Ignacio officials have started work on the town's 2017 budget with major concerns about sewer rates and the financial sustainability of the sewer fund.
Town Treasurer Diana Briar and Interim Town Manager Mark Garcia presented the first draft of the 2017 budget to the town board on Sept. 21. That includes projected revenue and spending through the end of this year, to provide an estimated starting point for 2017.
"The good news is we are in the black," Garcia said. "We'll continue to monitor that. Overall, our numbers look solid for the year." That's for general operations.
The Southern Ute Indian Tribe provides the town's treated water, and town sewage goes to the tribe's sewer plant. The tribe raises its water and sewer rates to the town each October. Town trustees must decide whether to pass those increases on to customers. Last fall trustees opted not to pass on the rate increases.
Briar told trustees last week, "We have the new rates from the tribe: 4 percent (increase) on sewer. We included that increase in here (the draft 2017 budget) but not last year's increase. Water and sewer will end up in the negative. ... Both water and sewer end with a negative balance next year."
In-town customers have been paying $68.09 per month for a residential tap. As of October 2015, the tribe's rate to the town was $70.73. That increases by 4 percent on Oct. 1. Trustees will have to decide again whether to raise the customer rate.
Garcia said, "Our expenditures in the enterprise funds are minimal. They'll end in the red next year without rate increases." Enterprise funds for sewer and water service are supposed to be self-supporting.
Later in the meeting, Garcia presented his own analysis of how much the town pays the tribe for sewage treatment compared to the share of sewer loading into the treatment plant from town customers. Statistics are online for the plant's monthly discharge report to the state. Garcia said he did a two-year average of those. He looked at what the town was billed by the tribe for water to determine the amount of water, with the assumption that all of that ends up going to the sewer plant.
"Our flows equate to 22 percent of total flows to the sewer plant," Garcia said. But the tribe's sewer billing to the town based on Equivalent Residential Taps (250 gallons per day) equates to 43 percent of total flows. "We're being charged for way more than what we are flowing" into the sewer plant. That difference amounts to $12 on a customer's monthly bill, he said.
"We're just paying for treatment. It's fairly obvious we're overpaying a significant amount," he said. He doesn't think the tribe's rate for water is off like that, but he wants to do that analysis too.
Garcia suggested a board committee to work with staff on utility rates. "Once we determine if we're going to raise water and irrigation (another enterprise fund), we'll get that passed. The sewer rate will be a deeper discussion. I haven't seen any data from the tribe (to justify the increase). The next step would be a formal letter requesting information."
He noted the town board is scheduled to meet with the tribal council on Oct. 20 at Sky Ute Casino. The town board's next regular meeting is Oct. 19. The town will hold a hearing on the 2017 draft budget on Oct. 5 at 6:15 p.m.
Trustee Tom Atencio said, "As a board, we need to sit down and discuss this... This is becoming a problem. These figures are eventually going to eat us up... If we aren't getting any cooperation from the tribe, it's going to get bad. Discuss it as a board, not a committee. This $70 (a month) we pay for sewer is ridiculous."
What will it be up to in five years, he asked. "We can't live that way. It's our responsibility. We're the ones who were elected by the public to do this, not keep saying it will get better next year," he said.
Mayor Pro Tem Alison deKay agreed. Trustee Dixie Melton added, "If we're looking at $83,000 in the hole at the end of 2017, that's not acceptable to me."
Garcia reiterated the idea of a formal letter to the tribe's utility division "requesting prior rate analyses and asking for some cooperation." He suggested asking for a response by Oct. 12.
Atencio responded, "I don't think that will hurt, but what we've gotten from the tribe so far is very little. I can't afford it. I know there's a lot of people that can't."
The town can't afford to absorb the increase either, Melton said.
In other action last week, Briar and Garcia continued to report what they consider unacceptable delays in getting reimbursements of town sales taxes from the county. "They are over three months behind in getting checks to us," Garcia said. "It's ridiculous." He blamed the County Treasurer's Office.
Garcia advised that Ignacio Community Church, which owns the 20-acre slaughterhouse property on the hill southwest of town, is considering putting it on the market and would consider an offer from the town. It would be in the $150,000 price range. There's money in the town's economic development fund that could be used for that, he said.
Development Director Dan Naiman said, "This piece of land is critical for the town's future growth. Half is developable, half is flood plain. It's where I've been looking to extend (County Road) 320B" to provide a new route onto the west hill.