Gunnison utility customers could see their electric bills rise 10 percent beginning June 1 after the City Council held a public hearing Tuesday on the proposed rate increase — part of a combined work and regular session that also included a detailed water and sewer rate study, council debate over the city’s draft Parks and Recreation Master Plan, and approval of a $120,140 architectural design contract for a Public Works facility expansion.
10% Electric Rate Increase Headed to Vote
The proposed increase, if adopted at the May 26 regular session, would raise the average residential electric bill by roughly $7 per month for a customer using 429 kilowatt-hours. Combined with water, sewer, and refuse rate increases already in effect, the average total monthly utility bill would rise from $233 to $248.
Finance Director Ben Cowan told council the primary driver is $6.3 million in planned 2026 capital projects — substation upgrades, infrastructure to support electric vehicle charging growth and home electrification, streetlight improvements, and reliability work. The electric fund reserve has fallen below required levels as the city has drawn on it for capital spending. Cowan said bringing the fund back into compliance in a single year would require a 43 percent increase; the 10 percent approach spreads recovery over five to ten years.
Cowan also noted that the city intentionally delays the electric increase to June 1 rather than January 1 to avoid hitting customers who heat their homes with electricity during peak winter months. Gunnison’s proposed rate places it near the midpoint among Colorado municipal utilities, based on a state association study. All power purchased for city customers is backed by renewable and non-emitting sources.
No members of the public signed up to speak at the hearing. One resident, Joe Dix, who addressed council separately during public input earlier in the meeting, noted at the hearing that the city’s 17-year average rate increase of 5.73 percent seemed reasonable, though he asked for a future explanation of why Gunnison’s materials costs run above the national average.
Council raised no objections to the proposal. A council member noted copper prices are at record highs, and another asked whether residents had been adequately notified; Cowan said notices went out with utility bills and were published in the newspaper and on the city website, with education beginning at the December 2025 budget adoption. A vote is scheduled for May 26.
Water and Sewer Rate Structure Under Review
Before the regular session, council held a work session with an outside rate consultant to set direction on restructuring water and sewer rates. No rates were proposed or adopted; the discussion was intended to guide staff before formal options are developed.
The central question was whether to move from flat rates to tiered (inclining block) structures for both residential and commercial customers. On the residential side, the consultant outlined a three-tier model: Tier 1 set at average winter usage (indoor-only consumption), Tier 2 at a reasonable irrigation amount, and Tier 3 at any use above that — designed to send a conservation signal. The consultant cautioned that tier break points may need adjustment if modeling shows only a small fraction of use falls in the highest tier.
Council debated whether a tiered commercial rate was appropriate. One council member questioned whether charging larger businesses more for higher usage was anti-business; others pushed back, arguing that a small office and a hospital should not pay the same rate given the infrastructure cost difference. Council reached general agreement that a tiered commercial structure is worth exploring. The consultant said segregating commercial customers into subclasses would not meaningfully complicate the cost-of-service methodology.
On the sewer side, the consultant said fewer structural options are available, and staff will return with an updated version of the current rate structure alongside a base-charge-plus-usage alternative. Council asked that any future options include an assessment of the administrative burden each structure places on city billing staff.
Parks Plan Draws Concerns Over Snowmaking, Ice Rink
Council reviewed the draft Parks and Recreation Master Plan — a year-long effort developed with consulting firm Norris Design and sub-consultant Barker Rinker Seacat Architecture. Parks and Recreation Director Dan Vollendorf presented and asked council three questions: whether the plan reflects community priorities, whether anything is missing, and whether changes are needed before adoption.
Council members generally praised the plan’s balance and clarity about what the city controls versus what would require outside funding or partnerships. One council member suggested the document felt overly hedged on budget constraints for a visionary planning document.
Two items drew substantive objection. One council member said including snowmaking at Cranor Hill Ski Area — even as a long-term possibility — is inconsistent with the city’s adopted CARES plan and climate goals, given the water and energy demands involved. The member noted the city had just spent the work session discussing water conservation and peak demand reduction, and said the city lacks the five to six acres of water storage snowmaking would require. A Norris Design representative clarified that snowmaking appears nowhere in the plan’s implementation timeline and is listed only as a conditional long-range concept. The council member maintained that even raising the premise is inconsistent with other adopted city plans.
