City utility rates increase proposed to fund upgrades

The city's Public Works Department is recommending a 7 percent increase for water, 3 percent for sewer and 10 percent for storm drain rates after reviewing its projected costs, needed repairs and major upgrades.

In 2014, the city raised water and storm drain rates 5 percent each and there was no increase for sewer.

In 2013, water rates increased 5 percent and sewer increased 10 percent.

Storm drain rates haven't been increased in about 10 years, according to city staff.

The City Commission will hold a public hearing on the proposal on April 21 and if approved, the increase would take effect May 1. The proposal would raise the average residential utility bill by $3.22 per month.

With the proposed increases, Great Falls still has the lowest water and sewer rates of Montana's seven major cities, city staff said.

For residential water and sewer rates, Bozeman ranks highest with $90.11 monthly.

The combined water and sewer rates for Great Falls with the increase would be $55.74 monthly. The next lowest city is Billings with $64.34 monthly for water and sewer.

The water rate increase is due to $81 million in capital improvements needed over the next five years, in which about $63.5 million, or 78 percent, is attributed to direct and indirect regulatory compliance issues.

The average age of water pipes in Great Falls is 41.5 years, with the oldest dating to 1890, Public Works Director Jim Rearden said during Tuesday's worksession.

The department has been working to replace water mains and has spent $12.6 million since 2008 replacing 16.61 miles of pipe.

The lowest number of water main breaks was 35 in 2009 and since then, breaks have hovered around 40.

"We were hoping the trend would continue down," Rearden said. "We need to stay aggressive."

His department uses a map of water main breaks to prioritize areas most in need of replacement.

The upgrades at the water treatment plant are driving most of the rate increase.

The base project is estimated at $23 million, and the department has identified another $25 million of needed improvements that will be done as funding allows.

The preliminary engineering report for the water treatment plant was completed in February and construction is expected to begin in 2016 and be completed in 2018.

The base project at the plant includes improving employee safety through ammonia feed upgrades, UV disinfection to comply with new regulations, replacing main electrical switchgear, replacing aging infrastructure and improving site security and visitor access.

To fund the upgrades, Rearden said 7 percent water rate increases are expected for the next few years.

Water rate increases also are needed for continued repairs to the city's water towers, Rearden said.

Work on the Ella water tower will be completed this year. Work to level and fortify the foundation is being done now at the Skyline tower. That tower also will be coated and painted this year.

The Gore Hill tower is scheduled for relocation and replacement over the next three years, according to public works documents.

City sewer lines are also aging.

Of the city's 260 miles of sewer lines, 37 are more than 94 years old, 21 are 61 to 94 years old, 125 are 36 to 60 years old and 72 are less than 35 years old. The average age is 51.1 years, Rearden said.

Since 2008, public works has increased sewer main rehabilitation from 20 blocks per year to 40 blocks per year.

The city is wrapping up a multimillion dollar improvement project at the wastewater treatment plant but still has $13 million in improvements needed throughout the city over the next five years.

Of that, $1.3 million will be used to meet state and federal regulations, $3.4 million will be used for sewer line projects and $8.4 million will be used for equipment and upgrades to the system to prevent future violations.

Some of that work is related to development on the east and northern edges of the city.

That development also is driving some cost for storm drains, since the city is doing significant planning to ensure proper storm water management in those areas.

Storm drain rate increases relate to $22.6 million in improvements needed over the next five years.

Water connection fees increases are also recommended, but would not affect monthly water and sewer bills.

The fee is a one-time charge for the initial connection to existing service lines. Current rates are $50 during normal business hours and $75 after hours. Staff proposes increasing those to $75 for normal hours and $100 for after hours.