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El Paso County proposes multi‑year rate increases for East Montana water users as officials seek funding for $6M tank
Summary
County staff and a consultant proposed a five‑year plan that would raise East Montana water rates roughly 10% in the first three years and increase sewer charges 5–6% initially, driven mainly by a proposed $6 million elevated storage tank and wholesale cost increases. Commissioners asked for more grant and pass‑through detail and delayed a final vote to July.
El Paso County public works staff and a hired consultant on Tuesday presented a five‑year financial plan that would raise water and sewer rates for customers served by the East Montana water system to cover operating costs, reserve targets and capital projects including a proposed one‑million‑gallon elevated tank.
Andrew Ream, the county’s consultant, said the single largest driver is the planned elevated tank — currently estimated at about $6 million — and forecasted wholesale price increases the county pays to El Paso Water. “We’re projecting overall rate revenue each year needs to go up 10% this upcoming fiscal year,” Ream said, and recommended repeat adjustments in subsequent years to meet debt service coverage and reserve targets.
The five‑year scenario presented would raise the typical residential water bill (a three‑quarter‑inch meter, about 8,000 gallons per month) from roughly $70 today to $77 under the first proposed increase, and increase the combined water‑and‑sewer monthly charge for a typical customer by about $10 in the first year. Sewer customers — a smaller subset of users billed for winter indoor flows — would see a smaller initial step: Ream and public works staff proposed a 5% increase for the first year and modest increases afterward.
Public Works director Bernie Dundes and Ream said the county plans a mix of funding for the elevated tank: an awarded federal appropriation and other grant applications, internal reserve funding and potential borrowing to cover the remainder. Dundes said the county had secured approximately $700,000 in congressional appropriations for the project and remained actively applying for additional grants to reduce borrowing needs.
Commissioner Jackie Butler pressed for more transparency on how much of customers’ bills pay for wholesale water versus local system costs and asked whether grant awards could reduce the proposed increases. “These rate increases are scary,” Butler said; “they’re going to be cost prohibitive to so many people who live in the county.” She requested a clear breakdown of the portion of rates that are pass‑through wholesale charges and the portion that funds county operations and capital.
County staff agreed. Andrew Ream and Public Works said they would produce a line‑by‑line breakdown of wholesale pass‑through charges from El Paso Water, the county’s operating cost share, and the capital funding plan — including grant awards, pending applications and expected borrowing options.
Judge Sango and several commissioners said the budget timing required additional detail before adopting rates. The court voted to postpone final approval and asked staff to bring comparative data — including how East Montana rates compare with other regional retail water rates and the percentage of bills attributable to wholesale purchases — at a reconvened meeting in July (targeted for July 27). The delay gives budget staff and auditors time to reflect any changes in the FY27 budget.
What’s next: County staff will compile the requested breakdowns, update grant award and application status, and return to Commissioner’s Court with revised rate tables and comparative regional pricing before a final vote. If adopted, the first rate step would take effect October 1, 2026.
