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PAWSD moves forward with rate change process

Staff Writer

The Pagosa Area Water and Sanitation District (PAWSD) needs more revenue, and board members have unanimously decided to have Fernando Aranda, consultant for MWI Business Solutions, move forward in developing one of the options that is part of the 2012-13 rate study.

The options included in Aranda’s original presentation to the PAWSD board and considered by the directors included:

1. An across-the-board increase that would result in 50 percent of bills seeing an increase of $1.13 or less in each tier.

2. A service charge of $20 to ratepayers in all existing tiers.

3. A service charge of $20 to customers in tier one.

4. A service charge of $23.50, with an allowance of 2,000 gallons of water included in one tier.

5. A service charge of $23.50 with 2,000 gallons of water included in the base rate, using existing tiers.

At this time, the base rate in-district service charge is $14.50 for all tiers. The additional first-tier charge is $4.50 per thousand gallons from 1-8,000 gallons of water of residential use. Once a household goes over the 8,000-gallon limit, it moves to the second tier, with rates of $9 per 1,000 gallons of water for use of 8,001 to 20,000 gallons. The third-tier rate charges users $11.30 per 1,000 gallons for water use over the 20,000 gallons. In this structure, the more water a household uses, the more that household pays.

Option five increases the base rate for water service to $23.50 for every tier and retains the three-tier structure, while decreasing the addition charge for each tier to $4.22 for the first tier, $8.44 for the second tier and $10.60 for the third tier. With these base rates, there will be an allowance of 2,000 gallons of water per EU/per month before the user enters the tier structure. Users will not enter into tiers until they have surpassed the 2,000 gallons of water allowance.

Under this plan, users will pay the base rate, regardless of water use and regardless of whether they are permanent residents or part-time residents.

“Option five, providing two thousand gallons per EU to commercial property owners is, I think, it’s not my ideological favorite,” director Glenn Walsh explained, “But I think for the district and this economy and the people who try to live and work there who don’t just come visit here once or twice a year, well, I think it’s the fairest.”

The PAWSD board had hoped to move away from the three-tiered system to a single-tiered rate structure, however, weren’t able to make that change at this time. It remains a goal for the future. With the single rate structure, the base rate would increase exponentially. The directors decided that the fairest way to distribute the cost of running water and sanitation at present is through the three-tiered system.

According to Renee Lewis, special project manager for PAWSD, “It’s how much money we need to run the place, then we have to decide how to charge everyone.”

“I concur with what director Walsh said,” director Roy Vega explained. “We could go to a single tier, but right now I do not think that a single tier is beneficial for our ratepayers, especially the payers who are on a fixed income. I think the tiered structure is the better structure for the time being, so I will favor option five, as well.”

“If we decide option five, when can we revisit?” asked director Burt Adams.

“It’s at the board’s direction,” business manager Shellie Peterson said. “I mean, we can revisit it every year. Typically, you look at the cost to do so and you make that judgement. Has enough time gone by for your customers to absorb what you’ve already done and change their behavior to where the data makes any sense to revisit it?”

“So, realistically, a couple of years?” Adams asked.

“Two is pretty short,” Peterson said.

“I was looking at it with Walsh and the one-tiered system,” Adams said, “but the numbers indicate that at least for the next couple years to look at (option) five, and I reluctantly say that, but that is what the numbers show.”

“I am also reluctant, but I will have to go along with that, as well. I really wanted to strive for a single tier, but circumstances say that we may just have to put that off for a little bit. People are used to the tiered structure,” said director Allan Bunch.

“I’m OK with telling folks who own second homes here that it’s an expensive water system for you to use when you come two weeks a year,” Walsh said, “And I hope you come ten weeks and decide to move here, but the fact that you may pay a little more to me does not seem unfair rather than the folks who live and work and try to survive here so you can visit it and enjoy it.”

The directors approved the motion to move forward and present the fifth option to Aranda for completion before it is submitted as a final report.

At this time, the board has not formally said that this is the new rate structure. The next step in the rate study is to have Aranda draft the final presentation, including option five, and present it to the board. A vote will then take place to accept a rate study option, and changes in the rate structure will be implemented.

Melissa.Stedman@pagosasun.com

This story was posted on August 8, 2013.