SANDPOINT — The fate of Sandpoint’s water system will be decided next month when residents vote on a  $20.5 million bond for system upgrades.

The City Council recently finalized a May 26 date for the bond election, which would overhaul the city’s lake water treatment facility.

If approved by voters, the renovation would include the addition of an immersed membrane filtration process to better filter out pathogens from raw water. The plan also calls for a larger transmission pipeline for raw water, as well as rehabilitation of the plant’s chemical and operations buildings.

Public Works Director Kody Van Dyk said the upgrades are a necessary part of ensuring a safe summertime water supply for the system’s roughly 4,000 customers.

“In the summertime, our capacity almost exactly equals our demand, and there are times we cannot meet that demand,” Van Dyk said. “So, for growth purposes we need it and for our existing customer base we need a little bit more.”

Without the upgrades, Van Dyk said the city would be forced to eventually call for mandatory water restrictions during several months of peak usage.

While the bond will be set at a maximum of $20.5 million, the project’s actual cost could end up at approximately $11.5 million, according to Van Dyk. Bids on the upgrade came in under what the city had originally anticipated, and federal stimulus dollars from the U.S. Department of Agriculture’s Rural Development fund could cover 30 percent of total costs. The interest rate is not yet locked in, but Van Dyk said it would be 4.125 percent or less.

“If the bond election is successful, then USDA will offer us a 30-percent grant,” Van Dyk said. “If we don’t pass the bond election and have to go to a judge to get it approved, we are not eligible for the 30 percent grant.”

The bond would be paid down with increased user fees over a 30-year period. Van Dyk has yet to calculate the exact fee increases, but he said it would be less than 30 percent.

“Taxpayers aren’t footing a dime of this,” he said. “It will be paid for by rate payers. Obviously, they’re one in the same if you own property, but it’s about what you use in water. You pay for what you use and it’s not a tax.”

The city will send its most up-to-date information about the bond election inside next month’s utility bills.