Residents may face large rate increases

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AZTEC — The city of Aztec continues to grapple with how to set utility rates to cover the cost of providing service to its customers.

The City Commission must approve new utility rates before the start of next fiscal year in July. According to estimates, the average $147 monthly bill would need to increase by $117 by 2025 to cover the cost of service.

As a way to try to reduce the size of any rate hikes, the city already has delayed the dredging of its reservoirs another couple of years. That was one of the large projects that was influencing the cost of providing water service to customers.

One of the proposed increases would be a 45 percent increase in wastewater rates this year, as well as a more than 10 percent increase in water rates over the next five years. There also would be subsequent wastewater increases over the next few years. Electric rates likely will remain the same.

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Several scenarios were presented by the city staff to the City Commission this week. Those looked at paying off sewer outfall line debt this year or paying off half of the sewer outfall line and financing the rest through a loan. In each of the scenarios, the city dipped below the reserves — or utility savings account — in the year 2022.

"I don't know how to avoid the apocalypse of 2022," Commissioner Katee McClure said. 

City Finance Director Kathy Lamb explained that the reserves are about 25 percent of the operating and maintenance expenses, plus the amount the city has to pay for loans. The reserves will help the city pay for repairs if there is an emergency. Following 2022, the scenarios showed the joint utility fund returning to a balance above the reserves.

Mayor Sally Burbridge asked Lamb to provide scenarios looking at how much rates would need to increase if city did not put aside as much money to prepare for emergencies.

In one scenario, the city estimated the average utility bill would increase by $20 this year.

City officials said each customer's bill will show a different impact. For example, McClure said her bill averages $90 a month, which is less than the estimated $147 monthly bill for the average Aztec utility customer. Commissioner Sheri Sipe said her bill tends to be higher. The commissioners suggested bringing in a variety of monthly bills to determine how the increases would affect different customers.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.

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