Libby City Council discusses what to do with '940 credit'
A discussion begun at the Dec. 6 meeting of the Libby City Council’s water and sewer committee — about redirecting a monthly customer credit toward infrastructure projects — was continued at Tuesday night’s meeting of the entire council, where Mayor Brent Teske encouraged residents to discuss the issue with their council members.
The 940 credit — so-called because it amounts to $9.40 a month per customer — was put in place to help offset a rate increase that followed construction of Flower Creek Dam. The credit itself is offset by an annual settlement between the city and International Paper — following the creosote contamination of groundwater from its mill site — that city officials expect to end in 2019.
“We’re looking to try to bank some of that money for infrastructure projects,” Teske said by way of introducing the topic at Tuesday’s City Council meeting, adding that the settlement funds are a “logical source” of the matching funds many sources of public funding require.
“We all knew sooner or later (the settlement) would go away,” he said, adding that he understood the hardship the lifting of the 940 credit might cause some residents.
Council member Kristin Smith said she was “a big fan of leveraging our monies” for the greater good, and council president Peggy Williams said if the 940 credit were to continue the city would likely have to borrow money to apply toward infrastructure projects, “then rates would go up anyhow.”
City Council member Gary Beach, who sits on the council’s water and sewer committee, said the committee estimated that abolishing the 940 credit could provide $200,000 to $300,000 in matching funds for projects that potentially could keep rates lower in the future.
At the Dec. 6 committee meeting, City Administrator Jim Hammons and committee chair Brian Zimmerman both noted that using the 940 credit as seed money aligns with the preliminary engineering reports the city is preparing to identify and prioritize improvements to the city’s water and sewer systems.
Tuesday night, Beach walked people through the committee’s proposal that, in lieu of the monthly 940 credit, city water customers be offered a watering credit for three or four months during the summer in the amount of 3,000 to 5,000 gallons per month. According to Zimmerman’s calculations, doing so would cost the city $48,892.86 to $108,651.60 in lost revenue, depending on the amount and duration of the credit, which would be more than offset by the amount of the annual settlement — a net of $226,000 in 2017.
During public comment on the discussion, Libby resident D.C. Orr, a member of the City Council that initiated the 940 credit, said that when the council worked out the settlement with International Paper, “we were negotiating for the people we served, not for infrastructure projects.”
Teske wrapped up Tuesday’s discussion on the matter by urging residents to contact City Council members with their thoughts about whether to keep the 940 credit or redirect it as proposed.
Contact information for City Council members can be found at cityoflibby.com/city-council/ or by calling City Hall at 406-293-2731.