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Utility rate hikes could be coming

by Larry Patrick

WALSENBURG- The Walsenburg Finance Committee has asked Mike McFadden, the natural gas purchasing agent for this area, to attend their next meeting to explain his recommendation that Walsenburg raise their residential gas rates by 26% this winter.  The cost to the city to purchase natural gas for heating is going from 29 cents per 100 cubic feet to 47 cents per 100 cubic feet.  A quick analysis by interim administrator Don Saling shows the average residential heating bill in Walsenburg last year was $99.22.  It would increase to approximately $126.75, on average under the recommendation.

    Walsenburg residents saw a 25% decrease in their heating costs last year when natural gas prices were down.  They could lose that savings plus pay a bit more if the city council passes along their increased costs to customers.  Businesses would also be affected.

    The city is also looking at a rate study for water and sewer which could result in increases for residents and businesses.  The city has lost significant revenue on water and sewer with the closing of the CCA Prison.  Their bond payment obligations continue with less revenue. CCA was paying about $330,000 a year in water, sewer and gas.

    A discussion was held about why CCA is not paying higher amounts for water, sewer and gas since closing.  City council thought they had an agreement with CCA that they would continue to pay $10,000 per month for utilities while they are closed.  But in management letters from former administrator Alan Hein to the city council members, CCA had requested they only be billed for usage, saying it was illegal to do otherwise, which is now around $200 per month.    

    Apparently, the finance committee, made up of the entire current city council, did not give Hein direction in dealing with the matter.  Because Hein was ill for a period of time, the matter was never resolved.  City councilwoman Erin Jerant said, “We can’t say we didn’t know it.  We have to cut our losses and move forward.”

    That brought up a discussion about why Huerfano County has received an impact fee per prisoner and not the city, since it is the city utilities being used and the prison is on city land.  No one on the finance committee knew the history and figured the prison was on county land at the time.  Now that it is on city property, through annexation, Jerant wondered whether CCA should be paying the city of Walsenburg the impact fees instead of Huerfano County when it reopens.  The amount in the past has been about $140,000 per year. 

    City councilman James Moore suggested that the city attorney look at the discussions Hein had with CCA on amounts paid for utilities while the facility is closed.  They also want to look into the county-CCA agreement and see if impact fees should be negotiated with the city instead of the county when CCA reopens the prison sometime in 2012.

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