Lawmakers hear requests for Montana water and sewer grants as House Bill 11 testimony stretches through dozens of towns

Helena — Lawmakers on Subcommittee F heard testimony from municipal officials across Montana on projects the communities say are urgent and eligible for funding under House Bill 11, the Legislature’s infrastructure package for water and sewer projects.

Representatives of towns and water districts detailed dozens of projects — including tank replacements, sewer main rehabilitation, new wells and lagoon fixes — asking the Legislature to fund gaps in grant and loan packages so projects can proceed without unaffordable utility-rate spikes.

The testimony was wide-ranging in scale and location. Mike Maples, public works director for the City of Red Lodge, told the committee the city seeks $125,000 from the Renewable Resource Grant program and $500,000 from the Montana Coal Endowment Program to repair an aging sewer collection system that the city says contains more than 33,000 lineal feet of mainly vitrified-clay pipe. "Your support of HB 6 and HB 11 will help us hold the line on user rates and develop a project that is needed to protect public health and safety by reducing the potential for exposure to raw sewage or partially treated sewage," Maples said.

Other requests included the Town of White Sulphur Springs’ $1.787 million project to reinstate a surface-water source and rehabilitate a treatment plant (testimony listed $125,000 DNRC grant, $625,000 Montana Coal Endowment Program grant and roughly $1,037,000 in SRF loan/loan forgiveness). Willow Creek Sewer District asked for $750,000 to extend service to properties now on failing septic systems and bring its lagoon and lift station into compliance. Ronan described an $10.8 million wastewater upgrade the city’s representative said is needed to meet EPA ammonia standards. Small districts described much smaller but still critical needs — Martinsdale described a roughly $1.033 million Phase 2, Darby sought $750,000 for lagoon and disinfection upgrades, and Basin County asked for $500,000 for a new well and system upgrades.

Commerce staff and DNRC staff were in the room to answer program questions. Becky Anseth of the Department of Commerce told the committee that eligibility and how much grant assistance a town may receive depend on a community’s “target rate” — a standard affordability calculation Commerce uses to set minimum acceptable user-rate levels for grant eligibility. Anseth said applicants who are below the target rate are required to raise rates as a condition of funding: "For them to be eligible for the program, they must meet the minimum rate. If they are not currently at that rate, we require them to raise their rates throughout the project." Several municipalities told the committee they have raised rates in anticipation of grant requests.

DNRC noted it administers multiple grant sources and coordinates with regional water authorities; Autumn Coleman, DNRC deputy administrator, told the subcommittee DNRC is seeking up to $10 million in House Bill 11 for regional water-system grants and administration. Representatives for the Central Montana Regional Water Authority and Dry Prairie Regional Water system were present to summarize multi-community projects that would connect several towns and rural users to new or bulk treated supplies.

Committee members repeatedly asked applicants for clarifying paperwork. Staff requested updated rate tables, recent municipal decisions on rate increases, and general-fund levy figures to verify capacity to cover loan payments and match grants. Commerce said the rate information in the committee’s packet reflected applications submitted in May 2024 and that some communities have raised rates since that filing.

Testimony highlighted recurring themes: aging mains and clay tile sewer lines, failing lift stations with hard-to-replace pumps, insufficient storage for fire protection, groundwater wells with contaminants or insufficient capacity, and communities under DEQ consent orders. Several presenters described projects phased over multiple years and funding packages assembled from multiple state and federal sources including the Montana Coal Endowment Program (MCEP), DNRC renewable resource grants (RRGL), State Revolving Fund (SRF) loans/forgiveness, Community Development Block Grants (CDBG) and USDA rural development funds.

Committee business: Subcommittee F recessed for a short break and directed Commerce and DNRC to return with additional details on calculations, and asked applicants to supply updated rate and levy figures for staff review. No formal votes were recorded during the hearing.

Why it matters: Lawmakers face choices about where limited state infrastructure dollars will go. Many of the projects are in small, lower-income communities that the presenters said cannot absorb the full cost without grant assistance.

Looking ahead: The subcommittee scheduled additional briefings on target-rate calculations, DEQ compliance requirements and regional water projects at the next hearing day. Community representatives were asked to send updated rate and levy data to staff for the committee’s review.