Water & Sewer district may delay sewer rate increases.

Originally published in the 5/26/17 print edition of Yellowstone County News. – By Evelyn Pyburn.

LOCKWOOD — Lockwood water and sewer customers in Phase 2 of the sewer district will probably get a one or two year reprieve in the system development fee (SDF) increase that is being proposed by the Lockwood Water and Sewer District (LWSD) board. Following a public hearing on the proposed rates and SDF increases, members of the board decided to wait until their next meeting on June 14, to further discuss a possible amendment that emerged from the public comments Tuesday evening.

It was primarily the system development fee increases about which most of the 40 some people who attended the hearing seemed most concerned. It was pointed out that property owners in Phase 2 have had very little time to connect to the sewer and it seemed unfair to already increase the cost that is associated with doing so. SDFs are charged when a new property connects to the system.

It was also pointed out that it would perhaps be a detriment to the district to do something that would discourage and delay hookups, since having as many hook ups as soon as possible, is important to the financial success of Phase 2.

Over the past year, Raftelis Financial Consultants has been conducting a rate study for LWSD. Andrew Rheem of Raftelis presented the results of the rate study during the hearing.

Phase 2 was only completed last fall and it was only late last fall that people could begin to connect to the system, it was pointed out. There was little that homeowners could do during an especially hard winter, and there has been little time to act this spring. And, now they have but a couple of weeks before the proposed SDF fee increase would go into effect. The LWSD board intends to put the rate increases in effect on July 1.

Also impacting the rate at which people are able to hook up is the lack of contractors available to install systems. Homeowners reported being told when they called contractors that they should call someone else, or that there are long waits before the contractors can get to their installation.

The proposed SDF fee increase for Phase 2 is about $200 (for the most common users who are those with a ¾ inch water meter). The current SDF is $190 for Lockwood, which is proposed to go to $385 on July 1. That is, however, only the Lockwood district’s portion of the fee; the City of Billings charges its own SDF to new connections for the treatment of sewage. While LWSD collects that fee to be passed on to the city, the district has no control over what it is. Billings has been charging a SDF of $905, and since Billings, too, is going through a rate study, they are proposing to increase that rate to $920.

Suggestions were made to delay the implementation of Phase 2 SDF fees by one year and for two years.

“That sounds reasonable,” said Nancy Belk, a member of the LWSD board. The idea seemed to be well received by other board members.

One homeowner asked if they could pay the current SDF before rate increases go into effect and whether that would be applicable to whenever they decided to install their sewer.

LWSD Manager Mike Ariztia answered, “Yes.” And, right now, the board has no policy regarding any time limit. Ariztia said that that does not mean, however, that some future board might not act to impose a time limit, which would then be applicable going forward from that time.

It was emphasized that SDF fees are a one -time fee that is paid only as a new property comes on line. People already connected to the system – water or sewer – do not have to pay the fee. New connections are required to pay the SDFs in order to contribute to the capital costs of building the system, costs which existing customers have already paid in assessments over time.

For Phase 1 of the sewer the new SDF (for ¾ inch water meters) will increase to $726.

Water SDF (for 3/4 inch water meter) will increase from $1,225 to $2,418 as of July 1 system-wide, while the SDF for the Mid-zone area will increase from $4,236 to $4,677. Over time, the goal is to have only one water SDF for the whole district. That is projected to happen on July 1, 2020 when the single SDF will be $6,000.

Proposed rate increases for Lockwood water and sewer mean a typical residential user (3/4-inch water meter using 6,000 gallons of water per month, with 5,000 gallons of sewer volume per month) would see an increase in their water bill from $37.20 to $38.62, and in their sewer bill from $51.80 to $52.85, beginning July 1.

Average bills for commercial customers (using 20,000 gallons monthly) will go from $100.85 to $105.26 for water and from $104.88 for sewer to $109.08.

There were comments in opposition to the rate increases. One resident pointed out that over the next four years the rates increase a total of 80 percent, such as for the current monthly rate for sewer from $1.10 per 1000 gallons to $1.96 which is proposed to be charged in 2020.

The current base rate for sewer remains, however, the same — $46.30 — throughout the four year period, which was pointed out to another resident objecting to the sewer increase.

Attendees were interested in how the volume rates for sewer are calculated. The sewer volume rates are based on the volume of water used, but to take into account summer irrigation water use, the summer sewer rate is calculated on an average of winter months’ water usage.

Complete information regarding the proposed rate increases is available at the LWSD office and the slide presentation that was given will be posted on the district’s website.

The next meeting of the board will be at the district office on Wednesday, June 14, 7 pm.

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