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Public works committee hears study showing steep sewer rate jump to fund plant repairs
Summary
Staff presented a rate study showing an initial modeled 50% sewer increase (about $21.16/month on a $42.31 bill) to pay for near-term capital repairs, warning reserves could be depleted by 2028 without action; no council vote was taken.
Trent, a public-works staff member, told the Deer Lodge Public Works Committee that a utility rate study prepared with a consultant shows the city’s wastewater fund faces near-term capital needs that would require substantial rate increases.
"If we do not increase rates, projected rates by 2028, we will not have any money in the reserves or in our fund," Trent said, summarizing model projections that show the fund barely above the state-recommended operating threshold now and declining thereafter.
The presentation laid out several concrete factors driving the pressure on rates: a set of capital projects pulled from the capital improvement plan (including a second and third clarifier, a new fine screen and a replacement compactor) that Trent estimated at about $7.5 million; an effluent meter that was found out of compliance during a DEQ inspection (it reads about 11% versus the required within 10% of the inflow meter); and ongoing operating-cost growth modeled at roughly 3% per year.
The modeled rate path presented would begin with a 50% sewer increase in the first year — which Trent said would add about $21.16 per month to the current sewer charge of $42.31 — followed by a 20% increase the next year and smaller increases thereafter. Trent offered a five-year example in which customers could see roughly a $46.78-per-month increase in sewer charges under that scenario.
Trent also explained the Commerce Department’s "target rate" analysis, which ties combined water and wastewater user charges to median household income for grant eligibility. He said Deer Lodge’s 2023 median household income is $53,676 and that Commerce’s target for combined water and wastewater would be about $102.88; the modeled path would put combined user rates slightly above that at $104.31. ‘‘Showing a plan to reach target rates increases our competitiveness for larger grants,’’ Trent said.
Committee members asked about the immediacy of the capital needs; Trent said several items are imminent and cited a preliminary engineering report completed three to four months ago. He also noted the city is already applying for grants but that meeting or demonstrating a plan to meet target rates will improve chances for the larger awards.
The committee did not take a vote on rates at the meeting. Trent said Waterworks (the consultant) will present the same slideshow to the full council in early July so council members can review model details and next steps.
The next procedural step indicated in the meeting was to present the study to the full council; no ordinance, resolution, or rate adoption occurred at this committee meeting.
