SANDPOINT — The city is moving toward the design of a new wastewater treatment facility. And, as part of that, launched a rate study on its water and wastewater treatment systems to ensure equitable rates.

The city received a new discharge permit in December 2017 and, since then, has completed modest upgrades to improve level of treatment, said City Administrator Jennifer Stapleton. The new permit requires the city to meet or exceed what is required by the permit.

Design of the project would be the first done by the city, Stapleton said. She said the city is following along with other jurisdictions across the state in adoption of design build because it can be faster and more cost effective in regards to water and wastewater treatment.

The reason a new plant has not been built is partially the expense and because officials want to pay off bonds first, said Stapleton. While a 2017 estimate for a new wastewater treatment plant put the cost at $50 million to $70 million, Stapleton said that with the current rate of inflation that estimate is too low given today’s costs.

In concern for the impact on taxpayers, the city planned to have a rate study take place fiscal year 2021-’22.

At the Oct. 20 council meeting, Angie Sanchez-Virnoche, the vice president of Principal of Financial Consulting Solutions group presented how they would do water and wastewater rate study for the city as a consultant.

Sanchez-Virnoche said that a rate study would enable each utility to remain self-sufficient and self-report, as well as inform financial decisions and their impact on the city. A rate study would allow the city to develop a capital funding plan and evaluate need for external fundunding.

“It is a living and evolving plan to achieve long-term planning objectives,” said Sanchez-Virnoche.

FCS suggests a rate study every three to five years. Sandpoint’s last rate study was 10 years ago.

A rate study will also entail a cost of observation analysis which will provide equitable distribution of the cost to serve different customer groups. It is based upon how each customer group places demand on each utility.

FCS follows methodologies identified in 2015 Idaho Supreme court ruling against Hayden.

During public comment, Sandpoint resident Molly O’Reilly said that 10 years ago when the city tried to expand the sewer district, a former city attorney said the district would become a utility and serve wherever it was wanted. O’Reilly said that past city council said that ratepayers would be paying for the sprawl. She did not know if Idaho law had changed or if the council cared at this point.

O’Reilly said she was part of building a workforce housing development Park cottages and shared what she learned from that experience.

“We paid the same new user fee for studio apartments as we would for three-bedroom, two-bath apartments. It seems to me there may be room for some nuance,” said O’Reilly.

She asked if a 900-square-foot house with one bedroom and one bathroom would cost the same to hook up a 3,000-square-foot house. She asked what would keep a Litehouse facility with all its needed sewer from moving to Kootenai or Ponderay where the taxes are cheaper.

Joel Aispuro asked city staff to answer O’Reilly questions so the public could be informed.

Stapleton said that the city does provide water service outside of Sandpoint’s boundaries, which is not uncommon for a city to do in its area of impact. She said that utilities are a way to bring growth within the city limits and that policy decisions that have not come up to date but that council will speak on moving forward.

City legal council said that they were not aware of any analysis made by a previous council, but would look into it.

Mayor Shelby Rognstad asked if there was a formula for both multi-bath and hook-up fees.

Stapleton said that this would be something that would be looked at during the equity analysis. The analysis would also look at commercial and residential, single family and multi-family homes and how those rates differ.

“Ms. O’Reilly brings up a great point,” Public Works Director Amanda Wilson said. “We hear a lot from our users that we should look at equity and how it is calculated.”

Wilson said the city’s water rates are more straightforward while the sewer rates really get down into the weeds of how many beds are at the location, the type of structure and use. She said that public works had opted to move ahead and take a look in a more equitable manner.