DILLON — Because Dillon's water and sewer costs aren't covered by its revenues, treasurer Carrie McDonald said the town must increase its rates.

“The No. 1 reason to increase rates is to maintain the water and sewer fund into the future — including operation, maintenance and capital projects,” McDonald said.

In 2009, Dillon's water revenue was $855,000, and it spent $906,000 in operating costs. McDonald said the town used cash left over from the previous year to cover it, but this isn't a permanent solution as the balance will eventually run out. Sewer numbers were a bit better — the town's 2009 revenue was $787,000, and its expenses came to $700,000.

A rate study was recently completed by consultants from Red Oak to address this issue, and a public presentation is set for Dillon's March 2 town meeting.

According to McDonald, the last rate study for Dillon was done in 2007, and its findings weren't adopted. Yet, Dillon has increased its water and sewer rates every year over the past five years or so to address a lack of funds in the department.

She also noted that necessary capital improvements — like a water storage tank, the Old Dillon Reservoir and “membrane replacement” at the treatment plant — have been put off because they town simply can't afford it now.

Rate increase information won't be available to the public until Feb. 26. McDonald however noted that rather than have one rate across the board, the town will use different rate structures based on three types of customers — single-family, multi-family (like condominium complexes) and non-residential. New rates will be posted on Dillon's website and made available at the town hall.

Caitlin Row can be reached at (970) 668-4633 or at crow@summitdaily.com.