The Coeur d'Alene Water Department is proposing higher rates and fees to keep up with projected costs.

"As infrastructure and operational costs continue to rise, the current funding model is not sustainable," a city report said. "The system cannot continue to sustain itself or expand without either significant upgrades to infrastructure or major changes in customer usage behavior, particularly in reducing inefficient irrigation."

The City Council will consider the issue during its 6 p.m. Tuesday meeting in the Coeur d'Alene Public Library Community Room. A public hearing increase could be scheduled July 15, with an effective date for the new rates Aug. 1. 

Administration and Water Department staff have for years discussed rising concerns about increasing water usage, particularly related to irrigation use and green spaces. 

Come summer, the city will pump about 40 million gallons of water a day from its 11 wells, with most of that going into lawns. It is estimated much of that water is wasted due to inefficient design, mismatched sprinkler heads, system leaks and evaporation from daytime watering 

"Prior rate studies implemented stepped rate structures to curb irrigation use and promote more efficient practices, but those measures have not effectively reduced consumption," the report said.

While the city can pump close to 50 million gallons a day to meet daily demand, peak hourly irrigation loads in the early morning exceed the system’s instantaneous pumping capacity, drawing heavily on its 8-million-gallon storage capacity.

"With continued growth, we are required to install new infrastructure and upgrade distribution systems to meet current and future demand," the report said.

Historically, the Water Department has managed capital improvements without taking on debt. However, the significant rise in construction costs over the last several years has outpaced its capitalization fees, requiring a re-evaluation of its funding model for upcoming projects, according to the report.

A new well costs about $2.5 to $3.5 million and takes three to five years to bring online. Drinking water storage ranges between $5 to $9 per gallon, meaning a 1-million gallon tank may cost $5 to $9 million

"A loan for a $6.7 million drinking water tank is likely unavoidable," the report said.

Under one proposal, higher capitalization fees would be phased in over three years. A 1-inch water meter that currently costs $5,593 would nearly triple to $16,404 by 2028. A 10-inch meter that costs $256,727 today would be $753,092 by 2028.

The Water Department is proposing a water rate increase annually, April 1, for the next five years. 

The report said this would provide stable revenue for both operations and capital projects, offset the need for deeper cuts or deferred infrastructure investments and allow it to maintain service reliability while supporting growth.  

The current single-family rate is $1.12 per 1,000 gallons up to 30,000 gallons. It increases to $1.61 per 1,000 gallons from 31,000 to 50,000 gallons and $2.19 after 51,000 gallons.

According to a residential rate survey, a Coeur d'Alene home pays an average water bill of $23.77. In comparison, Moscow pays $99.62; Lewiston, $96.58; Post Falls, $30.85 and Spokane, $29.85.

"The most pressing issue is that current water rates are not sufficient to cover long-term infrastructure replacement costs," the report said.