With much of its excess capacity committed to future development projects, the Lakeside County Water and Sewer District board of directors voted last week to place a temporary moratorium on the annexation of new properties into the district for sewer hookups.  

The moratorium only applies to out-of-district properties seeking to join the district, not to properties within the district that have not yet hooked up to the district's water and sewer services, General Manager Rodney Olson clarified.  

"We want to protect the capacity we do have for our in-district people," Olson said.  

The board still reserves discretion to annex properties into the district on a case-by-case basis, in scenarios like a leaking septic near the lake, but any property owner wishing to be annexed into the district would submit an application that would then be considered and voted on by the directors.  

The moratorium comes as the district navigates several changes looming on the horizon: it is in the midst of expanding its wastewater treatment facility to meet increased demand within the district and has at the same time committed to serve the proposed Territory 1889 subdivision south of Lakeside, which will bring more than 350 homes under the district's purview.  

With its current facility, the Lakeside County Water and Sewer District has capacity for 316,500 gallons per day. A new facility that is under construction and expected to be operational in 2029, would increase the district's capacity to as much as 900,000 gallons per day, according to the district's treatment facility plan. 

Until the new facility is brought online, much of the district's excess capacity is committed to projects that will hook up to sewer services in the next three years. Between current ratepayers and committed future services, the district realized that it is approaching the limits of its present capacity.  

The current facility has capacity to serve 39 additional single homes, according to information presented to the board of directors Oct. 20. In March 2025, the Montana Department of Environmental Quality determined that the district had a surplus of 87,703 gallons per day. Of that remaining capacity, 34,500 gallons have been set aside for the first and second development phases of Territory 1889.  

Taking into account other developments and projects that have already been given will-serve letters and in-district hookups, that number dwindles to a remaining surplus just shy of 9,000 gallons per day.  

A 2025 Montana law, House Bill 534, allows eligible water and sewer districts to connect to wastewater systems beyond rated capacity provided there is an accompanying approved development plan. While Lakeside's scenario would seem to fall under these parameters, the board chose not to pursue this option due to questions about how the relatively new law would be implemented. 

Director Marc Liechti expressed concerns that a moratorium could dissuade developers from hooking up to the district, and that they might just build their own septic systems in the meantime.  

"Are we concerned?" he asked during board discussion. "We have some other projects that may come along, and I'm a little worried with some of the developers because if they're being told, 'Sorry, we don't have capacity,' sometimes they say, 'Well where can we build the septic?'" 

The expansion project, which is being constructed in two phases, has been challenged in court by local groups, including the Flathead Lakers and Citizens for a Better Flathead, along with the Confederated Salish and Kootenai Tribes.

The first phase of the project centered on a permit to discharge treated wastewater into groundwater, as well as approval for a facility to receive and treat septage from around Flathead County. The second phase of the project includes construction of the wastewater treatment facility and rapid infiltration basins. Both phases of the project were cleared by the Department of Environmental Quality, but local groups have continued to challenge those findings.  

Most recently, Flathead County District Court in August ruled in favor of the district, upholding the Department of Environmental Quality's decision to issue the groundwater discharge permit. Citizens has appealed this decision to the Montana Supreme Court. Also in August, Citizens, along with the tribes and Flathead Lakers, filed a new lawsuit against the Department of Environmental Quality regarding the second phase of the project.  

At the Oct. 20 meeting, directors also passed an ordinance to institute a two-reading requirement for all ordinances considered by the board. Going forward, all ordinances must be read and adopted by the majority of board members at two separate meetings to be finally adopted. Directors Liechti and Kathy Martin voted against the ordinance, which only required a single reading since its adoption preceded the two-reading requirement. The annexation moratorium, which appeared earlier on the agenda, was also exempt.  

The procedural change comes after a disagreement earlier this year between the board and Citizens for a Better Flathead over its passage of the ordinance to annex Territory 1889 into the district. Citizens argued that under Montana Code Annotated, "an ordinance must be read and adopted by a majority vote of members present at two meetings of the governing body.” Since the board only read the ordinance once, Citizens believed the board was in violation of procedural rules, and the ordinance was not valid.  

However, the provision in Montana Code Annotated applies only to local governments like city and county governments, not special-purpose districts like county water or sewer districts, according to the Montana State Law Library. But in response to the conflict over previous ordinances, the board elected to incorporate the two-reading requirement into its bylaws.  

"I still am under the opinion that water and sewer districts are not required to have two readings for ordinances, but it's recommended good practice to do so," Olson said. "Because it's open to interpretation, I'm recommending, and our attorney recommends, that we do it going forward for any and all ordinances." 

Reporter Elsa Ericksen can be reached at 406-758-4459 or [email protected]. If you value local journalism, pledge your support at dailyinterlake.com/support.