City officials back down on water, sewer rate increase

Apr. 19—In a somewhat predictable move, Libby City Council decided to walk back its proposal to raise water and sewer rates at its April 15 meeting.

City Administrator Sam Sikes, Mayor Peggy Williams and city councilors have caught a lot of flak for the rate increase plan it put forth at a March 4 council meeting.

At Monday's meeting, city council chambers were standing-room only as residents and business owners reiterated their concerns with increases that many say would inhibit further business growth and potentially put people out on the street.

The council will take up the issue at a work session at 6 p.m. Monday, April 29.

Councilor Kristin Smith made the motion to place the rate increase into old business and into a work session so, "we can consider questions and comments from the public."

City officials have argued for the increases to maintain and replace old and aging infrastructure, including water lines and at the sewage treatment plant.

But those questioning the rate hikes are wondering why the city isn't seeking grants or loans to reduce the costs.

"(Sen.) Jon Testor got $42 million for sewage infrastructure and Kalispell got $11 million," Maureen Stevenson said. "Why aren't we getting some of that money?"

According to a 2021 press release from Tester's office, the bipartisan Infrastructure Investment and Jobs Act, U.S. Senator Jon Tester today announced $63,041,000 in Environmental Protection Agency (EPA) funding for communities in Montana to invest in critical wastewater and drinking water infrastructure projects.

According to a Nov. 19, 2023, story in the Daily Inter Lake, the Evergreen Water and Sewer District received $11 million for an infrastructure upgrade.

"It's massive," Cindy Murray, the district's general manager, said of the suite of projects set to be completed by the end of 2025.

With a service area of about 8 square miles, the district serves a population of approximately 8,500. It is the largest combined water and sewer district in the state.

City resident John Bebee said, "Kalispell got $1 million for a drainage ditch! What we need is critical. We're to help, let's fight together."

Beebe was referring to a project in Kalispell to replace concrete pipe in a main leading to the city's wastewater treatment plant.

According to reporting in the Daily Inter Lake, the $1.7 million project was funded partially with federal money. The $347,957 awarded to the city for the project via the American Rescue Plan Act — signed into law by President Joe Biden in 2021.

Resident Jennifer Nelson spoke to the importance of what the city is trying to do.

"I know you've taken a lot of criticism; it's difficult when you have to balance a budget," Nelson said. "It's overdue and I appreciate you not kicking the can down the road.

"But it needs to be equitable. I was surprised to hear not every home is paying their share."

Nelson also said the $3.12 sewer rate increase passed in 2020 needs to be honored. According to the resolution passed, it was in effect through 2025.

In a statement from Mayor Peggy Williams, she said the city has been and will continue to seek state and federal grants for Capital Improvement water and sewer projects.

"When ARPA was allocated by the state, the funding was distributed in multiple phases based on population and competition," Williams said. "The city received $712,000 in direct allocation and $573,492 in additional infrastructure grants. The city put in for a competitive grant but did not receive the funding. ARPA funds were used to replace Libby Police Department radios for officers and patrol cars, to upgrade the Cabinet Heights Water Main, to install a new bar screen at the sewer plant and will be helping pay for the wastewater plant controllers and several sewer main replacements."

Williams also said the city currently has $2.6 million in grants through RRGL, DLA, CDBG, MCEP and the DNRC on the board and has closed out millions more in the past couple of years for water and sewer improvement projects.

"The MCEP grant of $460,000 for the Libby Creek Community will have no impact on other city grants and will construct three blocks of water main on Cedar Street improving flow and pressure in the system," Williams said. "One thing about grants the city has been trying to communicate, that has not been heard; grants are not meant for and cannot be used for, the annual maintenance and operations of water or sewer departments. Base rates pay for maintenance and operation while grants help pay for Capital Improvement Projects."

At the March 4 council meeting, councilors approved a resolution of intent to increase rates for users, inside city limits and those outside who are connected, of the municipal utility system.

City administrator Sam Sikes and Williams say they are justified in seeking the increase because of the work that needs done replacing water line mains, at the old dam and at the water treatment plant.

"We're looking at $30 million to replace 2-inch, 4-inch and 6-inch water mains," Sikes said. "We'll need $3.4 million to dredge the lower reservoir and fixing the concrete, which has led to water leaks. And we'll need $10 million for work at the water treatment plant."

In terms of work done at Cabinet Heights, Williams said, "Using the ARPA grant funding on the Cabinet Heights project was wise because it was for public health and safety. The Cabinet Heights area was identified as having zero or negative fire flows which

prevented the Libby Volunteer Fire Department from utilizing the fire hydrants. The city was paying to maintain fire tenders in case of a fire emergency. The lack of fire flow made it possible that ground water could weep into our water main and contaminate city water in the case of an emergency. By upsizing the line, the city mitigated both the health and the fire safety concerns in the area."

Sikes also said there is equipment in the 40-year-old sewer treatment plant, "that's gonna need replacing in the near future."

He also said that the city has a current debt of $9 million for water and sewer projects it has undertaken in the past.

Sikes also said there were 23 major water line leaks that needed to be fixed. Sikes mentioned the numerous water leaks that have cost the city $100,000 over the years.

City councilors approved higher sewer water rates in January 2020. Under the reworked system, residents paid a flat monthly fee of $29.75, up from $26.63. The city charged an additional usage fee of $2.85 per thousand gallons from October through May. During the summer months — June through September — residents paid a usage fee based on the average water consumption of the prior eight months.

Customers, residential or commercial, living in the city or county currently pay $33.48 per month for sewage services.

Under the current proposal, residential customers on a three-quarter inch sewage line would pay $43.92 per month. Those on a 1-inch line would pay $52.71.

For commercial customers, those on a three-quarter inch line would pay $52.71 per month for sewage services while those on a 1-inch line would pay $63.25 per month. The rates go as high as $395.29 per month for users on a 6-inch line.

Water rates vary depending on where customers live.

For city residents on a three-quarter inch line, the monthly rate is $45.25 while county residents pay $56.60. City commercial customers pay $56.37 and county commercial customers pay $70.37 per month.

Residential customers in the city on a 1-inch line pay $46.55 and county customers pay $56.23. For commercial users in the city the rate is $74.97 per month and in the county, it's $93.59. For fire suppression, rates for all users range from $46.02 for a 1-inch line to $109.37 for a 6-inch line.

In addition, there are charges per 1,000 gallons of water and sewage and proportional amounts for gallons used in increments other than 1,000 gallons.

Under the new proposal, city residential customers on a three-quarter inch line, the monthly rate would be $55.81 while county residents would pay $69.81. City commercial customers would pay $69.54 and county commercial customers pay $71.91 per month.

Residential customers in the city on a 1-inch line would pay $57.42 per month and county customers would pay $70.42. For commercial users in the city the rate would be $92.48 per month and in the county, it would be $115.43. For fire suppression, monthly rates for city users would range from $57.42 for a 1-inch line to $140.19 for a 6-inch line.

For those in the county, fire suppression monthly rates would range from $70.42 for a 1-inch line to $171.92 for a 6-inch line.