Cost of water, sewer project in C.Falls jumps

A rebuild of Fourth Avenue West and a pair of adjacent sewer and water projects are going back to the financial drawing board in Columbia Falls.

Labor, machinery and profit margin increases seem to be the most likely culprits for current cost projections spiraling beyond estimates from a year ago, City Manager Bill Shaw told the City Council on Monday night.

As a result, the city may have to kick in considerably more money on three projects, primarily to hold back residents' costs on the two sewer and water projects.

As the council worked to find a way to soften the blow while still upgrading the system, it became clear that the decision won't be black-and-white.

A move to help low-income residents in that neighborhood could set a precedent in the minds of future developers, committing the city to a larger share of water and sewer costs than it can afford.

"At what point are you contributing too much?" Shaw said as he paraphrased the council's dilemma.

On the projects at hand, the $480,000 street rebuild for Fourth Avenue, including sewer and water upgrades, has a new projected price tag close to $750,000.

Special Improvement District 34, which residents approved last year to install sewer lines in the alley between Fourth and Fifth avenues west and water service to lots on Fifth Avenue, could cost property owners anywhere from $13 to $35 a month more for the next 20 years.

SID 36, approved last year to extend a water main on Fourth Avenue from 16th Street to Talbott Road, could increase to $4,430 per lot for the eight lots affected. That's up more than 36 percent from last year's estimate of $3,250.

In both of the SIDs, Shaw is proposing that the city cover all engineering fees, which already have been paid, instead of asking residents to share that cost.

It means the city would kick in a larger percentage than planned initially.

Of the $165,000 total project cost for SID 34, residents would be asked to pay under $99,300 and the city would cover nearly $65,700 - about a 60-40 percentage split.

In SID 36, the split would be the same but the 60-percent burden would fall to the city. Of the $88,000 total cost, residents would pay a little over $35,400 and the city just under $52,600.

With these projections, if the property owners say the new costs are too stiff and thereby defeat the amended SIDs, the budget would revert to last year's approved costs.

"Would the city have to eat the balance if we leave it as is?" council member Tad Rosenberry asked Shaw.

It would, Shaw answered. In effect, that could scuttle the water and sewer projects entirely.

The city is seeking ways to subsidize costs, including a state water quality loan for the city and a Community Development Block Grant targeting the residents in the neighborhood. To prove financial need, a means test would be devised and residents would need to provide information that would help bring in the grant.

"I think we need to apply for that grant, regardless," Shaw said, noting the uncertain outcome of SID 34 involving 17 homes that would receive water or sewer, or both. "We'd dedicate it to those houses."

Mayor Susan Nicosia agreed, but speculated on getting advance feedback from the homeowners on whether they would participate if the city proceeds with the grant application.

"If the 17 say no," Nicosia said, "there's no project to apply for a grant on."

Even if they did, it probably wouldn't mean the end of improvements in the area.

"I still think we can do Fourth Avenue," Shaw said, "even if we cut off SID 34 and 36."

Shaw recommended mailing a letter to each property owner involved in the two special improvement districts, explaining the cost increases and asking them to consider answering questions on a financial means survey.

After lengthy discussion, the council voted 4-2 to proceed with sending the letters and issuing notice of intent to create the amended districts. Nicosia and council member Jolie Fish dissented on both SID 34 and SID 36.

Action on the special improvement districts likely will be scheduled for the council's Feb. 7 meeting.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com