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Paonia moves ahead with water ordinance, rate hike

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Paonia water customers can expect to see an increase in their utility bill beginning in March. At the Jan. 10 board meeting, trustees approved a 2-percent increase in water user fees and base rates. They also passed an ordinance to amend and replace portions of the existing water ordinance adopted in 2016. The ordinance approves a change in the town's longstanding policy of adopting water base charges and user rates by ordinance to allow for adoption by resolution. The ordinance and resolution passed by a 4-2 vote.

Town attorney David Marek said he made all the changes in the ordinance requested by trustees at the last meeting, and checked on the legal issue of whether the town can set rates by resolution. "The town can set rates by resolution," said Marek. "An ordinance can authorize that. It's done throughout the state."

Marek also made adjustments to the section on late fees, which were deemed inconsistent with state statute, and which Marek found were addressed twice in the draft. "Other than that, I think the ordinance is fine," he said.

Trustees Bill Brunner and Suzanne Watson cast the dissenting votes. Both have repeatedly stated that increasing rates by resolution makes it too easy to adopt higher rates and leaves the public out of the process.

Watson called the ordinance "very flawed." If rates are adopted by resolution, "This ordinance is going to go into some dusty volume, and unless someone forces it on the agenda, they and we'll probably never have an opportunity to revisit it again," she said.

Brunner is critical of the rate hike on the heels of a 28-percent increase in usage charges and increases in base rates that that took effect in December 2015. Last February the board commissioned water and wastewater rate studies with Cruz and Associates of Fort Collins, at a cost of $4,200 per study. The study was completed in September.

Brunner cited the study's comments that rate increases for 2016 and the coming five years are not needed for the town to meet its financial obligations. The study factors in an anticipated 3.5 percent "escalation factor," which measures anticipated future service and other costs to the town.

Since first appearing on the Nov. 8 agenda, when a citizen asked that it be tabled because it was election night, action on the ordinance was tabled at each subsequent meeting without being opened for public input, noted Watson. At the Jan. 10 meeting, Mayor Charles Stewart called for a vote on the ordinance without opening discussion to the public. Since passage of the ordinance was required for rate increases, the public wasn't allowed to comment on either the ordinance or the rate increases until Jan. 10, Watson told the DCI.

Ron Rowell, a longtime Paonia resident, former mayor and owner/ operator of Paonia Cleaners & Laundry, commented on the resolution and said he would have liked to have a chance to comment on the ordinance. Rowell submitted a letter calling the current rate structure "discriminatory upon heavy water users who have no choice in their usage. There's a problem here," he told the board. "You need to think about this before you vote on it."

When the town changed its billing system years ago to one of escalated charges based on usage, said Rowell, it was intended to encourage water conservation. "Yes, it does create conservation," said Rowell but it also creates a faulty rate structure. "The result is dried up lawns, because people will not/cannot pay these usage rates," for the 35,000-40,000 gallons needed per month to keep lawns green. "What do we do with the water? We send it down the river."

According to the Cruz study, the cost to deliver potable water to the tap is $1.51 per thousand gallons. The rate change increases cost per 1,000 gallons to $1.80 for the first 10,000 gallons, and to $5.60 per thousand gallons for usage above 100,001 gallons, with incremental increases in between. The escalated charges are the problem, said Rowell. "I hope you all understand how that works," he told trustees. When the higher rates kick in, "You get hammered."

Rowell said the laundry's last bill was based on a billing cycle of more than 40 days and totaled $528 for water, sewer and trash; typically, said Rowell, his bill is $180 to $220. Rowell said he doesn't blame anyone at the town, but meters need to be read every 30 days.

Basic in-town rates will also increase to $27.55 per month per residential account; out-of-town basic rates will increase to $35.70 for residential customers and to $52 for commercial customers. Annual revenue from the increases is expected to generate approximately $16,000 in additional revenue.

Rowell didn't argue that the town can use the money, but suggested increasing base rates for businesses to increase revenue.

The town claims to be business-friendly, said trustee Brunner, "and this is not business friendly."

Mayor Stewart chastised Rowell for not commenting earlier. People are getting frustrated that the issue "has been beaten to death" and that "we can't just make a decision and move on," said Stewart. Rowell attempted to tell the board it was his first opportunity and was repeatedly cut off. He has attended every meeting, and at the Dec. 13 meeting brought documents in order to state his case.

Stewart also noted that the ordinance was addressed early in 2016 when the new rates were passed. During that time, Rowell urged the town to consider the businesses that will be affected most by the 28 percent rate increases and suggested they could kill businesses. He also urged council to consider raising the base rate rather than raising volume usage fees.

"It makes absolutely no sense to me," said Rowell. It didn't a year ago when former town manager Jane Berry "pushed this thing through... I was against it then and I'm still against it," said Rowell. "This isn't right, folks."

Deborah Guyer, who lives in an unincorporated pocket in town, submitted a letter in December stating that she lives on a fixed income and without "luxuries," including cable and internet. After the 2015 rate increases, her mobile home space rent was increased "to compensate for existing water taps."

Rick Beers, a 20-year resident, told trustees his income has decreased in the past decade. While the 2 percent increase doesn't sound like much, other increases are also occurring. He asked trustees to consider "taking a good hard look at the numbers" before voting on the rates.

Trustee David Bradford, who serves on the town public works committee that recommended the 2-percent increase over a 3.5 percent increase recommended in the study, credited Rowell for raising "an extremely valid point" about the 30-day billing cycle. "The town needs to deal with that," he said. He disagreed with increasing business base rates because it would disproportionately result in higher rates for smaller businesses that use little water.

On place they disagreed with the study, said trustee and public works representative Bill Bear, was in the recommendation to "lower the rates for residents and jack the rates up for the businesses... That was the other half of the equation."

The Cruz water and sewer rate studies can be accessed at townofpaonia.com/2016-water-rate-study/

A revised wastewater ordinance and resolution to increase rates has also been before the board since Nov. 8, but was not on the Jan. 10 agenda. Some legal issues had to be settled before the documents could be finalized, Stewart told the DCI. He anticipates the ordinance and resolution will appear on the Jan. 24 agenda.

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Paonia, water and sewer rates
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