Durango Seeks Water and Sewer Rate Increases to Fund Infrastructure

The city of Durango is proposing significant increases to water and sewer rates to address aging infrastructure and operational costs. City officials announced that residential water rates may rise by an average of $2.80 per month, while commercial accounts could see increases of $16.76. For sewer services, the proposed average monthly rise is $9.18 for residential customers and $78.14 for commercial clients.

These adjustments are necessary as Durango anticipates a deficit of $3 million in its water fund by the end of 2030. The city has planned extensive infrastructure projects, including a critical $35 million to $40 million pipeline replacement to ensure the delivery of safe drinking water. The sewer fund also requires an increase to cover operational expenses, which are projected to exceed revenues in the coming year.

Annual Increases and Infrastructure Needs

During a recent budget retreat, members of the City Council discussed the urgent need for these rate hikes. The Public Works Department is recommending a 10% increase for water rates and a 20% increase for sewer rates, with annual adjustments expected to follow. Interim Public Works Director Bob Lowry stated that a comprehensive rate study will guide future increases, outlined in pending water and sewer master plans set to be completed by 2027.

City Manager José Madrigal emphasized the importance of addressing decades of under-adjusted rates. He noted, “Had the city incrementally raised rates annually since Day 1, current rates would be significantly higher.” Without prompt increases, larger hikes may be necessary in the future, placing a heavier burden on utility customers.

Durango’s current average base water rate stands at $31 for both residential and commercial accounts, significantly lower than the surrounding cities’ average base rate of $48.40. The flow rate starts at $2.41 per 1,000 gallons, escalating with higher usage. The average base sewer rate in Durango is $23.72, roughly half of the $50.44 average for neighboring areas.

Rising Costs and Future Investments

Financial data reveal a contrasting trend in rates over recent years. According to Chief Financial Officer Gloria Platt, sewer fees have increased by 2% over the past five years, while water fees have decreased by 2%. In comparison, statewide water and sewer fees have risen nearly 5% during the same period, alongside increases in other essential services like trash collection and natural gas.

A 2014 rate study had recommended a 2% annual increase for both water and sewer fees, which was implemented in 2019. Another study suggested a 3% increase that was not adopted. Previous recommendations from the former Infrastructure Advisory Board in 2022 included a water rate reduction and a 10% increase for sewer rates, with no adjustments made since then.

The rising operational costs have prompted the Public Works Department to advocate for the proposed rate increases. Operating expenses have surged by 20% from 2019 to 2024, while contracted service costs have skyrocketed by 185%. The need for repair and maintenance has also increased by an average of 56%.

Lowry highlighted the critical state of the city’s infrastructure, stating, “Everything we have in the ground is going to have to be replaced over the next 50 years.” He pointed out that many pipes are over 100 years old, and when failures occur, they can result in prolonged service disruptions.

As the city looks towards future funding for its infrastructure projects, potential sources include the 2025 sales tax and the renewed 2005 sales tax approved by voters. Madrigal has also suggested exploring the possibility of utilizing lodgers’ tax revenue, considering the impact of tourism on local infrastructure.

The proposed rate increases aim to ensure the sustainability of Durango’s water and sewer services while addressing pressing infrastructure needs. The city urges residents to prepare for these changes as it navigates the complexities of funding essential public services.