Sanitation district rejects billing proposal

Board members fear hybrid system looks like ‘making up our own numbers’

Board members from the Cortez Sanitation District held an hour-long discussion last week about altering its current rate structure, only to send the plans back to the drawing board.

The greatest source of concern was whether to use American Water Works Association (AWWA) or Colorado Department of Public Health and Environment (CDPHE) models when adopting a future billing system for sewer rates. Both models help utility providers evaluate and select water rate structures, fees, charges and pricing policies.

Commissioned by the Cortez Sanitation District (CSD), a 2013 rate study prepared by Gunnison-based engineering and surveying firm SGM was presented to board members in June. The 22-page study suggests utilizing both models in determining a Cortez-specific hybrid billing system for its non-residential customers. SGM engineer Tyler Harpel said a hybrid model could better reflect actual customer usage rates in Cortez.

Yet, the SGM rate study has its limitations. After taking over billing operations from the City of Cortez last fall, CSD officials still remain unsure whether they are properly billing all of the district’s customers. To remedy the lack of data needed to prepare the study, SGM officials attempted to contact the CSD customers in question, but were only able to reach about half of those users. That “raw data” creates confusion, Tyler admitted, saying incomplete CSD billing data makes comparisons difficult.”

“As you see, we have to come up with some of our own numbers for the study,” Harpel told CSD board members last week at their July meeting.

Under the SGM plan, Harpel explained the AWWA model, based on square footage, was implemented in the rate study for auto shops, for example, and the CDPHE model, based on capacity, was applied for restaurants and barbershops.

Desiring a fair billing system for all customers, CSD board chairman Dave Waters was adamant against a hybrid billing system. He fears mixing the two models to develop a new rate structure could be perceived by customers as “making up our own numbers,” he said.

Board members agreed and instructed Harpel to appear at CSD’s August meeting with plans showcasing how the numbers pan out under each model separately.

“We can do that, but you’re going to have some customers, mainly hotels, whose rates are going to more than quadruple,” Harpel told CSD board members.

Using the district’s own faulty data, board members anticipate crunching the numbers with both rate models to ensure the 4,381 residential, commercial and governmental users are billed fairly. If rate numbers need to be adjusted, then across-the-board rate decisions would be made prior to adopting any future rate schedule, Waters said.

Currently, the district’s monthly rate structure is a mix of flat rates for single-family residential users and water consumption-based rates for commercial users. Single-family residents and churches pay a flat $30 fee per month, for example, and all other users are charged a base fee of $27 per month plus $3.50 per 1,000 gallons of water used above 3,000 gallons.

CSD budget projections call for nearly $1.8 million in revenues from user fees in 2013. Residential users are expected to fund approximately half of this year’s total revenue, shelling out more than $930,000 in sewer fees.

Aging infrastructure

During the discussion at last week’s meeting, board member John Stramel reminded officials that any new rate system should include proper budgeting for future improvements. CSD officials project $500,000 is needed annually to help adequately maintain the district’s aging sewer lines.

“The amount we want to bill, fairly and equally to everyone, should equal our annual budget plus an additional $500,000 for capital improvements,” Stramel said. “We have a lot of lines that need to be addressed.”

CSD began installing its public sewer system in 1952. Those aging lines need to be aggressively targeted, Stramel argued, pointing out that replacement of outdated lines costs less than repairing damaged ones.

The 2013 CSD budget allocates $85,000 for sewer line maintenance, a $40,000 decrease from 2012. Budgeted sewer line construction increased $100,000 from 2012 to $250,000 this year, and point repairs to sewer lines also doubled from the previous year to $60,000 in 2013.

CSD Manager Tim Krebs said negligent upkeep and improper budgeting in past years now places the district’s infrastructure at a disadvantage.

“This would require me to grade a D to a D- for the collection system,” he said. “The biggest problem the district is currently facing is aging sewer lines and possible future capacity problems if not replaced.”

The Cortez Sanitation Department is responsible for maintaining more than 60 miles of sewer lines. The current infrastructure is made up of approximately 26.2 miles of clay pipes, 17.4 miles of asbestos concrete pipes and 22.3 miles of PVC pipes.

According to CSD reports, the clay pipes utilized in Cortez sewer lines are believed to have been installed starting in the early 1950s. The largest problem associated with the three-foot sections of clay pipe arises at their joints, Krebs said. Over time, the joints become non-water tight, allowing for root intrusion, he explained.

CSD reports asbestos concrete pipes were the next technology to land underground in Cortez, dating back to the 1960s. No longer used in new construction due to long-term health implications, Krebs said asbestos concrete pipes fall victims to hydrogen sulfide. Asbestos will crumble over time when high levels of hydrogen sulfide are present, he explained.

PVC pipe was put into use in Cortez starting in the late 1970s. That still remains the best option on the market for new construction, Krebs said, adding that if they are installed correctly, few problems are associated with PVC pipes.

Krebs said CSD officials now are diligent in maintaining the current infrastructure system, which includes annual pipe cleaning, cutting roots and aggressive point repairs.

According to a 2010 American Society of Civil Engineers report, much of Colorado’s wastewater infrastructure was built after World War II. If infrastructure improvements are ignored, the report predicts significant degradation to quality of life and the ability to compete for business and enterprise. An estimated $1.5 billion is needed across Colorado over the next 20 years for wastewater infrastructure, according to the report.

tbaker@cortezjournal.com