Cortez Sanitation District shelves rate study for now

Friday, Aug. 16, 2013 12:18 AM

Some Cortez Sanitation District customers could see their rates double, or even triple, when a new rate structure is adopted next year.

CSD board chairman Dave Waters issued the warning of potential rate increases at the board’s monthly meeting on Monday. He said exact billing spikes remain unknown, as officials have placed a $20,000 engineering rate study on hold to allow CSD officials more time to properly collect current billing records.

“In order to acquire enough data, it’s going to take some time,” said Waters. “We need this done right.”

Described the process as long and drawn out, district officials said they hope by November to have revised billing figures, which would then be turned over to SGM, a Gunnison-based engineering and surveying firm charged with designing the district’s new rate structure. The delay is expected to increase the final price tag of the rate study, said CSD district manager Tim Krebs Jr.

CSD took over billing operations from the City of Cortez last fall, but district officials still remain unsure if they are properly billing all of its customers. For example, district officials are still trying to determine how to properly bill a combination gas station, convenient store and car wash enterprise and whether or not to charge multiple businesses located under one roof individual or collective sewer fees.

“We want accurate information, so the (new) rates given will be fair and accurate,” Krebs said.

CSD has not only hired a temporary worker to enable current staff more time to collect accurate billing data, officials have also toured multiple businesses to best determine proper billing protocols.

“We’re working to get all of our ducks in a row,” said Krebs.

Current CSD billing rates are at or below average compared across the state and the country, Krebs added.

Once the new data is collected, SGM will plug in the numbers to better assist district officials on a new rate structure. CSD officials plan to use the SGM rate study to compare how billing figures shake out using both American Water Works Association (AWWA) and Colorado Department of Public Health and Environment (CDPHE) billing models. Both models help utility providers evaluate and select rate structures, fees, charges and pricing policies. The AWWA model is based on square footage, and the CDPHE model is capacity based.

Prior to collecting the most recent data, SGM was forced to rely on previous faulty figures and, in some cases, create imaginary statistics when they first presented the rate study to CSD officials in June.

“As you see, we had to come up with some of our own numbers for the study,” SGM engineer Tyler Harpel told CSD board members last month.

The initial 22-page SGM rate study recommended the district adopt a Cortez-specific hybrid billing system, but district officials flushed the measure, citing customers could perceive the plan as arbitrary.

CSD services nearly 4,400 residential, governmental and commercial customers, and projects to rake in nearly $1.8 million in revenues this year.

Before adopting a new rate schedule, CSD officials said a public hearing would be held.