FOREST LAKES – Water and wastewater rates have taken center stage in the Forest Lakes Metropolitan District as the board of directors considers budget priorities for 2020.
Forest Lakes, the largest subdivision in Southwest Colorado, has not had a rate adjustment since 2014. Residents of the neighborhood 6 miles north of Bayfield have the lowest rates in the county, according to the district’s analysis. Big potential expenses and out-of-balance fund accounts might cause those rates to change.
“Right now, it looks like we’re upside down,” said Tony Schrier, board president. “So we need to change that.”
The board of directors plans to spend $20,000 in 2020 to hire a consultant to conduct a rate study, one clear way to determine if an adjustment is needed. The district is also exploring less-expensive options.
The rate study would review the rate structure, mill levy, historic financial and use information, balance sheet obligations, equipment and planned improvements. From that information, a consultant would give the district a five-year cost estimate, which would be compared to expected revenue from the current rate structure.
Schrier said that other board members generally seemed to agree that sewer and wastewater were “hot issues.”
Brien Meyer, board member and treasurer, said water and wastewater fund account balances were one key indicator that rates could change. In August, the funds overspent yearly earnings, with four months left in the year.
“When you put those two pieces together, it appears that there might be a reason or at least an indicator to increase the rates,” Meyer said.
The water fund spent more than $269,000 in the first eight months of the year, about $84,000 more than its earnings. The sewer fund had spent slightly more than $212,000, overspending its earnings by about $110,000, according to the district’s budget report at the meeting.
The district could also be looking at wastewater treatment plant upgrades in the future, which could cost as much as $5 million.
The state has not renewed the district’s wastewater permit. The new permit would likely contain new nutrient level requirements, according to the board packet. The district would have to complete upgrades if the district’s wastewater plant is unable to meet the new standards.
To prepare for the regulatory changes, the district reserved $30,000 in the budget to create a planning document. The district would hire an engineering firm to analyze options and provide cost estimates and potential funding/underwriting information. The district report said this is the first step in any state or federal grant or loan application process.