Cherokee hikes rates 87%

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Customers of the Cherokee Metropolitan District are getting hit with an 87-percent increase in their water rate and a 10-percent hike in wastewater bills.

Not surprisingly, many of the district’s 18,000 customers are feeling significant sticker shock.

“I’m not real happy with them right now,” said Mary Hernandez, a 30-year-plus Cimarron Hills resident.

No other water district in Colorado has boosted rates as much. The Cherokee increase for 2010 follows on the heels of a 35 percent hike in 2009.

For a household using five units of water a month, water bills will climb from $10.35 to $19.35. The bigger users, say a household using 50 units a month, will see their bill climb from $194.40 to $363.30.

“A lot of us are retired and are on a limited income out here. I won’t be putting in any bedding plants or be able to have my pots of petunias,” she said, noting that her latest water bill was $62, which reflected just a half-month under the increase.

“When I water the lawn in the summer, it will probably go to $150,” she said. “What will this do to our community?”

Hernandez’s neighbor, Jan Olson, is so worried about the future of her neighborhood that she plans to run for a position on the Cherokee board in May.

“A lot of people are complaining, and their bills don’t even reflect a full billing cycle yet. February’s statements were just through the 15th or 16th. Next month we’ll see the whole amount,” she said.

One of her big concerns is what higher rates might do to drive away potential home buyers.

Multiple factors

The district serves a 4,000-acre enclave stretching from Powers Boulevard on the west to Barnes Road on the north, Highway 24 on the south and as far east as Meridian Hills and Falcon. Its water has come from various other districts and is piped in by the Colorado Springs Utilities. It also had at one point relied on wells in the Upper Black Squirrel Basin, control of which is in constant dispute.

Cherokee officials attribute the new, higher rates to what the district is now paying Colorado Springs Utilities, as well as to court rulings that have cut the district’s water rights by 40 percent.

Cherokee recently began buying all of its water from CSU. It was compelled to do so after the utility stopped allowing Cherokee to use CSU’s infrastructure to pipe water bought from other utilities.

Rates could have gone even higher.

CSU spokesman David Grossman said an agreement that went into effect in January between CSU and Cherokee, in place through 2012, reflects a 187-percent increase in Cherokee’s cost of water.

“This is not a situation of the utility company trying to take advantage of anybody,” Grossman said, adding that CSU is required by city code to charge outside customers 1.5 times — or 150 percent — of the rate paid by in-city customers.

But the cost of city water is just one contributor to the rate increase.

Under a series of court rulings, Cherokee, which at one point was able to tap into 14 wells in the Upper Black Squirrel Basin, was forced to shut down those operations.

“I had about three good months on the job before that ruling came down,” said Kip Petersen, Cherokee general manager. “We’ve been trying to find ways to solve our water shortage ever since.”

Few options

Colorado Springs, unlike Denver or Pueblo, has no rivers flowing through it. More than 80 percent of the metropolitan area’s water must be imported from watersheds outside Leadville or from the Pikes Peak watershed.

The problem of securing water for a high desert plateau, dependent otherwise on rainwater or underground water basins like the Upper Black Squirrel or the Denver Basin, plagues cities throughout the state.

“Wow,” Colorado Water Commission secretary Rick Nielsen said in reaction to Cherokee’s rate hikes.

Nielsen, who also serves as a board member of a water district in the Denver area, said it’s uncommon to see increases that high.

“We see an (rate) adjustment about every year, but we try to keep increases in the single digits. Of course we don’t have the same water shortages you have at Cherokee. I’ve heard of one district where rates were going up 10 percent — and another for 50 percent, but that’s very rare,” he said.

Petersen, who has been on the job since January 2007, said Cherokee has tried to find ways to minimize rate pain.

The utility has even considered applying for city annexation, which would enable its residential and 400 commercial users to use city water.

