City officials feel justified in seeking water, sewer rate increase

The proposed water and sewer rate increases for Libby city residents and business owners has generated considerable discussion in the community, but officials still believe they are necessary.

At the March 4 council meeting, city council 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 officials will hold a public hearing in council chambers at the city building at 7 p.m. Monday, April 8. The hearing will give Libby utility customers to hear the city’s recommended changes.

Zach McNew, a former city councilor, has been very vocal with his opposition to the proposed increases. McNew said he owns about 50 properties in the county and manages an additional 250.

One of them is Park Apartments, a 40-unit complex on West Third Street. McNew said the monthly rent ranges from $450 to $1,050 and water is included in the rent. 

With the proposed increases, he predicts the monthly cost for water would go from a range of $600 to $1,700 monthly to nearly $4,000 per month.

“Landlords expect to get a 5% to 10% return on their investment, but with costs like that, it would drop significantly,” McNew said. “It’s putting a burden on the less fortunate. A developer wouldn’t come to our town to build housing with that kind of burden facing them. It doesn’t make sense financially.”

McNew criticized the current administration for not taking out a loan to help pay for some of the work that needs to be done.

“I believe it’s a huge money grab,” he said.

City administrator Sam Sikes and Mayor Peggy Williams say they are justified in seeking the increase because of the work that needs done replacing water line mains, 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.”

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 addressed concerns from people about the fairness of how it’s calculating what certain size facilities will pay for water use as well as water use at Cabinet View Golf Course.

“It’s all about the impact that a property has on a system,” Sikes said. “It’s not fair that a house pays the same as a 15-unit apartment complex. Rural Water told us we needed to increase rates.

Sikes addressed questions about the golf course not paying for water use.

“They pay for the usage at the clubhouse, but not for the raw water they use to irrigate and water hazards at the course,” Sikes said. “They have water rights and when we dammed Flower Creek, we were interfering with that, so that’s how the deal came about.”

Sikes said he has no documentation about the deal that was made between the city and golf course officials, but that it was told to him by past city officials.

The deal allows the golf course to use 10 million gallons of raw water for watering it and keeping the hazards filled with water.

Sikes said a presentation will be given to show what base rates pay for, how much rates should have been in 2023 and how rates need to be in the future.

Sikes said the last water rate increase was in 2014. If the council passes a resolution to increase it, the average customer’s sewer bill will increase $10.56 per month.

He also said the last sewage rate increase was in 2020. If the council passes a resolution to increase it, the average customer’s water bill will increase $10.44 each month.

Montana Code Annotated gives municipalities the power and authority to regulate, establish and change rates and charges in a reasonable manner.

Council member Hugh Taylor said at the March 4 meeting that a 19% increase is, “upsetting at first, but it’s necessary.”

Sikes previously pointed to the numerous water leaks that have cost the city $100,000 over the years and that the sewage treatment plant is 40 years old.

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

Under the new 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.