Rico is exploring options to build a central sewer project and upgrade its water system.
The town’s domestic water treatment system is outdated, and it does not have a central sewer system. Businesses, town government, and residences rely on individual septic systems.
An $8,000 grant was recently awarded to Rico from the Department of Local Affairs to study potential economic benefits of a central sewer system that would serve the town’s commercial core, according to Rico Town Manager Kari Distefano.
“The analysis should be able to provide the community with important information regarding construction of a sewer system and help answer the question: Would the cost of construction be worth the potential economic gain?” a town manager’s report said in October.
The economic study will take place in the coming months and will analyze how much money Rico potentially loses because of infrastructure problems.
Rico has strong reserves but has been operating in the red due to a backlog of maintenance issues and limited sales tax revenues.
In an interview with The Journal, Distefano said a central sewer system and improved water plant could start to “tip the economic scales a bit” in Rico by attracting more businesses and boosting sales taxes that go into the general fund.
For example, some commercial lots are too small to have a septic system and, therefore, water service. But they could be tied into a central sewer, making them a more attractive business opportunity.
Also, there could be more interest in buying or operating the long-closed Rico Theater if it were connected to a central sewer instead of a septic system, Distefano said.
Central sewer would also open the door for housing by allowing homes to be built on smaller lots.
Distefano said it can be “a little difficult” for those not on the main drag to see the benefits of improving infrastructure there. But long term, the water and sewer improvements would benefit everyone by boosting the economy and local budget.
“It is my hope that improved infrastructure will increase sales taxes, securing town services into the future, but it will require an investment by the community,” she said. “While existing town services can continue next year and probably the following year, we can’t live on our savings forever. Either we need an increase in revenue or we will need to cut staff time.”
If preliminary grants for the project are approved, community meetings would be held on whether to put the infrastructure improvement plans on the ballot in November. How to pay for the projects, including usage fees, loans, grants and property tax increases, also must be decided.
Town documents outline various proposed options for upgrading the water system and building a central sewer system.
On the water system, Option 1 includes replace filtration plant, pipeline protection against slope debris, upgrade infiltration gallery, water meter replacement and installation of a SCADA control system. Total estimated cost of upgrade of the Option 1 upgrade is $3.9 million.
A 21 mill levy increase plus a $500,000 grant and a no-interest loan from the Colorado State Revolving Fund would be needed to support this improvement, according to a town report. For a home with an assessed value of $200,000, the mill increase would mean an additional $290 per year in property taxes.
Water system upgrade Option 2 includes tank rehabilitation, a SCADA control system, water meter replacement and changing water rights diversion from Silver Creek to a Rico well. The total cost of Option 2 is estimated at $560,000.
A no-interest loan and a mill levy increase of 3.5 mills would support Option 2. For a home with an assessed value of $200,000, the mill increase would mean an additional $49 per year in property taxes.
Two options for a new central sewer system are being explored.
The Little Ada Site option would cost an estimated $4.7 million for the sewer collection system and sewer treatment plant. The option is possible with a $500,000 grant, no-interest loan and 21 mill increase, which would be an additional $304 per year in property taxes on a home with an assessed value of $200,000.
The Wye Site option would cost an estimated $4.1 million and need a $1 million grant, no-interest loan and 19.3 mill increase, which would be an additional $267 per year in property taxes on a home with an assessed value of $200,000.
The community has been debating the pros and cons of the proposed water and sewer infrastructure improvements options and the idea itself.
The Little Ada central sewer site is farther south and would allow future development on parcels in the southern portion of Rico. The Wye Site is less expensive but is closer to homes in town, and lots to the south would need to pump sewer to the treatment site.
According to town discussions, central sewer for the commercial core could attract development, spur new businesses and increase sales tax revenues – a plus for some, but not others.
Many lots in the commercial core are too small for modern septic tanks, and it was stated that a central sewer for the business district would help improve and utilize commercial spaces.
In meeting discussions, it was noted that when a current septic system needs significant repairs, it requires costly upgrading to current standards and repermitting by the Colorado Department of Health and Environment.
Another question asked whether an increased business presence would raise significant sales tax revenue for the town. It was recommended was to put water system and central sewer proposals as separate ballot measures, not as a combination question.
If project grants are obtained, more community meetings will be held to discuss possible tax increases and ballot measure for November. If voters approve part or all of the infrastructure improvements, construction could begin by 2020 or 2021.
jmimiaga@the-journal.com