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The Los Alamos County Council voted 4-2 to approve a significant sewer rate increase following a public hearing Tuesday night.
Every councilor agreed that the rate increase was needed to replace deteriorating infrastructure, but Council Chair Geoff Rodgers and Councilor Frances Berting opposed the way the rate hike was distributed and the impact it will have on commercial customers. Councilor David Izraelevitz was away on business.
The Department of Public Utilities evaluated the current rate system, which was based entirely on winter water usage, and found that residential customers were subsidizing commercial customers. Residential consumers place relatively small demands on the infrastructure — which accounts for the major cost in wastewater systems — whether there is one person in a household or six.
“The system has to be able to handle the largest load that might ever go down to the treatment plant. So some of the large commercial customers can significantly influence that requirement,” said Robert Westervelt, deputy utilities manager for finance and administration for the Department of Public Utilities.
Under the new rate system, residential customers will pay a fixed rate, starting at $25.31 per month plus a $7 customer charge for the remainder of this fiscal year. Apartment complexes will be charged a flat fee of $21.09 per dwelling, plus the $7 customer charge.
Commercial customers will pay the $7 customer fee, plus a variable rate. The variable rate will increase from $5.89 to $11.91 and be based on the winter average of potable water consumed.
In July, all rates will increase by eight percent and be raised eight percent a year through 2016.
The ordinance allows DPU to work with commercial customers to make sure their bill accurately affects usage, either by changing which season usage rates are based on or by adjusting for variables such as evaporation at the pools.
Commercial users with low water usage, such as office buildings, will pay slightly higher than the residential rate. But the county’s largest consumer, the medical center, will see its bill doubled from $70,000 to approximately $140,000 in the first year alone.
Berting was especially concerned about the impact on Los Alamos Public Schools. Chamisa Elementary’s bill will jump from $1,700 to $3,300, Barranca Mesa Elementary will pay $4,200 instead of $2,200.
“I think your reasoning is good, but I think it’s impacting some of the people we don’t want to impact,” Berting said.
“The only alternative I could arrive at was to continue to have the residential customers subsidizing the business community as a whole,” Westervelt said. “I don’t think there is a really fair way to do it on a business by business basis.”
Westervelt said that DPU been conducting extensive outreach to the nonresidential consumers affected by the rate hike, including meeting with the schools and pool associations.
LAPS Purchasing Manager June Gladney addressed the impact that an increase to more than $18,000 will have on the school system.
“We felt that it wasn’t a catastrophic amount of an increase, but I would like to put that into perspective. For the operational budget of Chamisa Elementary — which doesn’t include salaries, doesn’t include utilities, but it includes their classroom supplies, includes their Xerox, their library books, some of their software, things like that–that entire budget for this year is $16,639,” Gladney said.
“So there is an impact, since this amount is more than we take out of our operational budget and allow Chamisa to spend on operating their school … I don’t want it thought that this is not going to affect us, because every dollar that we have to put into fixed costs is money we have to take out of the classrooms.”
White Rock resident and business owner Tadeusz Raven, the president of the Piñon Park pool board, urged council to consider a lower rate for not-for-profit entities such as the schools or pools than for commercial enterprises that can pass the cost on to their customers.
Christy Kelly, owner of Cece’s Gardens, on the other hand, was very concerned about the impact on her business and said that residential customers should pay the same rate as businesses.
Councilor Pete Sheehey addressed those concerns in his support of the motion.
“No doubt this is a shock to the nonresidential customers,” Sheehey said. “But if you are a nontraditional user, if you are not using water that’s going down the drain into the system, if you have a pool with big evaporative losses or if you’re watering plants, you’re not running down the drain. This ordinance does authorize you to talk to the utility department and get the rate adjusted. So although you will still pay more, this is something that is quite negotiable.
“The effort of this rate increase is to apportion the costs to the users that cause the costs. So I think it’s a reasonable measure.”
Councilors Steve Girrins, Rick Reiss and Kristin Henderson basically agreed that this was a fairer distribution of costs and addressed the need to replace infrastructure. Berting, however, wanted DPU to take another look at the rate structure.
“I personally am not quite happy with this increase to the schools in particular and the increase to some of the businesses, which are really going to be hurting. I don’t see the problem with letting the residences subsidize commercial,” Berting said. “I would propose that we split the two and try to even out the commercial, and let the residential pick up some of the slack.”
The new rates will go into effect with the next billing cycle.