City puts off sewer increase vote until February
The Kalispell City Council on Monday put off until February a decision on a proposed 5-percent sewer rate increase.
A majority of the council wants more information from city staff before agreeing to the increase.
City Manager Jane Howington and city staffers attempted Monday to answer some of the council members’ questions from previous meetings.
Councilman Bob Hafferman led the charge against the increase, saying his repeated questions have not resulted in answers.
The information city staff provided “doesn’t follow the same format as the budget book. I can’t compare item for item to see where the shortfalls are occurring,” he said.
The city is trying to pay off an upgrade of the city sewer system that was completed last year.
“We may need a rate increase. We may have to go to the voters for a bond issue. I will vote no because I have no idea where the city stands today on meeting its financial obligations over the next five years,” he said, noting the city owes $13 million for the wastewater treatment plant.
“We have a serious financial problem for the years to come,” council member Tim Kluesner said. “We’re facing fiscal insolvency in this whole [sewer] fund. I don’t feel comfortable approving this temporary solution when there needs to be a long-term solution.”
Council member Jim Atkinson asked Howington for a summary of where the city sewer stands over the next five years.
“I can’t give you a number,” Howington said, adding that the city is “cutting and renegotiating” contracts with Glacier Gold and Flathead County Solid Waste for sewage sludge disposal. “Multiyear rate increases will have to be a factor in the discussions,” she said.
A handout from Finance Director Amy Robertson factors in the 5-percent rate increase beginning next year and makes projections five years out.
By the end of June 2011, the city would be $144,661 in the hole in the sewer fund’s operating cash. It would have to pull that dollar amount from other funds to make things even out.
It only gets worse from there. In subsequent years from 2012 to 2015, the sewer fund would end each fiscal year with negative cash balances of $640,763, $1.22 million, $1.84 million and $2.46 million.
Revenue in the sewer fund is expected to be down $150,000 from last year. A 5-percent increase, which staff recommended to begin Jan. 1, would cut that to $85,000.
Atkinson said the impact of the proposed 5-percent rate increase for a typical family is only $12 a year.
Council member Jeff Zauner agreed that the impact “is not that great” but said there “are too many unanswered questions.”
The vote was 6-2 to table the rate increase, with Atkinson and Randy Kenyon dissenting. Kari Gabriel was absent.
Howington recommended a work-study session on the issue in February.
“We probably will never be able to answer every question to your satisfaction” due to laws related to how the city governs its finances, she said.
Howington said the issue is not mismanagement but the economic downturn. “The growth is not there. Because of foreclosures, our use is way down.”
The city last had a sewer rate increase in 2007, Robertson said. That was part of a series of 5-percent rate increases that went into effect from 2003 to 2007. Water rate increases of 10 percent per year also were included in that series.
Reporter Caleb Soptelean may be reached at 758-4483 or by e-mail at csoptelean@dailyinterlake.com.