Utility fees could increase

The Whitefish City Council listened to proposals to raise rates for sewer and garbage collection during a work session on Monday. A public hearing on the changes will likely take place in April.

Public works director John Wilson explained that the city "is faced with the dilemma of financing major capital improvements during hard economic times," and a sewer rate increase could help fund two projects.

One project would save the city money in the long run by reducing the volume of wastewater that goes to the sewage plant for treatment. An estimated 78 million gallons of "clear water" enters the city's collection system through leaky manhole covers and defects in sewer mains.

Replacing or repairing 44 manholes and 10,325 lineal feet of sewer mains would also reduce surging in the city's sewer lift stations and help address the danger of sewage spills caused by high flow events. The city was responsible for sewage spills in 1995 and 2006 that were investigated by the state.

The city also needs an ultraviolet disinfection system for effluent discharged into the Whitefish River. The system is not currently required, but the state will require it in the future, Wilson said. State standards have been tightened to address bacteria in the discharge, he said.

The two projects will cost about $1.5 million. The state recently received two state grants for the projects totaling $600,000 along with $135,000 from the Army Corps of Engineers.

The final piece of the funding package will be an $865,000 low-interest state loan, but because of the wastewater fund's present financial situation, the city needs to raise sewer rates to meet the cash-flow requirements for such a loan, Wilson said.

The council agreed to bring the public works department's rate increase proposal to a public hearing. The proposed increase averages 11.2 percent and ranges from 0.5 percent for most homes to 29 percent for others.

Sewer charges for different customer classes are based on the number of times wastewater goes through a city lift station before reaching the treatment plant. Customers with individual pumps and grinders, mostly along Whitefish Lake, are also charged differently.

Greg Acton, the city's utilities operations supervisor, said a four-man crew goes out 2-3 times a week for maintenance on the lift stations and residential systems. He noted that even with the proposed increases, customers in the lowest service class would continue to subsidize the more expensive classes.

The council also listened to a proposal to raise rates for garbage collection. According to city finance director Rich Knapp, the city stopped collecting garbage and contracted with Montana Waste Systems Inc. to take over the hauling for five years beginning in May 2004.

The city continued to handle the billing, but while MWS contractually raised its rates by 2.78 percent per year, the city continued to charge residents the same amount.

MWS began by charging $5.50 per can, and the city charged residents $7.50, using the $2 difference to handle administrative costs. By July 1 this year, MWS' charge per can will have increased by 17.88 percent and the city will only collect $1.02 per can for administration.

The city was able to maintain 2004 rates for residents by spending down a $200,000 cash balance it had originally maintained in case the MWS contract didn't work out. The money, which can't be used for other city purposes, was gone by January this year.

MWS will raise their charge by 2.78 percent again on July 1, when the next fiscal year starts. If the residential rates don't change, the city will begin to lose about $7,000 per month.

Knapp proposed a $1 per can rate increase, to $8.50 per can, to keep the fund solvent. The charge for customers who leave an extra bag next to their can would also increase from $5.50 to $6.50 each time.

The city currently collects about $48,800 per month for garbage collection. That includes 72 bearproof cans, which would increase from $9 to $10.25 per can, 239 customers who have curbside recycling, which would remain at $4, and 114 customers with a second can.

The council's consensus was to propose raising rates by $1 per can this year and $1 again next year. If the second raise is more than needed, the garbage fund could build up a reserve again. The proposal will go to a public hearing.

The council also agreed that it wants a "turn-off" fee for garbage, sewer and water that will help cover costs for residences that periodically go vacant. The council also said it will support an effort by Evergreen Disposal Inc. to get state approval so it can compete against MWS.