City sewer, water rates could rise

The City of Columbia Falls may be forced to raise sewer and water rates this year.

City Manager Bill Shaw presented the City Council several scenarios Tuesday under which rates may have to be raised to cover expenses.

Possible increases for the base sewer rate ranges from $.50 to $2 per month. Water rates could also see a slight hike.

In 2006 the sewer rates increased to cover the cost of upgrades to the city’s wastewater treatment plant. Under that the rate was raised $1 per month, adding another $1 each year.

Currently the charge is $3 per month.

“It isn’t as rosy as I’d hoped two years ago when we started this rate structure,” Shaw told the council.

The project would replace or upgrade existing equipment in the system which has become worn out. Originally the upgrade was expected to cost about $3.5 million. However, rising costs have inflated that number.

The city late last year awarded bids on the beginning stages of the plant upgrade. Expected expenses from that are about $800,000. While estimates for the rest of the project are over $3 million.

Engineers will soon finish the designs for the upgrade which includes a 15 percent contingency for the project. But until the project goes out for bid the city won’t really have an exact idea of the cost.

“We’ll continue to design the project and when we get the bid we might decide to proceed immediately, delay six months or raise rates more,” said Shaw. “We could delay six months to a year and that could make all the difference in the world.”

Shaw said the city could have a better idea in mid-April to May about what path to take.

The city is also waiting for confirmation of previously promised grant money from the federal government. Tuesday the council also approved a resolution asking for funding of the project to be included in the economic stimulus bill currently being considered. But neither of the funding sources are a done deal yet.

Another unknown is plant investment fees, which are collected as new customers hook into the city’s system. The amount collected under those fees has risen over the past several years.

Between 2003 and 2008 the amount collected rose from about $100,000 to $160,000.

With a slowdown in building and the economy, the city won’t likely see that kind of money. The current budget projects less than half of what was collected in 2008, but with half the fiscal year over the city doesn’t expect to collect the full amount projected.

Shaw warned the council that raising base rates might not be the complete solution either.

Sewer usage volume have decreased even though new customers have been added to system since 2007-2008. Both sewer and water rates are have a base charge and also charge based on used volume.

In the past the city has refrained from raising water rates at the same time as raising sewer rates.

“In the last few years we’ve been careful not to raise water because we have raised sewer rates,” said Shaw. “The problem is that wen we raise the rate people may use less water.”

With recent layoffs in the community, the city is also seeing an increase in the number of people unable to pay their water bill.

City Finance Director Susan Nicosia said the city is setting up payment agreements with folks who are having a difficult time paying.

She said they’ve seen about double the number of people who are late with payments as normal in recent months.

Nicosia noted that the city is willing to work with anyone who is having a hard time paying.

Folks with questions or who would like to set up an agreement are asked to stop by City Hall at 130 Sixth St. W. or call 892-4391.