Water rate increase proposed

City sees jump in operational, maintenance costs

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Craig residents will see a 4 percent increase in water and sewer rates if an ordinance introduced at Tuesday night's council meeting passes.

Both departments have experienced increases in operations and maintenance costs, which is why City Manager Jim Ferree said a rate change is needed.

A 4 percent increase means city residential rates will increase from $14.80 to $15.60 a month and $1.60 per 1,000 gallons of water instead of $1.56. Out-of-city residents will pay $31.20, up $1.60 for water service and will see the same increase for the cost of water.

Wastewater rates will increase to $14.10 a month, up from $13.55.

The last increase was in 1997 when rates went up $2 per month for city residents and $4 per month for county residents.

Ferree said operational costs in the wastewater department are up 7 percent over last year and up 10 percent in the water department.

"That's fixed costs and repair and maintenance," he said. "If we're going to have these increases in costs, it makes sense to try and raise rates to keep the pace with inflation."

Water department expenditures for personnel, services, supplies and fixed charges increased from $1,128,274 in 2001 to $1,204,200 in 2002.

Revenue from fees increased by $127,010.62, but is budgeted to decrease $2,450 in 2003.

Wastewater department revenue from fees is flat from 2002 to the 2003 budget and increased $4,000 from 2001 to 2002. Expenditures for personnel, services, supplies and fixed charges are budgeted to increase from $682,060 in 2002 to $705,540 in 2003.

Council members began discussing a fee increase during their budget session in October. At that time, an annual increase was suggested. Mayor Dave DeRose suggested rates increase by the cost of living plus another 1.2 percent "because (City Councilor) Don (Jones) made a good point. The cost of gas is higher here than it is in Denver," he said.

The city is planning a $6 million expansion of the water plant in 2006 and hopes to bolster revenues now to decrease the debt load needed for that project.

"Customers need to cover some of the debt load of adding on to the water plant," DeRose said.

Councilor Tom Gilchrist suggested the increase be based on the increase in operational costs as opposed to a cost of living increase.

The water and wastewater funds are enterprise funds, which means they generate revenues from fees instead of tax dollars. If needed, tax dollars can be used to subsidize enterprise funds, but enterprise fund revenue cannot be used in the general fund.

The wastewater department has $592,019 in reserves plus a $72,295 carry over money that was budgeted in 2002 but not spent. The water department has $2,138,721 in reserves plus a $203,130 that was budgeted this year, but not spent.

Those reserves are for big-ticket items, such as new water tanks, and the start of savings for the plant

expansion project.

The council will hear the first reading of the ordinance at its Jan. 8 meeting and the second reading Jan. 22. If approved, the increased rates should go into effect by March 1.

In other business, the council:

  • Approved a special event permit for a Rotary Club dinner and dance on Jan. 25 at the Moffat County Fairgrounds Pavilion.
  • Voted unanimously to waive the formal bid requirement for ramps at the city's skate park. Craig Parks and Recreation Department Director Dave Pike said the existing park amenities are made to connect to others by the same manufacturer, who was the low bidder two years ago when the original equipment was purchased.
  • Heard an update on community health issues. The county's part-time health inspector should be ready to begin restaurant inspections after the first of the year and the Visiting Nurse Association is working on a plan for mass small pox vaccinations should they be necessary. Both will go before the city council again with an update as planning progresses.
  • Approved a request to purchase a CAT 140H motor grader from Wagner Equipment for the Road and Bridge Department for $146,256.50. The total cost for the grader is $194,256.50. CAT will give the city $48,000 to trade-in its 1980 CAT motor grader.
  • Agreed to hold a workshop before its Jan. 22 meeting to discuss giving local bidders preference on city bids. Council members will look at ordinances from other cities and work out definitions for their own ordinance. After that, the ordinance must be approved on a first and second reading before it goes into effect.

Christina M. Currie can be reached at 824-7031 or ccurrie@craigdailypress.com.

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