A second council member echoed concerns about the plan’s treatment of expanded ice facilities — outdoor refrigerated ice and year-round indoor ice — saying prior council discussions had moved away from that direction given unclear return on investment and energy costs. The plan states that ice expansion is not a supported city priority due to cost projections. A third council member said the plan could remain open to privately funded ice options while the language about it being a city funding priority is already clear.
Council also praised the plan’s inclusion of arts and cultural programming as part of recreation. A question arose about whether organizations listed in the plan are partners or simply referenced; Vollendorf said both. Council asked staff to clarify whether “Immigrants” and “Juntos” listed in the plan are the same or different entities; City Manager Amanda Wilson confirmed they are different.
City Manager Wilson said staff plans to bring the plan forward for adoption at the May 26 meeting and asked council to submit any remaining edits by end of week. No council members objected to the timeline. No action was taken Tuesday.
Consent Agenda
Council approved four consent items unanimously: authorization for the Mayor to execute an agreement modifying city rights-of-way and a future amendment to ROW Easement No. 114785; a contract with RESPEC for construction administration and engineer-of-record services on the Raw Water Intake Structure project, not to exceed $402,200; a contract with DirSec LLC for IT network services not to exceed $114,586.46 plus up to $15,000 for scope changes; and a letter of support for the Community Health Coalition’s grant application to the Community Foundation of the Gunnison Valley.
Budget Amendments Approved
Council adopted Ordinance No. 2 and Ordinance No. 3, Series 2026, on second reading — both unanimously and without discussion. Ordinance No. 2 authorizes additional appropriations to support the Public Works facility expansion. Ordinance No. 3 authorizes additional revenues in the water fund to support existing appropriations for water system improvements. The city’s 2026 budget was originally adopted with total appropriations of $59,539,945.
Public Works Expansion Design Contract Approved
Council unanimously approved a $120,140 contract with Eidos Architecture to produce full design documents for an expansion of the Public Works facility. Public Works Director Pete Rice said the project aims to create a shared common area and improved restroom facilities on the eastern side of the building, where staff from different divisions currently work in fragmented spaces without adequate communal areas. Eidos was selected through a competitive qualifications-based bid process. Council will review architectural plans when they are further developed.
Announcements and Staff Reports
Mayor Diego Plata reported that he, City Manager Amanda Wilson, and Fire Chief Hugo Ferchau attended an EIAF grant presentation in Cañon City. He said the presentation went well and the city is hopeful for a positive outcome. Plata also announced the city was awarded a permit and review software implementation grant that will assist with Proposition 123 fast-track housing requirements.
Councilor Loren Ahonen reported attending a Colorado Division of Housing affordable housing developer training in Lakewood on May 7–8. The two-day, state-sponsored course covered the financial basics of affordable housing development. Ahonen said a session is available in Monte Vista in June and recommended it to other council members and staff. Mayor Pro Tem Marisela Ballesteros reported that Welcoming America selected Gunnison as a featured city and plans to visit in June.
Police Chief Sam Costello addressed council in recognition of National Police Week, observed May 10–16. Parks and Recreation Director Dan Vollendorf notified council that construction on Spencer Avenue starting the following week will close the rec center’s south entrance for approximately two weeks; the east entrance off Colorado Avenue remains open. The city coordinated with the Gunnison Rural Transportation Authority to temporarily reroute its bus stop to a location on Spencer Avenue near B&B Printers.
Western Colorado University SGA Vice President for External Affairs Townes Bakke reported that Hannah Brown was elected SGA president, Justin Smith will take over Bakke’s liaison role in August, and the treasurer position remains unfilled. Bakke also noted 2026 marks Western’s 125th year as a higher education institution, with celebrations planned in August.
Public Input
Two residents spoke during public input. Joe Dix thanked City Manager Wilson for meeting with him on economic development ideas, and praised Public Works for prompt ditch maintenance. Brooke Xanatel, a Western Colorado University professor, invited the public and council to the Ditch Picnic Celebration and Blessing on Saturday, May 16, at Legion Park from 10 a.m. to 1 p.m. Xanatel, who serves on the Upper Gunnison River Water Conservancy board, noted that keeping Gunnison’s town ditches flowing supports river levels downstream through the summer.
The meeting adjourned at 6:42 p.m.
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