Angry homeowners in Breckenridge are after rebates for money they say they've overpaid to the Upper Blue Sanitation District during years when they didn't know they were eligible for a discount.

“It was never disclosed to us,” said Nancy Thorsen, who owns a duplex in Breckenridge and says she's been overcharged $1,400 over the last four years. “I honestly feel that fraud has occurred.”

The sanitation district, which charges higher fees on multi-family units than single-family homes, offers a 25-40 percent discount to homeowners who are not using their unit as a short-term rental. But they have to sign up for it.

“The premise of the discount is that there's proof required. There's action required,” said Robin Theobald, president of the Upper Blue Sanitation District Board of Directors. “The system just isn't a refund-type system. If you don't take action, you don't get the benefit.”

Studies indicate that, generally, multi-family homes, such as condos, duplexes and apartments tend to be a bigger burden on the system than single-family homes, likely due to the prevalence of short-term rental properties in Summit County.

The sanitation district implemented the discount for units owner-occupied or on long-term leases in the late 1990s. The discount puts the fees for a multi-family unit on par with those paid on single-family homes.

But many residents of multi-family units say no one ever told them about the discount, and they believe they have been overpaying for years.

“They make it sound like they emailed out all these different things to let you know that you were able to get a cheaper rate, and they haven't,” said Breckenridge resident Peggy Babbitt, who said she was overcharged more than $2,000 over seven years. “They should have to let people know at closing.”

Information about the discount opportunity has appeared several times in a newsletter mailed out with customers' bills, and the district does try to find opportunities to let users know about the discount through homeowners associations, sanitation district officials said.

But the refunds customers want aren't possible, they said, because there is no way for the district to go back and check that specific units weren't being used as short-term rental properties in the past.

“We'll give credit for the quarter they're in for those charges, but we cannot refund money,” sanitation district director Andy Carlberg said. “It's not that we don't trust people, it's just that we would like to have something we can verify, a document.”

To get the discount, multi-family residence owners who occupy their units or have long-term renters simply have to present a driver's license or voter registration with a local address and sign a deed restriction.

“That document serves as a way we can put that unit on our radar screen so we can monitor the use,” Carlberg said.

The second-home owner's dilemma

Cheryl Seidel doesn't have a driver's license with a local address or a local voter registration card. Her primary residence is in New Jersey.

So she can't take advantage of the discount, though she says she doesn't rent out her second home in Breckenridge, and she and her family only use it a few months a year.

“(My next-door neighbor) is paying half of what I am for the same sized house, and they live there permanently. We use our property a maximum of three months a year,” Seidel said. “I just think this is so wrong. I just want to be qualified for the lesser rate.”

The sewage system is ready and working all year, sanitation district officials argue, whether Seidel and her family are there using it or not.

“It's not that the second-home owner is using it,” Theobald said. “It's that it's available for use and that costs money. … A sanitation district can't just serve the average. It has to be able to serve the peak, so that if everything is occupied we can still treat the sewage. Because we can't dump sewage into Dillon Reservoir, it's as simple as that.”

Seidel said she intends to take legal action if she is not allowed to qualify for the discounted rate her neighbor and others pay.

Thorsen, on the other hand, hopes to gather a group of residents who have overpaid to complain to the sanitation district board for a refund.

A fair system

The revenue structure of the Upper Blue Sanitation District is based on two separate fees: user fees, which customers pay quarterly to cover maintenance, operation and capital replacement costs; and a planned investment fee, which is paid once by a new user to hook up to the existing infrastructure and funds construction projects.

Unlike other utilities, such as Xcel Energy, the sanitation district cannot customize bills based on customers' use each quarter. Because it has so many customers, the sanitation district classifies users into groups — such as single and multi-family homes — and bases rates on what flow studies indicate is fair.