Ski valley looking at signifcant water rate increase

The Village of Taos Ski Valley Council heard some shocking news regarding its water rates during its regular meeting Tuesday (Feb. 28), after Robert Peixotto, certified public accountant with Southwest Accounting Solutions presented the village’s 2022 annual audit.

With the exception of one finding repeated from last year — that in defiance of a requirement of its agreement with the U.S. Department of Agriculture for a $750,000 water system loan, the village has declined to commission a water rate study — the audit found no other issues with the village’s fiscal responsibilities.

But the village has been losing money on its water and sewer systems for years and hasn’t raised rates for even longer. Decrying a rate increase, Councilor Chris Stagg, who is also a vice president for Taos Ski Valley, Inc., told his fellow councilors that, “Right now, the residential users pay three-tofour times [for water] in this valley what they pay anywhere else in the state.”

The Taos News was unable to confirm Stagg’s statement since the village isn’t included in the state Drinking Water Bureau’s annual Public Water and Wastewater User Charge Survey. Several utilities in San Juan County charge residential users over $70 per 6,000 gallons; Taos charges residential users $29.35 per 6,000 gallons. Village Administrator John Avila did not respond to an email asking for the village’s current water rates.

The village’s recent catastrophic water system failure, during which it lost an estimated 4 million gallons of water in about a month, and which will cost the village a pretty penny in emergency repairs, has brought to a head the fact that the ski valley’s water and sewer rates aren’t bringing in enough money to sustain the utility’s operations. Although water and sewer systems are generally considered to be enterprise operations, meaning they sustain themselves by charging fees, the village subsidizes its water and sewer joint utility fund with cash transfers out of its general fund.

Informed by the auditor’s assessment that the village either needs to raise water rates significantly, cut expenses or continue to prop up its water and sewer fund, Finance director Carroll Griesedieck reported that the village must raise its water rate by 15.38 percent in order to break even.

In order to build a water utility fund reserve of $250,000 — which would not only sock money away for emergencies, but also make the village’s finances somewhat more attractive to lenders — Griesedieck told the council that the village would have to raise its water rates by 42.89 percent; or institute a 70.39 percent increase to build a $500,000 reserve.

Jalmar Bowden, certified building official for the village, noted that the 27.5-percent increase on top of a 15.38-percent basic increase would only be necessary if the ski valley intended to build a $250,000 reserve within one year.

“So that looks pretty scary,” Bowden said. “Something less, we would have those kinds of reserves over a period of years.”