Missoula County outlines $10.5–$11 million Lolo RSID plan, says impact fees will cover growth share

Missoula County public works staff on Monday provided an update on a proposed RSID capital project to increase redundancy and capacity for Lolo's water and sewer system, saying the work will cost roughly $10.5 million to $11 million and that the portion attributable to new development will be paid with impact fees.

Jason Mitchell, chief public works officer, told the Lolo Community Council the county recently passed a resolution enabling impact fees intended to offset the growth portion of the project. "So out of the, $11,000,000 that it's gonna cost to create redundancy and growth, 3,000,000 to that is growth," Mitchell said, describing how growth-related costs are allocated to new connections rather than current users.

County staff said the project will include an additional clarifier, upsized mains to improve fire flow up to the hill, and other system improvements. Mitchell said the county will add roughly 170 properties to the RSID boundary that had been receiving service without previously paying into the district; about 30 properties without water or sewer connections were removed from the assessment roll.

The county is pursuing multiple financing strategies to limit the effect on existing ratepayers. Mitchell said the county received about $1.75 million from a source he named "Zinky" to lower the net cost and is pursuing low-interest loans and forgiveness through the Department of Environmental Quality. "With that 1.7 deduction and the 3,000,000 growth portion being excluded from the burden of the current users, I think it really looks about, like, 19 to $22 per month, depending on the interest rate," he said.

Mitchell and council members discussed how impact fees may be applied. He explained that state/local code limits impact fees to expenses tied to expansion and growth and that funds are held in an account until used for eligible capital work. He used a storage-tank example to show that only the incremental capacity attributable to growth — not existing service needs or routine operations and maintenance — can be funded with impact fees.

Council members asked for clarification about earlier materials that referenced different impact-fee totals; one member noted a letter that referenced roughly $8 million and asked how that related to Mitchell's $3 million figure. Mitchell said the difference related to what impact fees may legally cover versus other funding sources and that the $3 million referenced in his presentation was the portion attributable to growth under the impact-fee rules.

Mitchell also described connection-charge arrangements for specific subdivisions. He said an earlier agreement left 56 Bell Tower subdivision connections charged at a prior $3,000 connection rate; remaining future connections at that site will be charged current impact-fee rates (Mitchell estimated roughly $17,500 per additional home for a one-inch service connection, with larger services paying more).

On fire protection, Mitchell said some mains would be upsized (for example, from 8 inches to 10 inches) and that plans include phases to add hydrants and increase fire flow, though he and staff are prioritizing only the work they consider essential to control costs.

Mitchell said the county has secured water rights for wells 1–3 and is working to expand the recorded "place of use" for well 1 to ensure sufficient supply as the system grows.

The council did not take formal action on the project during the meeting; Mitchell said property owners in the affected RSID will receive postcards and have a 30-day protest period when formal boundary or assessment actions are proposed. The county plans to return with more detailed notices and formal steps as the proposal moves forward.