The rates would become effective September 1, 2023 (with the October 2023 billing cycle). Increases would be phased in over a four-year period.
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The City recently completed an update to the Water and Wastewater System Facility Plans. The Facility Plans identified numerous critical improvements necessary to ensure the future sustainability and reliability of both systems. The critical needs include the replacement and rehabilitation of aging infrastructure and to ensure compliance of required regulatory mandates to protect public health and safety. If approved by City Council, the rate increases enable the City to make important investments in the systems over the next few years, while also keeping up with the impacts of inflation in the general operation of the systems, and maintain our commitment to the City’s future growth and sustainability.
Water admin/fixed monthly rate was last adjusted in 2019 with a proposed 7-year rate increase schedule.
The proposed increase is only for the water rate. The water and sewer utilities are two separate funds that do not overlap. The proposed increases are designed to fund maintenance, operations, and specific infrastructure improvement projects as they are scheduled to occur over the next several years.
The increase in the first year is necessary to meet past and current capital funding costs and to meet the required bonded debt coverage. The overall adjustments in the first year provides funding for several capital funding components. First, the additional revenue is needed to meet existing long-term borrowing annual payments. Second, with the regulatory required improvements, additional long-term borrowing is planned to implement the required infrastructure. Finally, with long-term borrowing, the City has a policy, and is required, to maintain sufficient revenues for debt service coverage ratios. The sum of these three components, necessitate the overall increases in the first year for water and sewer. Unfortunately, these increases cannot be spread out over time as the City would not meet the financial requirements to fund the necessary infrastructure improvements.
Yes. The proposed rate increase applied to all water consumption including sprinkling/irrigation and domestic household/sprinkling alike.
The fixed charge supports recurring utility expenses such as electricity, fuel, natural gas, insurance, rent, debt service, and employee costs and benefits.
The consumption charge is based on your metered water usage each month. You are billed for every 1,000 gallons of usage you consume each month. The sewer consumption charge is also based on flow/usage through the water meter.
The monthly meter charge is based on the size of your water meter (normally a ¾” meter for residential). The fee pays for the cost of replacing water meters when they reach the end of their service life.
The City is transitioning to an Advanced Metering Infrastructure (AMI) system and as part of this project, will be installing new “smart” water meters. These meters provide both you and the City with many benefits, including better tools to monitor our system, enhancing proactive maintenance, and ensuring that very little water is wasted from costly leaks or breaks. When your current water meter is changed out with a “smart” meter you will incur a monthly hosting fee of $0.89 and you will have access to your water usage data 24/7. The online customer portal will show you how much water you’re using on a daily and hourly basis. You can set up water alerts that will notify you about continuous water flow that could be from an undetected leak. Knowing your daily and hourly water use can help you make informed decisions about using water efficiently. This can help you save money on your next water bill.
Our water and sewer systems operate service 24 hours a day, 7 days a week, 365 days a year. System operation, maintenance and improvements must be completed throughout the year and these fixed costs are funded by water and sewer base rates. The rate structure is based on a cost of service analysis that includes these fixed costs to cover non-consumption expenses such as customer service and billing, debt payments, and maintenance and operation (M&O) of the water and sewer systems that benefit all of our customers on a year-round basis. Additionally, water and sewer rates cover infrastructure improvement, rehabilitation and replacement projects that are necessary to ensure safe, reliable, and continuous operation of our systems.
Percent increases were applied to the revenue amounts as developed in 2019 rate study. In 2019, the City hired HDR an experienced, independent engineering consultant in the water and sewer utility industry to conduct a cost-of-service study that examined current and future revenues, as well as evaluate operation and maintenance expenses, and determine an adequate funding level for Kalispell’s utilities. HDR performed a comprehensive cost of service study to determine whether existing rates were sufficient to meet the system rehabilitation and replacement needs as well as the City’s operational costs for the water and sewer systems. Our current rate structure was also assessed for compliance with industry best practices.
The City has determined additional annual rate increases are necessary over the next four years in order to continue providing reliable and sustainable water services into the future.
The proposed increases to water rates are triggered by many factors including:
If the rate adjustments are not approved, the City will stop progression of planned capital improvement projects and roll back the timeline by which these necessary investments can occur. The City will see more frequent equipment and infrastructure failures resulting in increased service outages, spills and operational impacts. Costly replacement and emergency repairs will increase, along with regulatory non-compliance which leads to fines and eventual increases in costs from the postponement of required projects. Additionally, construction of water system improvements specifically focused on firefighting flow, capacity and availability will be delayed or outright canceled.
You benefit from the assurance that your delivered safe, high-quality water to your home, businesses, and schools, and the water mains are maintained to deliver water on demand and capable to be used for fire protection. The prudent operations and maintenance of the water and sewer utilities protect you, the environment, public safety, and our water resources. The rate increases also allow for the City to maintain the current level of service by allowing for the replacement of aging infrastructure. This will minimize the need for larger future rate increases as a result of deferring infrastructure improvements.
State law requires that customer-based fees/revenues must be used only to pay the costs associated with operating and maintaining the water utilities in compliance with State and Federal regulations. Revenues may not be used to pay for other City services such as streets, parks, or snowplowing.
Revenue from utility rates support the costs of maintaining, operating and supporting our existing system, funding for capital projects, and covering debt service on the bonds issued to fund the capital improvement program. Impact Fees are a one-time fee applied to new construction to provide revenue to the utility to finance all or a part of the capital improvements needed to serve and accommodate new customer growth.
The amount of water you use affects your usage charge. When you use less water, you pay less. You can get the biggest water savings in your home by installing efficient fixtures and fixing leaks. A constantly running toilet may waste about 8 gallons per hour, or 200 gallons per day. Left unnoticed, a running toilet could waste over 6,000 gallons per month. Ensure you are only watering the lawn when needed and adjust your sprinkler system, so you are not watering the gutters.
The City will be hosting an Open House to answer any questions on the proposed rate increases on Thursday July 6, 2023 from 4:30 p.m. – 6:30 p.m. in the Council Chambers at City Hall, or you may call (406) 758-7720.