Negotiations underway between Water and San and Meridian Lake to update agreements

Figuring out a fair rate for Meridian Lake area owners

[  By Mark Reaman  ]

Negotiations are ongoing between the Mt. Crested Butte Water and Sanitation District (MCBWSD) and Meridian Lake Park Corporation (MLPC) officials over how best to proceed with rates for services. Both entities agree there are many issues under the current agreement that need straightened out and talks have been going on for more than a year-and-a-half. A possible solution is being drafted and could be looked at by both boards as early as February.

Meridian Lake Park (MLP) and nearby subdivisions like Pristine Point joined the Mt. CB Water and San District in 1995 because the original water and san infrastructure in MLP was not adequate. A study done by the government consulting company Raftelis in 2019 indicated that the overall district has been subsidizing rates paid for by MLP residents for the water and san services but figuring out how to proceed has been difficult.

At the time of the original annexation into the district, a Memorandum of Agreement (MOA) was signed by both entities and was meant to detail how the district would absorb MLPC. The 1995 MOA was modified in 2013 but as is so often the case with agreements from that period, there were some grey areas in the agreement that made things confusing for both sides and so now the entities are trying to clean up the agreements and make clearer what is expected from both sides.

According to minutes of the negotiation meetings found on the MCBWSD website, it is obvious the negotiations are sometimes contentious over the substance which has a stated goal to “determine an equitable and fair approach to address the financial discrepancy created by the MOA so that the District and its MLP customers can move forward together in a financially sustainable manner.”

The study done by consulting company Raftelis to determine costs of operating water and sanitation services for the MLPC found “that all revenues collected from MLP, less the expenses to run MLP, are not near enough to operate MLP independently. If the entities were to go down the sub-District path, the MLP bills would be significantly higher than they are today.” 

In other words, members of the district as a whole are basically subsidizing the service costs provided to Meridian Lake Park property owners. The Raftelis report indicates more than $4 million could be considered the “cumulative variance” in what MLP property owners have paid since 1995 and what it has actually cost to run their system in more than two decades. But some on the MLP negotiating committee felt the study was not complete and details of the dam and Meridian Lake ownership and operating costs weren’t fully explored.

MCBWSD district manager Mike Fabbre explained that both entities have appointed water committees to negotiate details of a potential new agreement and conversations were held regularly. “But it is a slow process. We are still going back and forth,” he said. “All this is being done transparently. Updates are given regularly at our board meetings and the history can be found on our website. I don’t know when there will be something the boards can vote on, but we are continuing to work hard to get to that point.”

According to the MLPC website, homeowners there have been paying a $36/month surcharge to the MCBWSD for service over the rest of the district members. In the MLPC board minutes from November of last year, it was conveyed that the MCBWSD had made two proposals moving forward. The first would continue a surcharge on MLPC homeowners in perpetuity and perhaps at a higher rate. The MLPC would also be responsible for funding future capital costs. The second proposal would keep the current $36 surcharge for six more years before eliminating the surcharge and charging MLPC members the same as the rest of the district. Minutes indicate the MLPC board was interested in pursuing the second proposal. 

MCBWSD board chairperson Brian Brown said the negotiating committees have spent a lot of time trying to untangle the history of the annexation and come up with a fair solution moving forward. “A formal proposal for consideration is not available at this time. However, the district is expecting to have a draft for review by the district board soon,” Brown said. “Based on the most recent discussion, the draft proposal for option 2 would terminate the existing MOAs upon agreement. At that time, the district would no longer distinguish between different areas of the district. The current $36.27 surcharge for MLPC would continue for six years as part of the draft settlement agreement. Traditionally, other components of the district’s rates have been consistent across the district, and there are no plans to change that approach to district rate structures. The details of this draft proposal have yet to be formally considered by the district board and are subject to change.”  

The next MCBWSD meeting is February 8 and while not yet certain, it is possible the board could have a draft proposal to begin considering at that time.