By Lisa Cyriacks
Water users can expect to pay increased rates in 2026 with the approval of a rate increase.Â
The 2026 budget adopted by the Baca Grande Water and Sewer District (BGWSD) Board of Directors increases monthly rates for water and sewer and water consumption. New rates will take effect on Jan. 1.
Base rates for residential users will increase as follows: water will rise 5% (from $48.13 to $50.54) and sewer will rise 10% (from $40.73 to $44.80), for a new combined monthly base rate of $95.34.
The Town of Crestone, under the 2025 intergovernmental agreement (IGA), will also pay an additional 10% in fees starting in 2026. While the IGA extends over 20 years, the monthly fees paid by Crestone will be adjusted annually at the same time as rates for BGWSD residential customers. The 2025 IGA also provides for the district to receive an impact fee based on the district’s current wastewater fee amount for each new customer added to the town’s system.
Crestone will also pay a proportionate amount based on usage for any future capital improvements to the wastewater treatment plant and corresponding connection infrastructure.
The base rate will now include 2,000 gallons of water, which is half the amount previously covered. Additional tiers of water volume rates were added for usage above 2,000 gallons. Customers most likely to be impacted are those who irrigate gardens. The addition of these tiers is designed not only to capture more revenue, but also to address billing inequities between low-volume and high-volume water users and to encourage conservation of water.
Additionally, the board approved a temporary mill levy reduction for the year 2026. The reduction totals 4.25 mills, bringing the total mill levy down from 54.000 to 49.75 mills. This temporary reduction will be reflected on 2026 property tax bills. This reduction is part of property tax relief approved by the state legislature in 2024, which also limits how fast property tax revenue can grow.
The overall assessed valuation of the BGWS District increased by 13.56% due to a number of properties being reclassified correctly from vacant land to residential homes. This added approximately $107,000 to property tax revenue. Both the General Fund and Debt Service Fund benefit from this increase.
2026 capital projects
Water: the District’s Enterprise Fund will benefit from a combination of grants and loans in 2026. The Colorado Department of Local Affairs has awarded $750,000 from the Energy-Mineral Impact Assistance Fund for water system improvements. The district has also received an additional $823,000 through a combined grant and low-interest loan from CWRPDA (Colorado Water Resources and Power Development Authority), also for water system improvements. Of that amount, $530,353 will be forgiven, and the remaining balance will convert to a 20-year loan at a 1.5% interest rate.
These monies are to restore the Mobile Home Estates (MHE) well to operational status, renovate the existing storage tank and pumps, and build in redundancy systemwide. A bulk fill station will be built at the golf course allowing for dual purposes of individual customer fill-ups and a fire-fighting water source. Also, the two main wells—17 and 18—will benefit from pumping capacity upgrades.
Wastewater: in September this year, a USDA loan application was submitted for $6.6 million for the rehabilitation and improvements to the existing wastewater collection and treatment facility. The board and staff considered multiple approaches as it evaluated and eventually selected this alternative.
Evaluation factors included design criteria, environmental impacts, land requirements, construction problems, operational aspects and overall cost.
A no-action alternative was quickly dismissed along with consolidation with the nearest municipality with an existing treatment facility (Town of Saguache). The Town of Crestone relies on the BGWSD for the treatment of its wastewater.
The decision to rehabilitate the existing 24-plus-year-old plant includes multiple upgrades and revisions to address existing health and safety issues for staff and the public with the added benefit of expanding capacity utilizing a range of pre-treatment options. The result will add years to the life of the plant and bring it up to current codes, according to the board.
The loan application is currently under review and due to restructuring of the USDA on the federal level, the district anticipates approval and funding will not happen until the last quarter of 2026.
These capital improvement projects were approved unanimously by the board after months of review at the 2026 Budget public hearing.