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Gallatin consultants recommend phased water, sewer rate increases to cover $100M in planned projects
Summary
Consultants told Gallatin City Council Committee a two-year phased volumetric increase would close most of a $3.3 million water shortfall and nearly $1.7 million sewer shortfall as the city plans roughly $100 million in future debt-funded projects. Council asked staff to return with ordinances and a senior assistance program for rates.
Consultants from Jackson Thornton presented results of a city-commissioned cost-of-service study for Gallatin’s water and sewer utilities, recommending phased volumetric rate increases and modest customer charge adjustments over two years to begin absorbing the debt service tied to roughly $100 million in planned capital projects.
The firm told the City Council Committee the water system needs about $16.2 million annually to cover operations, debt service and pay-as-you-go capital; current rate revenue covers roughly 80 cents on the dollar. Jackson Thornton recommended a two-year, volume-based increase for inside residential water customers — 15¢ per 100 cubic feet (CCF) in year one and 15¢ in year two (30¢ total), which the consultant said would add about $1.6 million based on 2024 usage and move overall cost recovery to about 90¢ on the dollar. Consultant Jim Marshall said a typical residential customer (about 6 CCF/month) would see about $1.80 per…
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