The Town of Ignacio has raised concerns regarding the Southern Ute Indian Tribe’s increase to utility rates, set to take effect on Oct. 1.
Every system is different, for a host of reasons, including users, overhead and geographical location. The rate comparison for the region shows that the rate increase is not abnormal, and in fact is comparable with regional water and sewage rates for Southwest Colorado and La Plata County.
“We have a quality system which does not have a large population base,” explained Patrick Vaughn, Operating Director of Non-Energy with the Southern Ute Growth Fund. “We operate on a cost of service principal, not for profit. If you are on the system, everyone is paying the same rate increase.”
“It’s operating at a deficit, we have to close the gap,” Vaughn stated. “It is also the Tribe being responsible, we have a system to maintain which directly affects the health of the community.”
The Southern Ute Growth Fund charges the Town of Ignacio bulk rates for their water and sewage treatment. The Town of Ignacio is then responsible for direct billing of businesses and residents on their system. The Tribe has been sensitive to the cost of service. In 2014, the scheduled, contractual rate increase for the Town of Ignacio for wastewater services was not implemented because the Town was adding a surcharge of $9.88 per month and the Tribe was concerned about the effect of such an increase on town residents.
“The biggest rate increase will be for the Sky Ute Casino and Fairgrounds, the two biggest users are our own entities,” explained Southern Ute Growth Fund Executive Director, Shane Seibel.
The rate increase is based on data compiled by a contractor hired jointly by the Tribe and the Town of Ignacio. There will be a two-step rate increase designed to keep up with inflation. The current rate increase will be followed by another increase in 2020. From there the rates will level out, with periodic reevaluation based on circumstances and normal inflation, Vaughn explained.
“We have top of the line systems, and we operate well above the EPA permit requirements — the sewer [system] is state of the art,” Southern Ute Utilities Manager, Hayes Briskey stated. “We have one of the best [facilities] in Indian Country,” he emphasized. The Tribe’s operators are also certified, which is a requirement set forth by the EPA.
The Southern Ute Indian Tribe built a new wastewater treatment plant in 1999, followed by a new water treatment plant in 2005, both entirely paid for by the Tribe without the help of outside monies or grants, at a cost of $40 million. In the months to come, raw water settling ponds will be added as pretreatment storage, allowing for up to 20 days of water reserves in the case of an emergency. This upgrade will be paid for in part through Indian Health Services (IHS), but will be primarily funded by the Tribe at a cost of $3 million. None of these costs have been passed on to the system’s users.
The Tribe spared no expense when these were built, explained Vaughn. “The current plants were built to handle future expansion. We charge even rates for commercial and residential utilities — no differentiation. Current sewer rates were based on winter water flows at the request of the Town, therefore Ignacio’s sewer rates will actually go down, even though the water rates will see an increase,” noted Vaughn.
“Operating costs, that is really what we are trying to balance out,” Seibel emphasized. “The people taking care of it, delivering the product. [We’re going to] do what’s best for both of us, we are a community.”
“The Tribe is a good neighbor to the Town. We look forward to continuing our positive, long-standing relationship with the Town of Ignacio, the Board of Trustees and Town Mayor, Stella Cox,” stated Chairman Sage.