Protesting rate hikes, the owner of a local motel has threatened not to pay his latest sewer bill.
James Parks, owner of the Cortez Knights Inn on South Broadway, told Cortez Sanitation District board members Monday, March 10, that rate hikes put into place in January should be based on consumption, instead of being modeled and based on decades-old U.S. averages.
“My water bill this month was $590, and this is the slow season,” Parks said. “It’s not fair.”
During the off-season, Parks said he closes half his rooms to customers. Before the rate increase, his monthly bill averaged about $125. Parks suggested that rates be based on actual number of rooms rented, instead of being charged at full capacity.
“I do a third of the business of other hotels in town,” Parks said. “With these rates, you’re going to make us go bankrupt.”
Without offering relief, CSD board president Dave Waters informed Parks that CSD could neither manage nor make business decisions for the motel.
“Every hotel is paying the same amount per room,” Waters said. “You need to figure out how to rent those empty rooms.”
Parks dismissed the advice and left the meeting.
“I can’t control the economy,” he said.
Prior to the public comments, CSD district manager Tim Krebs suggested board members adopt an across-the-board, 25 percent rate discount for all 12 hotel customers during off-season months. The reduction would help restore rates to historical levels, Krebs said.
“A majority of the hotels are upset about the new rates,” Krebs told board members. “The term ‘class action lawsuit’ is something I’ve heard a lot recently.”
Several upset customers, including a convenience store owner and coffee shop purveyor, also complained Monday about the rate hikes. All indicated the rates hurt their bottom line.
“We need some sort of concessions from the Cortez Sanitation District,” said Cordell Shumway, owner of three convenience stores.
The Jan. 1 rate hikes were approved 3-1 in December. CSD board director Jim Candelaria was the lone opposition.
“I think the sewer rates should be based on consumption,” said Candelaria. “That would be fair.”
Before the rate change, CSD officials billed customers based on consumption, using water usage data from the city, but CSD officials say the city’s numbers were unreliable for proper billing. To have rates again based on consumption, Waters suggested upset customers lobby the City of Cortez to upgrade to a digital water meter reading system.
“We tried to base rates on consumption before, but it didn’t work,” Waters said.
Under the new rate structure, 2014 commercial sewer fees are determined based on six different classifications. While most new business rates are based on square footage, hotel fees are linked to total number of units, hospital charges are connected to total number of beds and schools and day cares are subject to total student capacity. New rates for The Cortez Journal are determined based on total number of employees.
CSD approved the rate hike after a $25,000 engineering study, which suggested commercial customers be awarded a Single Family Equivalency (SFE) ratio based on 1994 American Water Works Association guidelines. The SFE ratio is multiplied by the square footage, number of employees or number of beds, for example, which is then multiplied by $30 to determine a monthly sewer rate.
CSD expects to collect more than $2.1 million in service fees in 2014, an increase of more than $77,000 over 2013 revenues. CSD’s total operating expenditures in 2014 are projected at nearly $1.6 million.