Water rate study results presented to Craig City Council
September 27, 2018
CRAIG — Raftelis, a utilities consulting firm, gave the Craig City Council a presentation about a recent water/wastewater rate study during the council’s regular meeting Tuesday, Sept. 25.
Raftelis manager Todd Cristiano said the study’s objective was to help develop a multi-year financial plan the city can maintain for at least five years. The plan should be able to help cover maintenance costs, fund capital projects, and maintain rates that are able to recover costs.
Cristiano said there are some state loans for which the city is qualified to apply. The term of such loans are about 20 years, and they carry little to no interest rates. These loans are only given to disadvantaged communities, Cristiano said, and this is something the city could consider.
Impacting the city’s water rates are low user growth, increasing operation and maintenance expenses, and inflation in general, Cristiano said. Water rates revenue funds approximately 36 percent of the water department’s five-year capital improvement program, which is $2.9 million. The rest will be funded by a $2 million grant fand a $3.2 million loan.
In terms of wastewater, Cristiano said approximately 26 percent of the five-year plan is funded by wastewater rate revenue. The remainder is funded by a $1 million grant and a $1.8 million loan, according to the study.
An annual increase of 2 percent in water rates and 3 percent in wastewater for five years — from 2019 to 2023 — would help increase revenue and meet the increasing cost of maintenance and operations, Cristiano reported.
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Without these increases, Cristiano said, the city will barely exceed its reserve targets and might not be able to begin large projects in 2024 and beyond.
Currently, the fixed rate charge for water is $28.50, with a volume rate per gallon of $2.90 for city residents. With the 2-percent increase, the fixed rate charge would increase to $29.07, and the volume rate per gallon would increase to $2.96. For those living outside the city, the fixed rate is $50, with a volume rate per gallon of $2.90. Under the changes proposed by the study, those rates would increase to $51 and $2.96, respectively.
Wastewater would also retain the same rate structure, Cristiano said, with a fixed monthly charge for both residential and commercial. Current rates for residential and commercial are $31. With the proposed 3-percent increase, that rate would will go up to $31.93.
Currently, the average bill for both water and wastewater is $85.60 per month in summer and $71.10 in winter, Cristiano said. With the increase, the average combined bill would increase by about $2, but Craig would still have one of the lowest water rates in the region, behind Steamboat Springs and ahead of Gunnison.
In other business, the City Council:
• Approved a renewal of liquor licenses for Loadout Liquors and Walmart. Ponikvar noted there was no cause for denial in either case.
• Approved a special events permit for a beer garden for Downtown Business Association’s Octoberfest, set for Saturday, Oct 6 at Alice Pleasant Park.
• Approved a special events permit for Yampa Valley Friends of the NRA event, set for Saturday, Oct 6, at the Boys & Girls Club.
• Approved a special events permit for Northwest Colorado Arts Council’s community art show, set for Friday and Saturday, Oct 5 and 6, at 80 East Fourth Street.
• Approved a bid of $11,659 from Grainger Industrial Supply for a replacement motor at the wastewater treatment plant. Water department manager Mark Sollenberger said the current motor has been in service for 35 years and would cost more to repair than to replace. Other bids were from Denver Electric Motors for $12,700 and Integrated Power Services for $16,940.
• Approved a resolution to oppose Proposition 112, a setback requirement for oil and gas development. Ponikvar said the proposition will hurt five counties, including Moffat County, which depends on oil and gas development.