City Council Proposes Rate Increases
 | Author:
Linda Kent, MT43 News Staff Reporter
MT43 News Correspondent |
City Council Proposes Rate Increases
Linda Kent
MT43 News Staff Reporter
Townsend’s City Council proposed a two-phase increase in water rates during its April 30 meeting. The increase would raise revenues in anticipation of opening bids and purchasing bonds to make significant improvements to the city’s water system function and capacity.
Assuming the eventual successful bid comes in near or under the estimated price tag for the project, city water users will see increases in the monthly water rate in July 2024 and again in September 2024. The final rate after the second increase is just over $91 per month, an increase of $70 from the current rate of $20.57.
“The proposed increase is based on the current estimates of the project and other funding sources,” Townsend Mayor Vickie Rauser said. The fee increase will cover operating costs and debt service, as well as build reserves for future repair and replacement.
Having the increases in place prior to purchasing bonds for the project is necessary, Rauser said, to demonstrate to potential bond companies that the city has the funding mechanisms in place to service bond obligations.
Chris Hayes of Robert Peccia and Associates, the engineering firm contracted by the city to design upgrades to the water system, put estimates for the work at $17 million Rauser told the council at its April 30 meeting. Bidding for the project will begin after the June 1 deadline for the plans to be approved by the Montana Department of Environmental Quality (DEQ).
The 2024 timeline includes two critical milestones for determining the final monthly rate for residents. First, bids are expected to be opened and the project is to be awarded by early July. Second, the council needs to decide on whether it will pursue a 20- or 30-year bond. The former comes with a higher monthly cost but reduces the overall cost to water users. That decision will come later this summer.
The City Council also needs to establish what fraction of the total estimate will be implemented with July 1, 2024, bills. The size of the remaining increase will be by late August.
Rauser said the drive toward improving the system came following a preliminary 2022 engineering report, which found that the city’s water system – specifically the iconic 250,000 water tank – lacked capacity to meet the community’s needs for fire protection, consistent water pressure for all users, and to support the proposed Copper Springs subdivision planned for a currently undeveloped area in the town’s southeast corner.
Work will likely begin this year to replace 43 existing fire hydrants in the community and add seven new hydrants, as well as replacing 33 valves and adding another 16. Rauser said the city also expects to break ground on the transmission lines to and from the city’s wells to the site of a new 1 million gallon tank just east of the fairgrounds.
The new tank will be installed in 2025 and will be integrated into the water system in early 2026.
The current tank will be drained and removed from use as part of the water system.
