With aging water and sewer pipe infrastructure dating to the early 1970s, a water main break repair and a section of line replacement in the Steamboat II Metropolitan District in 2022 cost more than $500,000.
Another water line break happened in September where nine homes did not have water for a day and a half.
Those types of expensive repairs hit hard for the special taxing district that currently has $600,000 in reserves for capital improvements, said Jeb Brewster, a mechanical engineer and Steamboat II metro district manager since April.
Regional experts say shortages in funds to repair aging infrastructure is a problem threatening various residential-based special taxing districts across Routt County that do not have as deep of pockets as cities and counties.
So, the Steamboat II district that serves water and sewer customers for some 420 residential properties, two schools and a church is faced with approving a proposed water and sewer combined rate jump of approximately 46%. The five-member volunteer district board is expected to vote on the increase at its next meeting Oct. 21.
"It has become much more expensive to complete these infrastructure repairs and replacements in the past few years," said Julie Baxter, Steamboat Springs water resources manager.
Steamboat maintains an annual budget line of $1 million for prioritized water main replacements within the city, Baxter said. The city is completing a water and wastewater rate study that is set to be presented to City Council on Nov. 12.
"We will be considering a rate increase as result of the rate study," Baxter noted. "To keep funding the water and wastewater system, it does take repair and replacement, and that costs money over time. Responsible utility providers are always evaluating the cost of operating the system."
If city water and wastewater rates increase, the charges to supply services to customers such as Steamboat II Metropolitan District also will increase, Baxter noted.
Metro district leaders note the water and sewer base rates charged to their customers have not increased significantly for at least 20 years except for minor increases in usage tiers. Water tap fees for homes being built helped supplement the budget in the past, but now the district is very close to full build-out.
"Part of operating a special district is getting on top of deferred maintenance and antiquated infrastructure," Routt County Environmental Health Director Scott Cowman said. "If you are not staying on top of those, they just become a bigger problem."
Cowman said federal and other grants are available, but smaller taxing districts generally have limited staff to identify, pursue and administer grants and may not have sufficient matching funds requested by grantors.
County staff have some capacity to help connect special districts to resources to pursue funding, Cowman said. Yet beyond winning grants, administering grants also requires bandwidth.
"It comes with grant administration work and requires capacity on the part of the special district," Cowman explained. "In the past couple of years there has been a lot of funding opportunity, but that changes and cycles."
During a meeting of the metro district board on Sept. 23, Brewster, who grew up in Steamboat, presented a 2024 Rate Study completed by Carollo Engineers to a room filled with district residents.
Recurring district operating costs are being met, but funding for infrastructure maintenance, repair and replacement is lacking, Brewster explained. Increased residential property tax revenue of approximately $200,000 per year has helped address ongoing operating costs in the district but is not enough to assist with repairs, he said.
Brewster noted the district's water system as a whole leaks more than 30 gallons per minute.
"We have multiple areas with small leaks that all contribute to that overall loss," Brewster explained. "We are losing significant amounts of water, which is very undesirable from both cost and waste perspectives."
One leak is so severe that water is standing in driveways of two homes on Blue Heron Drive in the Steamboat II neighborhood and is a first-priority fix for the district, Brewster said.
The current water and sewer base rate structure does not properly reflect metro district costs, and costs are expected to continue to increase due to significant water leakage, sewer system infiltration, emergency repairs and leak detection costs, Brewster said.
The manager said the district's 1 million gallon water storage tank built in 2002 also is in significant need of maintenance because an interior coating in the tank is coming off.
A former senior staff engineer at Lockheed Martin in Littleton for 22 years, Brewster was hired to manage a district that originally was formed in 1971 by the developers of Steamboat II. At the inception, water was supplied from one well, and the district operated its own wastewater plant until 1981 when it connected to the regional municipal wastewater plant. In 1993, the district added a 12-inch water main and acquired city water supply.
The district provides water and sewer connection services for the neighborhoods of Steamboat II, Heritage Park and Silver Spur as well as for Sleeping Giant School, Steamboat Montessori and Anchor Way Baptist Church.