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The Cedaredge Town Board on Jan. 17 adopted new, higher residential water rates and added a new $6 charge to monthly water/sewer billings.
The plan also includes higher use rates that can be adopted during drought to encourage water conservation.
The town considers "high volume water users" to be those who consume 15,000 gallons or more per month. The new, higher monthly use rates will kick in at the 15,000 gallon level assessing a rate of $2.00 per thousand gallons. A $2.50 per thousand gallons rate then kicks in at 30,000 gallons or use per month for in-town customers. Rates are higher for out-of-town customers.
The monthly base charge for water is lowered from $22.10 to $18.35 for in-town water customers. However, the $6 monthly sewer charge is added in. That raises the total monthly base charge on the combined water/sewer billings, including 10,000 gallons of water, to $61.35 per month; an increase from the previous $59.10 per month.
A second rate plan, considered by trustees but not adopted, would have raised use rates even more and lowered the base water charge more. But it also would have imposed an $8 monthly sewer surcharge and lowered the base water allowance by 20 percent — to about 8,000 gallons per month.
The changes will take effect on Feb. 1 and will be reflected on rate payers' February billings. Town administrator Katie Sickles said that increases for commercial users will be coming next.
Some town officials have noted that lowering the base water charge will be a benefit to low income people who can ill-afford to pay their water bills now. Not everyone agrees.
During a Jan. 10 trustee public hearing on the new rates, one Cedaredge resident said the town was targeting the new higher use rates at the people whom it considers able to pay for the increase.
"We never said that," replied Trustee Gene Welch, one of three town board members who had arrived for the Jan. 10 public hearing.
Also, while lowering the water base charge by $3.75 per month is a decrease, the additional $6 per month sewer charge will actually raise the minimum monthly combined water/sewer billing for rich and poor alike.
Under the previous rates, people using the base amount of 10,000 gallons would pay $2.21 per thousand gallons. Under the new plan they will pay $1.83 per thousand gallons, plus the new $6 sewer charge.
The new water rate plan is based on customer usage figures for only one year — 2011 to 2012. That is because figures for actual customer usage do not exist prior to then, Sickles explained during a November water rate work session. Trustees were impressed to learn that 20 to 30 percent of the town's customers account for half the treated water use in town. That thinking, in part, prompted the trustees' decision to change rates and base charges.
The monthly base fee, town officials have often maintained, is needed to ensure a predictable income stream for use in budgeting for maintenance and operations of the water utility. By lowering its base fee structure for water and hoping to replace the lost income with higher use fees on some customers, the town has embraced a new philosophy on utility accounting.
The new rate scheme lowers the water base fee and replaces the money with higher charges for use. Water customers can cut back their use to conserve, and that can lead to less reliable income for operating the utility. Were that to happen, rates and charges could always be raised again at a later time.
The town is facing the construction of an estimated $3.5 million sewer treatment plant. The price of land to build the plant on and other costs of construction could run that price significantly higher. The need to raise money to pay for that plant is driving the addition of the $6 monthly charge.
The 2013 budget for Cedaredge shows the sewer fund posting a deficit. Gone are days when the sewer fund was considered the town's "cash cow" that generated excess funds available for use on other town needs.
Mayor Pat Means said that the $6 sewer charge will raise $280,000 in three years. Town officials are hoping for grants and a number of other possible low-cost/no-cost funding scenarios to pay for the new sewer plant.
One other feature of the town's new water rate schedule is addition of a special "drought rate." Last year, the trustees adopted a plan for dealing with local drought conditions. At any such time as trustees may determine, the special higher drought water use rates could be imposed.
The purpose would be to encourage conservation, town officials have said. They add that the drought rates would be temporary so long as drought conditions lasted.
Additional money paid into the water fund as the result of imposing the higher drought rates would be earmarked for improving the town's on-mountain water collection, storage, and transport system, Mayor Means has pledged.
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