The usage-based water rates that will replace flat rates in Basin on June 1 will mean unchanged monthly bills for residential customers and reduced bills for business customers -- so long as their usage does not exceed 10,000 gallons a month.
Beyond that amount, an additional variable rate will apply.
The new rates will allow the district to issue approximately $196,000 in bonds, payable over 20 years at 2.5%, to pay for a host of system improvements, including installing water meters, returning a pump house to service and replacing curb stops.
Currently, residential water users pay a flat rate of $48 a month and businesses $68.80. Under the new rate structure, unanimously approved by the Basin County Water and Sewer District on April 7, both residential and business users will pay $48 a month for up to 10,000 gallons.
Beyond that, the rate becomes variable. For 10,001 to 15,000 gallons, the rate will be an additional $4.50 per 1,000 gallons; for 15,001 to 20,000, it will be an additional $5.50 per 1,000 gallons; usage above 20,000 gallons will cost an additional $6.50 for every 1,000 gallons.
In addition, owners of unoccupied properties -- those properties in the district that have not had any water service for at least 12 consecutive months -- will be charged $12 a month despite not having used any water.
That rate reflects those property owners’ benefit “of having continued access to the water system that their neighbors are maintaining and the benefit of being able to hook up in the future,” Nathan Bilyeu, the bond attorney working on the project with the district, explained during a public hearing held before the board’s vote.
Bilyeu also noted that undeveloped properties -- unused lots with no water connections -- will fall under the same payment category as unoccupied properties. In both cases, the district is obligated by state statute “to assess some rate so [property owners] also are contributing to the benefit that they are receiving to have a central water system to be connected to,” he explained.
Though it is “not uncommon” for a water district to assess such properties a full base rate, “your board has elected to reduce that rate for these lots to that $12 rate in order to reflect that while there is some present benefit, they don't have the same present benefit as properties that have a house or a business built on property,” Bilyeu said.
Though the new rates go into effect June 1, the variable part of the rate -- monthly usage beyond 10,000 gallons -- will not be assessed until after all water meters are installed, likely in the late summer or fall.
Nissa Manley, the district’s operator and clerk, said that as water meters are installed she will indicate monthly usage on customers’ bills but not charge for use in excess of 10,000 gallons until all are installed so that people can assess their usage and “make adjustments” as needed. Even though the new usage rates will be in place a few months before the water meters needed to support them, Bilyeau said at the hearing that establishing sufficient rates was required by the Montana Department of Natural Resources and Conservation, the agency whose grants and loan are supporting the project.
“It’s required that you put new rates into effect before the loan is closed and construction starts so the contactor and lending agency can be assured they can be paid back,” he said.
Curb stops -- the valves used to turn on and off water service to each customer -- will be replaced when the water meters are installed. Manley has said that about 85% of Basin’s curb stops “are either failed or failing” and leaking as a result.
The district is also eager to bring back online a dormant pump house, which Manley previously told The Monitor “is important for several reasons.”
Because the old pump draws from an aquifer with a neutral pH balance versus the current “slightly acidic” water source, putting it back in service “should enable us to use less chemicals while still protecting pipes,” she said in an email.
“The acidic water is the main reason why we have developed issues with copper in our water that we have to treat for,” she wrote, while having access to two pump houses would also allow for redundancy so that “when we have an issue with one, the other can take over.”
Because all water meters likely won’t be installed until late summer at the earliest, the board assumed summer water restrictions would be put in place this year but was “not sure about the future.”
Those restrictions have been instituted because of high water usage during the summer. During the public hearing, Manley said that the district uses about 360,000 gallons of water a day in the summer when “our town size should never exceed 90,000.”
When a resident asked whether water system leaks might account for the excessive usage, Manley said that water usage in the winter “is what we're supposed to use,” indicating that there are fewer leaks in the system than in the past.
“In the summer months our water usage is still really high and we have to do something to protect our well pumps and system in general, [for] when wells run 24/7 we’re tearing them apart,” she said.
Sewer rates will remain unchanged at $12 a month when the new water rates go into effect.