Businesses steamed about new Hot Sulphur Springs water rates
March 24, 2009
Karen and Rob Vahling, owners of the Canyon Motel in Hot Sulphur Springs, are struggling this season with a 30 percent loss in gross sales in the last quarter and a 33 percent increase in property taxes, they said.
On top of that, they are bracing themselves for a possible 530 percent increase in their town water bill.
With the town’s new rate structure that was set to start in April, the Vahlings did the math and discovered their bill would jump from around $131 a month to $692 per month.
“The last thing we can afford to do is raise rates to make up for this, which will decrease business.” said Karen. “Our other option is to lay off loyal, local employees in order to make up in the water bill increase alone.”
As evidenced Thursday night during the Hot Sulphur Springs Town Board meeting, the Vahlings are among many business owners who find the town’s new rate formula detrimental to businesses in town.
Some fear they could go out of business if the town does not fix its water rates.
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Dee Kitchen, owner of the Ute Trail Motel, said she would not survive the new rates, which for her 10-room business, could go up to $475 a month.
The base water rate at her Hot Sulphur Springs home is increasing by around $43 a month, she said.
“Personally, as a homeowner, I don’t have a problem with that. But as a business owner, there is no way I can pay $475 a month on my water,” she said.
Addressing business members of the community ” owners and managers of the County Seat Grill, Riverside Hotel, Hot Sulphur Springs Resort and Aspen Street Mini Mall among others ” Mayor Hershal Deputy and trustees did not deny the rates should be re-examined in light of the unforeseen effect they could have on certain business owners.
Deputy suggested the town look at making adjustments to commercial SFEs, or Single Family Equivalents, on which the rate structure is based. Another idea is to incrementally make rate increases to give business owners time to adjust.
“Or, does that just put off the inevitable?” Deputy asked.
He outlined why the current rate structure was approved in the first place.
The town’s antiquated rate structure has caused the town to lose about $2,000 per month in sewer and water revenues at a time when it desperately needs money to make improvements to the system, he said.
Following two serious water breaks last year, the Colorado Department of Public Health and Environment issued a water enforcement order to the town for poorly handled monitoring and recording practices.
Since then, a quarter-million dollars in improvements to the town’s water treatment facility with automated and computerized capabilities and $450,000 worth of water treatment and sewer lagoons have been implemented, approved by the state.
The state still expects the town to implement a $40,000 gallon clear well and supply 200,000-300,000 gallons of additional town storage in a new tank. In order to do that, town officials are hoping the state comes through with a $2 million grant or loan ” the town’s chances boosted by stimulus funds recently made available.
But even if that money comes through, Deputy said, the town is still a long way from having a fully reliable water system.
“People coming to these meetings on a regular basis probably understand the severity of the problem,” Deputy said. “I don’t know how to say it more clearly; we really are on the brink of water or no water. I mean, it really is that serious, and we’re trying very hard.”
The hope was to secure funds and obtain more through agencies such as the Department of Local Affairs, but in order to do that, the town must pledge matching funds, he said. The only way to come up with monetary matches was to revamp the water and sewer enterprise rate structure, Deputy said.
“If we don’t come up with matching funds, no one is going to talk to us, period. We have to have a fixed number, so that we can base what we generate for revenue before we can ever attempt to get a loan,” he said. “We need a very predictable revenue stream.”
County Seat Grill owner Joshua Home said the town would do better charging for water based on consumption rather than square-footage, but officials said that would be too risky.
With such a rate structure, revenues are not guaranteed, they said.
Another reason town officials chose a “square-footage” template was to make it fair among businesses as varied as the county, judicial center and jail buildings to mom-and-pop businesses, they said.
Some citizens asked about property-tax bond increases narrowly voted down in the last election, suggesting the town try again to seek the needed steady revenue stream.
Even if that were successful, town officials said, a rate increase would still be necessary.
By the end of the meeting, the town board was committed to re-evaluating its new rate structure, directing the town clerk to hold off sending a recently drafted letter explaining to townspeople its latest water rate ordinance.
” Tonya Bina can be reached at 887-3334 ext. 19603 or e-mail firstname.lastname@example.org.