A new sewer rate study for Kalispell calls for a sizable increase in the base rate.

Columbia Falls City Manager Bill Shaw presented his findings to the Kalispell City Council as part of a work session Monday night. 

Kalispell paid Shaw $2,500 for the study — for which a number of council members lauded Shaw.

The study came after several council members complained about a lack of good information from a previous study.

Shaw recommended increasing the bi-monthly base rate, or administrative fee, to $15 from the current $3.75. The administrative fee increase is a way the city can get a handle on its fixed costs, he said.

Shaw presented three scenarios for how the city could deal with the next five years.

He leaned toward one in which growth in the number of sewer customers is static the next two years, followed by a half-percent growth yearly in years three through five. That scenario — which Shaw considered the most likely — would leave sewer volume charges the same at $4.19 per 1,000 gallons of effluent treated.

Last year, city staff recommended a series of incremental increases to pay for a $14 million upgrade of the city sewer plant. City Manager Jane Howington initially recommended a 5 percent increase in the consumption charge and 2.4 percent increase in the administrative fee.

However, several council members objected to the rate increase mainly due to the poor state of the economy.

On Monday, Howington said a $15 administrative fee “allows us to cover the majority of our fixed costs.”

Following its implementation, the city could ask for a small increase in the volume charge next year. An increase in the administrative fee for water customers could follow in two years, she said. Years four and five could see small increases in the volume charges for both water and sewer rates.

“We recognize this is a very, very difficult time to consider something like this,” Howington said.

Council member Duane Larson said the city needs to protect its bond rating.

Council member Bob Hafferman questioned raising the administrative fee by more than 400 percent.

“Due to the demise of the timber industry, we are depending on low-paying service jobs,” he said. The increase would represent “another cross to bear for those individuals trying to eke out an existence.”

Hafferman said Howington “has a huge task” and agreed that “the easy savings have probably been wrung out of the system.”

There was talk about renegotiating the city’s contract to treat sewage from Evergreen, which runs through 2014.

Shaw said a previous engineering report questioned whether Evergreen is paying its fair share, but Howington said it is difficult to figure out just how much Evergreen is paying because it’s based on a complicated formula.

Hafferman questioned why the storm sewer fund isn’t tapped to help pay for the sewer system’s expansion.

Council member Tim Kluesner asked Howington to bring three rate options before the council when it considers the issue again.

Council member Jeff Zauner questioned increasing the rate to $15 “out of the gate” and suggested increasing the administrative fee incrementally over a period of years.

“We need a paradigm shift” in how the city pays for the sewer, council member Randy Kenyon said. He called the proposed change to the administrative fee “a paradigm shift.”

“This is a good plan ... to keep our head above water or our head above the sewer,” council member Jim Atkinson said.

“We’re upside-down and we’re getting deeper in the hole every day,” Larson said. “We should’ve bitten the bullet on smaller increases” in previous years, he added.

Late last year, City Finance Director Amy Robertson said the city last had a sewer rate increase in 2007. That was part of a series of 5-percent rate increases that went into effect from 2003 to 2007. Water rate increases of 10 percent per year were also included in that series.

Robertson has said the city’s sewer fund will be $144,661 in the hole in operating cash by the end of June. In subsequent years from 2012 to 2015, the sewer fund would end each fiscal year with negative cash balances of $640,763, $1.22 million, $1.84 million and $2.46 million.

Howington said she will ask the council to set a date for a public hearing during Tuesday’s council meeting. That meeting date would be March 21, she said. Any rate or fee increases could be brought to council on April 4.

“Right now we have no capital improvement funds [for the city sewer],” she said. “We have a problem with the lid at the wastewater treatment plant.”

If something happens, the city would have to figure out how to pay for it, she said.

On a separate issue, Howington said she would be proposing a 25-cent increase in the solid waste fee next year. “We tried to present it a couple years ago,” she said. “Our trucks are breaking down faster. We’re fabricating parts, etc.”

She also mentioned the possibility of creation of a special improvement district for the city street maintenance fund.

Reporter Caleb Soptelean may be reached at 758-4483 or by e-mail at csoptelean@dailyinterlake.com.