“The trouble is we’ve been designated by the city as ‘undesirable,’ Petersen said, noting that the district has attracted little retail activity that would generate sales tax. “Ours is a residential tax base. Even if we were annexed, our rates wouldn’t go down that much, but we’d see a substantial property tax increase.”

Schriever Air Force Base, which uses from 680,000 to 920,000 cubic feet of water a month, also gets its water from the Cherokee Metropolitan District. Air Force officials say the installation has its own negotiated contract with the water and wastewater service supplier and hasn’t been hit by the rate hike — yet.

“At this time, we have heard there is a rate increase which will affect us, but until we get the official request from Cherokee with the supporting documentation for an increase, we are not in negotiations,” base officials said in a statement.

Meanwhile, thousands of homeowners who live in the district face years of water rate increases without much recourse.

The Utilities Program Advisory Committee, established by CSU’s governing board, the Colorado Springs City Council, has begun studying the possibility of selling access to water to out-of-city customers such as Cherokee Metro District. But it will be at least five to 10 years before a long-awaited pipeline connecting Pueblo and El Paso counties will be up and running.

7 Responses to Cherokee hikes rates 87%

  1. The cost of living for the Colorado Springs area will dramatically increase during the next several years, which will greatly limit or eliminate any local recovery – economic or real estate market. Be aware and prepared.

    bill
    March 15, 2010 at 6:25 am

  2. I guess I better look for a new place to live! I have to sell my home. i can’t afford an increase in my water bill.

    Laura Hibbitts
    March 15, 2010 at 10:43 am

  3. This is ridiculous! The city utilities company has always been problematic. Remember a few years ago when we were rationed water? The utility company saw a decrease in profits, increased our rates to compensate. When the ration was lifted but the rates remained the same. Does NOBODY see this? Anything run by the city at this point is a mess. I’m very ticked off that my water rates will increase and there’s nothing I can do about it. Looks like we’re going to need to look at moving in the next couple years. Way to go CSU!

    Lisa
    March 15, 2010 at 12:17 pm

  4. This has nothing to do wtih CSU and everything to do with poor planning when the area was developed. Homes were significantly cheaper east of Powers and folks flocked to that area because they felt they could buy more home for less money…the writing was on the wall ten years ago, but no one was complaining about lower home prices! Buyers have a responsibility to research an area before purchasing a home, this includes HOA dues, covenants, utilities etc. Don’t blame CSU because you bought in an area without a reliable water source.

    J.B.
    March 16, 2010 at 8:51 am

  5. This rate increase is outrageous! And where will all the water be used? Besides the HUGE amount used at Schriever Air Force Base, and it’s new Base Housing, A very large majority of that water is consumed by the 3 or more Cement plants on or near Marksheffel Road, just north of Constitution!!! Summer Months are when they make the most cement. More than 99% of that cement is used outside the Cherokee Metropolitan District. Each Cement truck uses 700 to 900 gallons of water per load. Multiply that times several hundred loads a day. How come nobody will talk about that??? Their Commercial Rate isn’t increasing 87 Percent. The Homeowners are subsidizing the cement companies share of the water costs!

    Outraged Residential Customer
    March 16, 2010 at 10:14 am

  6. Does anyone bother to get Cherokee’s side? They are not doing this because the want big profits. As a metropolitan district, they are not allowed to make a profit. Second, CSU stuck it to them by tripling the fee they charge to Cherokee. Last year, CSU billed Cherokee $1 million. This year that same amount of water is $3 million. In addition, these problems were started many years ago when board directors didn’t raise rates for several yeas and didn’t put any money away for maintenance and repairs of equipment. Now the chickens have come home to roost. I think this district manager and board are doing the best they can with the cards they’ve been dealt.

    Falconite
    March 16, 2010 at 11:45 am

  7. To say that buyers are at fault because they didn’t do enough research is a ridiculous and unfair statement. When we bought our house 6 years ago Cherokee’s water rates were comparable with the city. How were buyers supposed to predict that Cherokee would lose a large chunk of their water rights?

    Outraged
    March 16, 2010 at 9:57 pm