A new dam in the design and permitting phase and a water-main repair effort are two projects with a combined cost of more than $12.2 million that could translate into a  rate increase, but that won’t happen this year.

Before Tuesday night’s Libby City Council meeting, Mayor Doug Roll made it clear there would be no rate increase, at least not this year.

“We do not need to raise rates,” Roll said. “We have enough that we will not need to raise rates.” 

Roll explained all rate customers were figured in the same way, as residential customers. However, Roll said county water customers, businesses and customers with larger water lines pay more. Those added costs were not calculated until recently into the rate structure.

“Basically, there’s enough revenue to avoid an increase,” Roll said.

The city water and sewer funds are also healthy, but Roll indicated leaders do not want to tap those.

According to the preliminary budget for 2013-14, the city lists $629,414 in reserves for the Water Fund and $287,044 in the Sewer Fund.

Roll said Montana Rural Water Specialist John Weikel reviewed the city’s rate system and determined there was sufficient funding at least for the water-distribution improvements.

Messages left for Weikel at his Columbia Falls office for comment were not returned.

While a water-rate increase is not imminent, Libby City Councilman Allen Olsen said he expects rate increases next year, something he does not advocate.

“I do see them going up next year and probably the year after that,” Olsen said. “We now know it’s recommended we may need a retention dam as part of this project. It’s like there’s more costs coming all the time.”

Still, for the immediate future, Councilwoman Robin Benson, the council’s Water Committee chairwoman, said city leaders would also hold the line on sewer rates.

“There will be no water-related increases this year,” Benson said. “This is good news that we won’t have to raise rates to repair the water-distribution system.”

Libby city water customers pay $33 for the first 3,000 gallons each month. For each 1,000 gallons consumed beyond that, residents pay $2.96.

County water customers pay $41.28 for their first 3,000 gallons with the similar $2.96 adages beyond that initial 3,000-gallon consumption.

Concerns about water rates have come to light as the city has taken on more than a $4 million water-distribution project.

Noble Excavating, which was awarded the contract May 20, is doing work on the $4.02 million project.

A water-main analysis more than a year ago established a need for the repairs. The study indicated the city was losing more than half of its treated water through a series of leaks. This project addresses not all but the most serious of those leaks, many of which already have been repaired, City Administrator Jim Hammons has said.

Water rates were increased April 2, 2012.