Whitefish studies city water rates

Recommendations from a water and wastewater rate study for the city are expected to be released next month. 

The city of Whitefish contracted with AE2S last spring to begin the study, which includes a rate structure analysis including the review for compliance with state law, capital project financing analysis and recommendations for the city moving forward.

“While we do regular rate increases based upon the Consumer Price Index, it does make sense on regular intervals to do a full cost of services rate study,” Public Works Director Craig Workman said.

The last time the city conducted a water rate study was 1998 and a wastewater rate study was done in 2009.

The current study provides a review of the water and wastewater rate structure and looks at its advantages and disadvantages. It is expected to outline whether the revenue being collected is in line with current expenses, while also allowing the city to save for capital projects.

The study is also designed to help prepare the city for new regulatory standards expected to be implemented by the Montana Department of Environmental Quality. The city’s existing wastewater treatment plant is not expected to meet the new standards. A new wastewater treatment plant is estimated to cost $15 million to $20 million.

A work session last week updated council on the study. Council provided some initial direction to AE2S before the firm presents the final results and recommendations in March. Council will still have to vote on any changes to water or wastewater rates.

Early results show that the amount being charged for irrigation is not covering the city’s cost for providing that water, according to AE2S, and therefore the other water users are subsidizing that.

Whitefish customers receive a reduced charge for water used on lawns, gardens and landscaping and an averaged sewer charge during the five monthly billing periods from June through October. Residential customers can also purchase a separate irrigation meter.

Council asked AE2S to present options for a potential rate increase that would put the rate used for irrigation in line with the cost of providing service.

Councilor Richard Hildner said rates shouldn’t be increased all at one time.

“I think we need to have AE2S to [present options] for rates that would move toward charging the full cost for irrigation,” Hildner said.

Councilor Frank Sweeney said the city doesn’t want to encourage people to maintain green landscapes by watering.

“I have a mixed mind about how we want to burden the irrigation customer because as we all know, the best way to drive conservancy is to increase costs,” Sweeney said. “We have to deal with the disparity of cost, but we need to be careful about how we do this.”

A second issue pointed out by AE2S is how the city handles low income water and wastewater rates. Currently, senior citizens age 65 and older can qualify for Whitefish’s reduced rates regardless of income. However, AE2S is recommending the city modify its policy so that customers qualify for the discount based income.

“It should be income based, not age-based,” Councilor Andy Feury said simply.

Currently, the city has 400 water users that receive the rate discount. The city has 16 water accounts currently that are eligible for a discount under proposed Low Income Energy Assistance Program requirements, but that number could increase as more apply for an income discount.