Routt County residents in the Mount Werner, Steamboat ll and Tree Haus Water and Sanitation Districts will see their water rates increase by 2% annually until 2024.

Steamboat Springs City Council unanimously approved the measure Tuesday, Dec. 14, with council member Eddie Briones recusing himself because he is an employee of the Mount Werner Water and Sanitation District.

Michelle Carr, distribution and collection manager for the city’s water and sewer department, told council the increase was important to conserve water amid climbing temperatures and more severe droughts each year, one of the city’s top priorities.

Though the increase is meant to help conserve water, most residents will not see a dramatic change, as rates will only go up by about $1 per year for residential households and $8 per year for commercial businesses.

On average, residents currently pay about $104 per month for water and wastewater uses, while commercial properties pay about $265.

By 2024, the average residential bill will eventually reach $106.25 per month, while businesses will pay about $290.47.

Carr conducted a study to see how the city can best balance affordability and conservation practices, and the study concluded that a small annual increase was all the city needed.

In an effort to keep prices fair, all water users will pay the same base rate for 4,000 gallons per month, which Carr said is about how much the average household uses. If a household or business uses more than 4,000 gallons, users will pay on a tiered system.

“This is to encourage conversation practices by setting the base rate and then having tiers of usage — that’s what we tried to encourage,” Carr said. “It’s kind of a balancing act because — while we want to keep rates affordable, and we’re really only trying to recover our costs of service and not any more than that — we just want to keep a balance to encourage water conservation.”

Residents and businesses currently pay for water and sanitation in two methods: fees for service and tap fees.

Fees for service are collected from customers paying their monthly bills. This revenue is used to cover the ongoing operation and maintenance of the systems, as well as the replacement of old and deteriorated infrastructure.

Tap fees, also known as plant investment fees, are used to pay for existing infrastructure and future growth.

Though Tree Haus and Steamboat ll are not within city limits, the city’s wastewater treatment plant serves residents in those districts — which both border city limits — so they pay the same fees as Steamboat residents.

The city breaks even on its utility fund, but staff reevaluate rates every three years to ensure the fund can stay self-sufficient.

While Carr said a primary focus is to improve water conservation, the city also considers factors such as drought, weather conditions and economic inflation in considering whether to raise rates and by how much.

“The purpose is to reevaluate the assumptions and projections made in the previous rate study and then kind of course correct,” Carr said. “It is developing rates based on new information that we’ve had over the past two to three years.”

Steamboat will conduct another study in 2024 to see how much — if at all — the city should raise its water rate.

To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.