Trustees Ponder Letter from Local Business Unhappy with Utility Rates

During the July 16 Board of Trustees meeting, a received correspondence was discussed among Trustees and Town Manager Lex Mulhall. The letter was penned by the new owner of Alpine Village, Christy Turner, submitted to the Town of Lake City, Board of Trustees and Public Works, with a preface to the letter stating that an organized coalition of affected businesses is currently being formed.
Turner states in her preface: “As seasonal lodging and tourism-based businesses are being hit with property tax increases, unfair utility rates, and increased lodging tax, the burden is immense. We feel some discriminatory action against our seasonal lodging businesses, and we hope to see some consideration.”

The letter in full reads as follows: “Dear Administrator and Board Members, I am the owner and operator of Alpine Village Lake City, a seasonal, multi-unit short-term rental business located in Lake City. We operate only four months of the year, primarily during the summer tourism season. I am writing to express serious concern regarding the implementation of Ordinance 1-2025 and its impact on seasonal businesses like mine.

The ordinance states its purpose is to create a fair structure that reflects actual use, yet it imposes year-round sewer base rates even during months when there is no metered water use and no occupancy. This means I am effectively being billed for sewer capacity and infrastructure that is not in use.

This approach is inconsistent with the ordinance’s own stated goal of fair use-based billing and maybe legally vulnerable under the doctrine of arbitrary and capricious utility billing, which prohibits municipalities from charging fees disconnected from actual service provision.

For seasonal operators, being assessed a fixed base rate during zero-use periods not only imposes an inequitable cost burden but also suggests a failure to proportionately allocate costs across classes of users.

While staff notes reflect efforts to keep residential housing costs down, no such consideration has been extended to seasonal tourism-based businesses, despite our limited operational footprint and substantial contributions to the local economy. Accordingly, I respectfully submit the following requests for your immediate consideration:

Request for Reclassification or Seasonal Rate Adjustment

– We request the creation of a seasonal business classification or the option to waive base sewer rates during inactive months when metered water use is zero.

– The current structure imposes a disproportionate burden on seasonal businesses, contradicting the ordinance’s stated intention to bill fairly for actual use.

Request for Ordinance Review or Amendment

– We ask that Ordinance 1-2025 be amended to include:

– A “dormant period exemption” for base sewer rates tied to documented zero water usage.

– A seasonal utility rate schedule for short-term lodging and hospitality businesses, aligned with actual operational months.

Lake City’s economy relies on seasonal tourism and lodging. Ensuring equitable utility billing that reflects actual usage is not only fair–it’s essential for the viability of the very businesses that help sustain this community. I would welcome the opportunity to discuss these concerns further and hope the Town will consider a more balanced and use-reflective approach to utility billing.”

Sincerely,
Cristy Turner
Alpine Village Lake City
[email protected]

Mulhall told Trustees that he had responded to Turner, as well as providing the same facts to the Trustees in case they are approached about the matter, explaining that 97 percent of the Town’s costs are fixed costs that the Town incurs year-round. Mulhall said, “we also have these loans (for the renovation of the wastewater treatment plant project – WWTP) that we have to pay. We were required to prove that we would be able to pay them off in 20 years, with the rates that we charge through our rate structure that we adopt. Having a seasonal rate just does not work here, that’s why we have to have the base rates.”
Mayor Dave Roberts spoke up, saying, “We all know, we didn’t create these increases in cost. The state came to us because we were out of compliance. We were forced to do this, we had studies done, we followed the book, and we are as fair as we can be. That is why those rates are in place. We can review that in the future, but as of today, that’s where it’s at. My thoughts are – I’ve listened to what they (Alpine Village) said, and I understand their position, but it is what it is right now.”
Trustee Diane Bruce asked if this kind of situation occurs in other places, since Lake City is special in regard to infrastructure, to which Mulhall replied, “in larger systems [something] could be figured out, but when 65 to 75 percent of all the homes on your system’s connections are seasonal…multiple times a year we get complaints, especially people who buy property and they didn’t know that they had to pay a base rate all year, even without usage. That would snowball real fast into something that is completely unsustainable.”
Bruce replied, “So base rates are industry standard?”
To which Mulhall said, “Bigger cities can do usage. They can figure that out somehow, and they have more advanced water meters and different ways to read and measure the usage. Some of them can do usage, but they can prove that to the state. We cannot – we cannot pay our bills through just usage. You don’t know what businesses will be open this year, which second homeowners are going to show up or not, or how long they’re going to be there. It changes year to year.”
Bruce replied, “What I’m saying is – we’re not unique.”
Mulhall confirmed and said, “No there are plenty of other small mountain towns [dealing with this]. Crested Butte’s rates just went up 140 percent. The Colorado Rural Water Association representative came and asked us how we were doing it here – he said most communities over the past few years have had to raise their rates anywhere from 50 percent to 200 percent. So, no, we are not unique.”
Mayor Roberts said, “We went off the rate schedule study, we kept down everything we could. I sat through Silverton’s Town Council meeting about a month ago, and they are where we were about a year and a half ago. They took probably 20 citizens comments [in that meeting] and they are struggling through the process the same as we did. One of the people in that meeting said that Lake City has got theirs in place, and they did a great job – so hats off to Lex and our Public Works Department. So – it was noticed that Lake City did good and got it done.”
Trustee Linsey spoke up, saying, “I just want to re-iterate a couple of things. As many of you know, I have been involved with water and wastewater in the Town of Lake City for a very long time, and there is a constant argument about ‘why do I have to pay?’ Always. Always that same argument. ‘Why do I have to pay if I’m not using water?’ Because you can. We don’t tell you when you can come and go. You can come up here and use your water whenever you want, and if you don’t, you don’t. The other thing is, the main reason we are having to spend all this money on our wastewater project is because of the seasonal way this town operates, in that we have seasonal businesses and we have seasonal residents. If we were just the same as we are eight months out of the year, we would not have to be spending all this money on our water and wastewater projects, and that’s why our seasonal enterprises should be very happy we are doing this.”
Mulhall said, “They can choose to be connected or not. If they want it to work when they are open, this is what it costs. However a person operates their business or what they do with their property is none of our business. Whatever they have to do to make it work is up to them. But this is how it’s going to work if you want be able to use it while you’re up here, and this is how much you have to pay. It’s as simple as that.”
Mayor Roberts made the point, “Just so everybody knows, the loan we got [for extensive and required renovations to the wastewater treatment plant] – it’s required to show that we will be able to make these payments.
The other side to that, and something I wanted to do in the budgeting, is an obsolescence. If thirty years ago they had added five dollars to everybody’s bill every month for thirty years and had it sitting there waiting for when it may be needed, then we wouldn’t have been handed this giant bill all at once. So I would like us in our budgeting, as part of those rates, we’re also putting away for the next time. Because nothing lasts forever.”