In order to address citizen concerns over an initial proposed increase in water rates that would have doubled commercial user base rates, Paonia trustees changed course during the Nov. 17 special budget work session, proposing an across the board base rate increase of $6, along with increases in volume usage.
Increases are needed to cover debt services and to continue covering fixed costs of operations, said town manager Jane Berry. A 2014 increase of $5 per customer was necessary to cover debt service related to state-mandated water filtration systems upgrades, but covered less than half of what was needed for the roughly $197,000 in annual payments.
In looking at how the $6 increase would affect users, trustee David Bradford pointed out that the fee hike would affect in-town residential users most. "That makes me somewhat uncomfortable," said Bradford. In response to public complaints of a lack of fairness in the town's rate structure, he suggested a 28 percent base rate increase for all of the 1,500 water accounts, which reflects the percentage increase to in-town residential users on a $6 increase. Of the four categories of users -- in-town and out-of-town residential and in-town and out-of-town commercial, in-town residential users currently pay the lowest base rate of $21 per month.
Trustees were largely split over the issue, with Eric Goold favoring a $6 increase and Ross King agreeing with Bradford on the percentage increase.
Mayor pro tem Charles Stewart reminded the public that the increases represent a temporary fix while the town awaits completion of an independent rate study after the new year. No final decisions were made regarding rate increases.
Out-of-town resident Jere Lowe expressed concern over the language in the ordinance and the potential passage of a document that he argued is replete with faulty language. Trustees and Berry stressed that the meeting was called to address water rates, which need to be established prior to passage of the 2016 budget, and that the specifics of the language can be discussed and adopted at a later date.
Adi Vongontard, also an out-of-town user, said the proposed increases are "vastly superior," and more logical and equitable than the original proposal, which would have doubled rates for business users and increased out-of-town residential customer rates by almost 50 percent.
Increases in per-gallon volume usage rates are also on the table, although they were not discussed at length during the meeting. Regarding those increases, Ron Rowell, owner of Paonia Laundry Cleaners, urged the town to consider the businesses that will be affected most by such increases, including his business and Paonia Care and Rehabilitation Center. Rowell said the proposed $5.50 per thousand gallon cost of 100,001 or more gallons from the current $4.00 rate could kill businesses and believes in raising the base rate over the volume usage fees. He told the town that his business provides a service, and if people don't come to his business for that service, they will use the water at home, for which the town will charge the lower volume rate. He said the proposed increase in volume usage is creating a 70- to 75-percent increase in his water costs. "If you think more water use means more profit, you're wrong," he told the board.
Under the revised proposal, a $100 administrative service and capital cost fee for each of the 32 water companies serviced by the town will be negotiated on a per-case basis.
Due to ongoing problems with the aging water delivery system, including more than 90 water main breaks this year, Berry is recommending to trustees that no taps be sold out of town until major upgrades can be accomplished.
According to town clerk Corinne Ferguson, in 2007, a significant water leak was discovered with the town's half-million gallon tank. At that time, the tank was taken off line and an emergency ordinance established a moratorium on sale of out of town taps until storage could be increased. In 2010, after it was determined that the existing 2 million- and 1 million-gallon tanks could handle the demand, the board voted to allow the sale of up to eight out-of-town taps on a case by case basis, with each sale requiring a majority vote of the board. That ordinance remains in place.