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DEQ outlines drinking-water fee to cover federal funding gap; League asks staff to compile member concerns
Summary
The Division of Drinking Water described a fee package under Senate Bill 80 to fill a projected $5.6 million gap if federal funding falls; members raised collection, equity and regional impact questions and voted to have League staff compile a letter of concerns for DEQ.
Nathan Lonsaad, director of the Division of Drinking Water, told the Local Policy Committee the division will seek public feedback on a fee structure authorized by Senate Bill 80 to address a projected federal funding shortfall.
Lonsaad said the division’s proposal uses a consumption-based approach required by the statute: a $25 charge up through the first 10,000,000 gallons and just over $0.03 for every additional 1,000 gallons. He said the structure includes an ‘‘incentivized’’ and a ‘‘non‑incentivized’’ category and that wholesale, agricultural and industrial water supplies are exempt under the statute. The division posted system-specific estimates based on 2024 data and invited written feedback through a web form and a QR code shared in the presentation.
Members pressed staff on collection and equity: several asked whether the fee could be billed via property tax or appear as a line item on local water bills; Lonsaad said the division will not dictate local collection mechanisms and will provide flexibility to systems. Mark Christiansen and others criticized a per‑consumption fee as potentially regressive and asked why agriculture and industry were carved out; the division and League staff said those exemptions reflect compromises made in the legislative process.
Lonsaad said the division estimates a potential budget gap of about $5,600,000 under the most significant federal cut scenarios and that the fee would go into effect with the division’s first payment date of July 1, 2027, contingent on final federal appropriations and rulemaking.
After the presentation and a series of questions, Gary Hill asked staff to draft and submit a summary of LPC concerns to DEQ. The chair opened a motion, Speaker 8 moved the formal motion and Mayor Tran seconded; the assembly voice-voted in favor and the motion carried. Staff will compile member feedback and submit it to DEQ ahead of the formal public comment period.
Next steps: DEQ will accept written comments through its webpage and hold a formal public comment period in September; League staff will circulate the compiled LPC letter to members and to DEQ.
