By Michael Howell
By the time you read this article the City of Hamilton may have already raised the rates for water and sewer users in town. The issue was discussed extensively at a Committee of the Whole meeting on August 28 and was placed on the Council’s agenda for a decision on Tuesday, September 4. The silver lining, according to town officials, is that the mill levy for the general fund is going down and the lower property taxes will help offset the impact of the rising water and sewer rates.
At the Committee of the Whole meeting some concerns were expressed that the public did not understand the reasons for the rate hikes. Councilor Joe Petrusaitis said that some people had expressed to him the belief that it was to pay for a new building and raise wages, when, in fact, the improvements are being driven by stricter state regulations and the need to replace failing infrastructure in an aging system.
Mayor Jerry Steele said that past councils had been “kicking the can down the road” instead of addressing the need for a rate hike to make needed repairs and pay for ever increasing operational costs.
Engineers working for the City recommended that a replacement program be initiated that would replace 1% of the water lines per year and cost approximately $500,000 annually. The entire system would be completely replaced in 100 years. The council is considering a less ambitious replacement program that would cost about $150,000 annually and be completed in about 300 years. The replacement program would save money on ongoing costly repairs of the old lines. Repairs on the 60 miles of water lines are costing about $100,000 to $200,000 annually. The replacement program would also allow the upsizing of some lines that currently suffer from low flows. These improvements will increase fire flows and ultimately save money on insurance costs. The plan also calls for improvements at the city’s well field that could eliminate the need for a costly new storage tank.
The plan is to make incremental raises in the water rates over a three-year period. The first raise would be a 5% increase starting this October. That would be followed by another 5% increase in July of 2013 and a third increase of 13% in July of 2014.
The current base rate for water in the city is $16.59 per month and a usage charge of $.89 per 1,000 gallons. The first 5% hike in October would raise that to a base rate of $17.42 and a usage rate of $.93 per 1,000 gallons.
The average residence uses about 7,430 gallons per month, according to Mayor Steele, at a total cost of about $23.20. That would go up by $1.16 per month to a cost of $24.36. After the third rate hike in 2014, the average water bill will have increased by about $5.70 per month or about $68.40 for the year.
The hike in sewer rates, according to Special Projects Coordinator Dennis Stranger, is primarily being driven by new and stricter permitting requirements from the state concerning the discharge of sewage into the Bitterroot River. The planned improvements in the plant have a projected cost of about $2.2 million. There is a 2015 deadline for the city to make the required improvements. The rates are scheduled to increase by 8% annually for three years. The base rate for residential sewer would go up from $12.28 to $13.42 in the first year. The cost to the average user would go up from $15.47 per month to $18.28 per month.
Softening the blow of these rate hikes is an overall reduction in the tax levies this year. Last year the city levied about 151.5 mills. But this year’s levy has been reduced to about 123.3 mills. This represents a reduction of over $300,000 in property taxes. A mill is valued at about $11,200.