City struggling to pay for sewer plant

The city of Kalispell is struggling over how to pay for $13.5 million in sewer-plant improvements.

City Public Works Director Jim Hansz has requested a 5-percent rate increase to help pay for sewer-plant expansion that was done to accommodate growth that didn’t materialize. Long term, he suggested the city implement a series of rate increases over a period of years.

Contract work on the sewer-plant expansion was begun in 2006 and the city paid top dollar. Then the bottom fell out of the economy and growth slowed dramatically.

The Kalispell treatment plant currently is operating at less than half of capacity.

At a special meeting Monday, several City Council members objected to the rate increase at least until they get more information from city staff.

Bob Hafferman and Tim Kluesner voiced support for talking to the unincorporated Evergreen area east of the city in an attempt to get more customers, and Mayor Tammi Fisher agreed that the city sewer needs more customers.

“We need customers to pay the bills,” Hafferman said. He noted the Evergreen Water and Sewer District offered to pay for part of the sewer plant upgrade in exchange for an additional allotment, which would allow Evergreen to take in more customers from the area north of its present boundaries. Kalispell treats effluent from the Evergreen Water and Sewer District.

“This recession may last a long time,” Hafferman said. “Business as usual is not an option. We need to know how we are going to pay off these bonds. I haven’t heard a thing tonight that tells me that.”

City Finance Director Amy Robertson said the city owes $13,486,000 on its 20-year bonds at a fixed interest rate of 3.75 percent.

Kluesner suggested the city renegotiate the terms of its debt to get a lower interest rate.

Hansz presented a comparison of Kalispell’s sewer rates with other cities for 4,500 gallons of treated effluent per month. Kalispell residents pay $20.73 per month, he said.

That’s on the low end of comparable cities, he said: Helena, $15.60; Great Falls, $16.53; Coeur d’Alene, Idaho, $24.43; Post Falls, Idaho, $28.09; Bigfork, $28.30; Bozeman, $29.37; Hamilton, $33.47; Columbia Falls, $38.35; and Whitefish, $39.03.

Also discussed was whether the city should continue paying Glacier Gold in Olney to take its sludge, which it uses to make compost. The city pays Glacier Gold approximately $100,000 a year, City Manager Jane Howington said.

The city is considering reducing the amount of sludge it takes to Glacier Gold. It could take some of the sludge to the county landfill, but that would require paying to have it tested. Howington is supposed to meet with Glacier Gold representatives in the near future to see if they can negotiate a new agreement.

Hansz said the city should have more than one option for what to do with its sludge. He noted that Coeur d’Alene trucks its sludge to Missoula.

Hansz said he has visited the Glacier Gold site. “I don’t get the impression they’re rolling in it [money],” he said. “It’s not a high-gross-margin industry.”

More into the future, the city could contract with Stoltze Land & Lumber Co.’s algae plant, which is currently undergoing more study to see if it can be commercially viable.

Kalispell’s sewer plant treats 2.6 million gallons of effluent a day and has the capacity top treat 5.4 million gallons.

Speaking of the growth rates the city experienced from 2000 to 2006, Kluesner said, “We will not see those growth rates for 30 or 40 years.

“We may vote yes on this [rate increase],” Kluesner said. “But we still need to justify to the public why this is needed. We are upside down. We are in the red. We made a mistake. We need to admit it, correct it and pay for it.”

Council member Jim Atkinson disagreed. “In the Bible, if a prophet did not prophesy correctly, he was stoned. I don’t know that you want to prophesy, Tim,” he said.

“We did not make a mistake. We do not need to apologize for anything. The economy did what it did,” Atkinson said. “Giving your sewage treatment plant away [to Evergreen] is not a good way to get new customers. Maybe we need to debate that.”

Fisher said she wants to see the contract with Glacier Gold redone and look at refinancing the debt. “Even if I vote for a rate increase, I don’t know that I’ll do it again in my term,” she said. “It’s kind of a one-shot wonder.”

Howington said city staff will gather information based on council members’ requests and have another meeting on the topic.

“Adding more customers ... it’s not a magic answer,” she said.

Reporter Caleb Soptelean may be reached at 758-4483 or by e-mail at csoptelean@dailyinterlake.com.