percent sewer rate increase to cover the tribe's increases this month and October 2015.
The water and sewer systems have been operating in the red this year. They are supposed to be self-supporting. Through the end of August, water fund expenses were $12,693 above revenue, and sewer fund expenses were $24,423 above revenue.
Without rate increases, the funds will have a negative balance at the end of 2017, Interim Town Manager Mark Garcia and Town Treasurer Diana Briar told trustees on Sept. 21 when they presented the first draft of the 2017 budget.
Garcia told the Times this week, "In the draft budget, we asked what (trustees) would like to see for increases. They gave direction on that. They haven't taken formal action."
They discussed it at a work session on Nov. 2, including whether a rate increase should include something beyond the tribal increases to cover some of the town's line operation and maintenance costs. "They opted not to include that at this time," Garcia said. The town has sent a letter to its customers outlining the proposed new rates and advised that the increases still don't cover all the town's costs.
As proposed, sewer rates will go from $68.09 to $72.99, reflecting $61.16 for the tribal charges and continue at $11.82 for town expenses.
Utility rates, especially for sewer, have been a very sore point for town officials for many months. At the Sept. 21 board meeting, Garcia told trustees that his own analysis showed that town customers account for 22 percent of loading into the tribe's sewer plant, but the tribe's billing to the town equates to 43 percent of total flow. It amounts to $12 on a customer's monthly bill, he said.
"It's fairly obvious we're overpaying a significant amount," he said then. He sent a letter to the tribe in early October seeking data to justify the sewer rates.
The town board met with the tribal council on Oct. 20, and this was one of the main things town officials wanted to discuss. "Nothing really came out of it in terms of rate analysis," Garcia said. "Our agreements have rate provisions, but no provisions to conduct rate analyses. We've asked them to do that, and they haven't been forthcoming."
Southern Ute Indian tribal officials did not respond to requests for comments on the issue.
