Jeffco lawmakers are proposing legislation that would force the city of Littleton to set sewer treatment rates paid by tens of thousands of South Jeffco homeowners based on actual usage costs.
Littleton says its rates are fair and necessary, but a group of water and sanitation districts that rely on the Littleton/Englewood Wastewater Treatment Plant for sewer service say they don't have a voice in how rates are set.
The problem has been in the news over the last year or so as Littleton raised rates for the plant's users outside the city by 20 percent in 2008 without raising rates for users in the city. Littleton is on its way to raising the rates another 6 percent — this time for all the plant's users — and the Jeffco water districts still feel they're being charged unfairly.
"We still believe outside users subsidize inside users for collection system costs," said Pat Fitzgerald, manager of Platte Canyon Water and Sanitation District.
The bill, sponsored by Littleton Rep. Jim Kerr and Littleton Sen. Mike Kopp, would require municipalities that provide sewer service to districts outside their borders to base the rates on the actual costs of providing service. The bill would also prohibit municipalities from imposing "arbitrarily higher sewerage system rates on owners of property located outside the city or town," and to conduct public hearings before any rate increase for outside users.
Littleton Mayor Doug Clark said Kerr's bill will raise outside users' fees, not lower them. He said the bill would force rates up by as much as 50 percent, because it would add debt costs. Coming up with a way to measure usage costs is difficult, he added, since some plants measure it by the number of homes they serve, others base costs on population, and still others measure the size of the homes they serve.
Clark also said that Littleton residents are the ones on the hook for the plant's financing, and accused the Jeffco water districts of not wanting to pay the debt incurred by the expansion of the plant several years ago.
"They sent us a proposed change in the contract (last summer)," Clark said. "It said that when we set outside user rates, it has to be based on use and not include debt. We can charge them to run the plant, but we can't charge them for the debt service."
Clark said that would force Littleton users to take on more than $3.5 million per year in extra charges, "and (the districts) thought that was fair."
"As long as we hold the bonds, and we're responsible for the debt, we're the ones who are going to set the rates," Clark said. "We have no guarantee that the rates they're going to set are going to be enough to pay the debt."
Kerr said he's just trying to form a uniform system of handling disputes, and that the connector districts are not refusing to pay for the debt on the plants.
"The contract proposal was a tool to negotiate," Kerr said. "It was a starting point."
Kerr went on to say that he would have preferred to negotiate an agreement.
"I waited six months for them to work this stuff out," Kerr said. "I would have preferred not to have legislation, but now we have no choice in the matter."
"Let's just put together some really clearly defined guidelines," he said.
Larry Moore, general manager for Roxborough Water and Sanitation District, said that Littleton's rates may be fair, but the process lacks transparency.
"Doug (Clark) could be absolutely right," Moore said of the need to raise rates for the second time in two years. "Our point is we need to make sure we get it right. We lack some transparency on all the numbers. All we want to do is say, 'Let's work together and put it all out on the table.' If it needs to be higher, at least we can go back to our ratepayers and explain why."
Moore also said that his and other districts should pay to service debt.
"We believe we have as much responsibility to pay for that debt as any Littleton customer," Moore said. "All we're really after is to get a cost-of-service covenant in our agreement."
Kopp said that if the bill makes it to the Senate, he can get it passed. At the end of the 2008 legislative session, Kopp pushed through an amendment to a bill on the Public Utilities Commission that would force Littleton and others in the same position to prove that their rates were fair. It made it through the Senate but died in a House committee.
"This issue does resonate with the legislators I've spoken to on both sides," Kopp said. "They get the fundamental fairness issue at stake."
Rep. Jim Kerr, R-Littleton, is holding a public hearing at the State Capitol on House Bill 09-1006 that the public can attend and offer testimony. The new date is Jan. 27. It had been scheduled for Jan. 20. Call Kerr at: (303) 866-2939 for specific room number and time.