DPU Manager Tim Glasco discusses rate increases for water and sewer during the Aug. 8 County Council meeting. Photo by Kirsten Laskey/ladailypost.comStarting Aug. 30, Los Alamos County residents will start seeing a change on their utility bills for water and sewer rates.
During the regular County Council meeting Aug. 8, council unanimously approved to raised each rate 8 percent. As a result, the Department of Public Utilities (DPU) residential customers will see their monthly sewer cost increase from $43.94 to $47.46. This equates to an additional $3.52 a month or $42.24 a year. Regarding the new water rate, the cost for a residential customer who consumes 6,000 gallons of water a month will increase from $36.38 to $39.30 a month. This equates to an additional $2.92 a month or $35.04 a year.
The driving force behind the new sewer rate is to generate revenues needed for current operations and to build cash reserves necessary for future infrastructure replacements, the biggest one being the replacement of the White Rock wastewater treatment facility, according to agenda documents. DPU Deputy Manager Bob Westervelt said currently the operating expenses and the revenue are balancing out. “We’re not building reserve funds,” he said.
Therefore, DPU does not have the revenues to even apply for state loan funds for the replacement wastewater treatment plant. Having the sewer rate increase, Westervelt said, will get DPU to the point where it will be able to initiate the replacement plant project, but Westervelt cautioned additional rate increases or other sources of funding will be needed to fully fund the project.
Still, the County Council, DPU staff and the Board of Public Utilities are planning to look at alternatives to help fund the replacement facilities. Although nothing is currently proposed or approved, Westervelt said these alternatives could be a number of things: transferring money from different County funds, dedicating a gross receipts tax increment or a general obligation bond issue to the replacement plant, or using capital improvement project money for the project.
The age of the current wastewater treatment facility is the reason a new replacement facility is needed. “The old one is worn out,” Westervelt said. It is 50 years old and generally the life of a treatment facility is 30-40 years old. He added while the plant in Los Alamos could handle treating White Rock customers’ wastewater, there is no way to get the wastewater from White Rock to Los Alamos. Currently the plan is to design the new wastewater treatment plant in 2019 and then construct it in 2020. The current plant would still be in operation while the new one is built.
Aging infrastructure is also the reason behind the increase in water rates. Since fiscal year 2000 Westervelt said DPU has spent roughly $20 million on capital improvements in addition to routine maintenance and operations on the County’s water lines. Still, much of the water distribution system is 50 years or older. The rate increase will help with water line replacements, replacing valves and repainting at least two water tanks.
Westervelt said even with the new rates the cost for water and sewer utilities in Los Alamos remains very affordable. He pointed out that the median household income in the County is $108,639 and the total water bill with the new rates would amount to less than one-half of 1 percent of the median household income. Similarly, the new sewer rate increase amounts to less than one-half of 1 percent of the median household income. A common industry standard is that each of these should target something not to exceed 2 percent. Westervelt pointed out in 1992 the water rate was $3.92. Applying the average rate of inflation since that time of 2.26 percent, equates to $6.71 in 2016. The rates proposed do not even account for inflationary pressures experienced in the last 25 years, he said.
“Despite difficulties in providing service due to our topography and the age of our systems, we really remain affordable based on median household income,” Westervelt said. “And still, our rates fall in line with all the our most comparable neighboring communities. We provide a very reliable service at a very affordable rate.”
During the County Council meeting on Aug. 8, Councilor Antonio Maggiore pointed out that not everyone makes the median income in Los Alamos. He added he himself does not make a six-figure salary so it was difficult to approve the rate increases knowing he would have to pay more for utilities. Maggiore said he was not willing to continuously approve one rate increase after another.
While discussing the sewer rate increase, Council Vice Chair Susan O’Leary said although she was persuaded that the 8 percent increase is necessary, she also urged the board, council and staff to explore alternative funding methods. “It’s important for us to be open minded and really explore new funding,” she said.
Also during the discussion of the sewer rate increase, Councilor Pete Sheehey said it is important to match rates with costs but the rate increases will be “pretty hard on our citizens. We need to look at everything.”
