Gypsum approves 40% wastewater fee increase

The Gypsum Town Council unanimously passed an ordinance Tuesday to raise wastewater fees in order to fund a $65 million dollar update to the town’s wastewater treatment plant. 

The annual rate hikes will begin on Feb. 1, increasing by 40% each of the next three years and by 25% in the fourth year. Customers can expect rates to reach just over $40 this year, eventually growing to $107 in 2026, after which rates will flatten.

During a public hearing for the first reading of the ordinance on Jan. 10, town engineer Jim Hancock explained that the fee increase was a necessary prerequisite for securing the first in a series of multi-million dollar loans to fund the project. At just over $5 million, the town’s sewer fund alone will barely make a dent in the project, and the town is relying on its high credit rating to finance and complete the project by 2025.

“Short timeline, a lot of money, we need to raise rates,” Hancock said. “(Our sewer fund) has been very low for a long time. We’ve been able to meet our operation but haven’t been saving away a war chest for future expansion, so this is a necessary step to get us to where we need to be.”

Council members questioned staff about other potential revenue sources for financing the plant during the first reading. Colorado has a state revolving fund dedicated to funding water, wastewater and stormwater infrastructure projects through grants and low-interest loans, but Hancock said that the town of Gypsum does not qualify for the grant program.

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In addition, Hancock said that federal money from the Infrastructure Investment and Jobs Act is being used for water rather than wastewater projects, thereby offering little opportunity for the town to benefit from that source. 

“All of the infrastructure, utility money is going to the water,” Hancock said. “There are other agencies that we can pursue, but what we were shooting for — to get the whole package through the state revolving fund — that may not be the case.”

One way that the town might reduce the overall price of the plant is to overturn a recent state designation that identified the stretch of Eagle River as impaired for not meeting a new 0.5 nitrate standard. The town of Eagle is currently pursuing action against the impairment designation, believing that the formula used in the designation was done incorrectly. If overturned, the new wastewater plant would have less stringent standards to adhere to, which could reduce the price tag by millions, but for now the scope of the project will remain as planned.

“We believe firmly that their calculations are incorrect in the impairment that they’ve designated the Eagle River as, but unfortunately it stands as the regulation right now, and until something changes we have to meet it,” Hancock said.

All council members agreed that the timing for the wastewater expansion is poor, given how high interest rates are for borrowing and how expensive materials and labor are for building at this time, but with the growing threat of capacity issues and the implementation of new water regulations the decision to move forward, though difficult, was unanimous.

Hancock also shared the final cost of the July 10 sewage spill, for which the town agreed to cover remediation costs in affected households, at $258,000, of which all but the $20,000 covered by insurance will come out of the sewer fund. Around 5% of the increased wastewater fees will be used to make up the deficit.

To read the ordinance in full, visit TownofGypsum.com.