Columbia Falls manager flags water and sewer fund shortfalls; rate study, cuts planned

City Manager Eric Hanks told the Columbia Falls City Council that water and sewer enterprise funds face shortfalls that required trimming projected sewer expenses to preserve the city’s debt capacity.

Hanks said he removed roughly $70,000 in planned sewer expenditures this year to maintain debt capacity and flagged the need for a rate study and PERS review in the spring that he expects will provide options for longer-term funding. "This year I had to take $70,000 and reduce expenditures in the sewer department of critical things we needed," Hanks said.

Hanks also identified a late accounting correction affecting the water operating fund: an audit charge of $9,387 that had been charged to water and sewer will be moved back to the general fund and the manager asked that the final resolution correct the water fund summary to reflect the change.

Why it matters: The changes signal operating stress in utility enterprise funds and could presage rate increases or service changes if additional revenue sources are not found.

Hanks said staff will return with a rate study and further recommendations in the spring. He also noted that large capital projects funded by grants — including the Glacier to Gateway RAISE grant that funds both streets and water main replacement — will be tracked separately in special revenue funds, but core water and sewer operations remain constrained.

What’s next: Council accepted the presentation and the manager will bring results of the rate study and any recommended structural changes to the utility funds back to council for review.