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County Commissioners set to consider bulk water rate increase during Oct. 27 meeting

Jenn Rowell

Cascade County commissioners are scheduled to consider increasing the bulk water at their three public water distribution stations during their Oct. 27 meeting.

Commissioners tabled the decision from their Oct. 13 meeting due to incorrect information about the public hearing initially posted at water stations, typos in the agenda report and a lack of clarity on financial numbers.

The water rate was last changed in 2017 and is currently 25 cents per 75 gallons.

County Commission considering bulk water rate increase during Oct. 13 meeting

County Public Works is proposing to increase the rate to 25 cents per 25 gallons, or a penny per gallon, effective Jan. 1, 2027 to cover the cost of water purchased from the city and annual electricity costs, plus provide funding for future repairs and improvements.

After the Oct. 7 commission work session, public works added a second option for an increase and since the Oct. 13 meeting, a third option was added for consideration.

The three options commissioners are scheduled to consider during their Oct. 27 meeting are to increase the current water rate of $0.0033 to:

Commissioners discussed the proposal during a June 26 meeting with public works and finance staff.

The Electric first reported on the proposed increase of a penny per gallon on July 1.

Cascade County officials proposing rate increase for bulk water at filling stations

During the Oct. 13 meeting, Commissioner Joe Briggs said the agenda report included incorrect numbers, which caused a “substantive difference.”

Les Payne, county public works director, said during that meeting that going to the penny per gallon rate on Jan. 1 left the program with an operating deficit of almost $9,000.

He said he and his staff had considered an automated payment system trial for 2027 but with that deficit, they weren’t certain they’d go through with it.

Briggs said that the penny per gallon rate would generate about $50,000 of additional revenue and the $0.0066 rate would generate about $16,000 in additional revenue, but either option left the program with a net loss and no funding for maintenance.

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Payne said they’d talked about the penny per gallon rate to start building a reserve for maintenance needs.

“Currently, right not, we can’t replace nothing,” Payne said of the budget without a rate increase.

Briggs said that with the smaller increase presented as an option at the Oct. 13 meeting, the program wouldn’t have funds for maintenance.

“The math doesn’t work,” Briggs said.

After closing the Oct. 13 public hearing, Briggs said that looking at the budget, with the $0.0066 option, “we’re not fixing anything,” but the penny per gallon might be overkill.

Hinebauch said with the $0.066 option, it would take two years to get out of the red and three years to build reserve for repairs or improvements.

Trista Besich, county finance director, said the program was currently using cash reserves to balance last year’s actual shortfall and this year’s projected shortfall, which doesn’t account for the proposed 5 percent water rate increase coming from the city or maintenance.

Briggs said he and the public works director had an “honest disagreement about this,” in that the Payne wanted to set a rate that would carry the county for 10 years.

“I think that’s foolish,” Briggs said, and the county should be adjusting the bulk water rate every few years to keep up with rising costs from the city and NorthWestern Energy, which the county has no control over.

Several speakers said during the Oct. 13 public hearing that they understood the county needs to cover its costs, but wanted more information about needed repairs and maintenance.

Jess Bendel, an area farmer, said he hauls a large tank that takes 72 quarters to fill at a county water station.

The rate increase would be inconvenient, he said, to have 150 or 200 quarters, so he supported some sort of cashless system other than credit cards to avoid those transaction fees.

Bandel said he agreed the county couldn’t operate in a deficit, but doubling or tripling the rate, “hasn’t been justified yet” since the county hadn’t clearly laid out what’s needed.

Payne said he didn’t have a maintenance plan yet because the work couldn’t be done until the program had increased revenue. He said once he knew how much money the program had, he could start budgeting for maintenance.

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“The “whole purpose of this was to get us out of the hole,” Payne said during the Oct. 13 meeting.

Documents in the Oct. 27 agenda packet include estimated maintenance and proposed improvements:

Staff said during the June meeting that the program was operating at a deficit because the rate didn’t cover rising operational costs and the need for future capital improvements.

During the June meeting, county officials provided the following numbers :

According to financial data provided as part of the agenda packet for the Oct. 27 meeting, county expenses were for fiscal years:

The updated financial documents included in the agenda packet for the Oct. 27 meeting, some of which were added to the agenda packet after 5 p.m. Oct. 12 for the initial meeting, reflect the following revenues and expenses:

The county’s adopted fiscal year 2027 budget, which runs from July 1, 2026 to June 30, 2027 includes projected revenue of $142,500 and expenses of $151,447 for a deficit of $8,947, factoring in the increase to a penny per gallon on Jan. 1.

The existing water stations need ongoing repairs and planned capital improvements, including roof repair and/or replacement, structural repairs and general site maintenance, according to county staff.

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“At the current rate structure, there is no dedicated funding mechanism sufficient to support these long-term facility needs,” staff wrote in their proposed rate adjustment.

In a document included in the packet for the Oct. 13 meeting, county staff wrote that for fiscal year 2026, which ended June 30, 2026, the county’s water stations dispensed about 26.5 million gallons of water, collecting $88,318, compared to $100,660 in operating expenses.

According to the county’s financial documents in the packet, the revenue was $92,912,52.

The Electric requested the water billing statements that the city sent to the county from 2016 through the current month and those reflect that the city billed the county $106,772.71 for water and fire hydrant fees at the three water filling stations.

The county’s finance documents indicate the expenses for the fiscal year that ended June 30 were $126,579.49, which included $3,206 for electricity and $16,566.14 for maintenance and repairs.

The county is proposing the increase for bulk water to “better support the costs of providing this service, including the cost of water, operations, maintenance, repairs, and the long-term upkeep and replacement of the infrastructure needed to keep the water stations safe, reliable, and available to the public,” according to county documents included in the agenda packet for the Oct. 13 meeting. “The proposed rate adjustment is not intended to generate a profit or create an additional
source of general county funding. The intent is to move the bulk water service toward a more sustainable operating model in which those who use the service contribute more appropriately toward the costs of providing this service.”

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During the Oct. 7 work session, Les Payne, county public works director, said that the rates would be effective Jan. 1 to “give consumers plenty of time to see this coming.”

County officials posted notice of a public hearing on the proposed rate increase at the three water stations for Oct. 27, but the meeting was on Oct. 13.

County staff said they corrected the signs on Oct. 11 and that the correct hearing date had been posted online and in the newspaper.

A county staff presentation of the proposed increase was added to the county website for the meeting after 5 p.m. on Oct. 12, as were additional financial documents.

Payne said some community members were upset that private water delivery companies or other commercial users were filling up at county water stations, but the water stations are available to anyone willing to pay for water and the county can’t control who’s using the water, nor does the county control the water supply.

“It’s not our water that we’re providing,” and the county is a pass-through entity.

The city owns the water towers and controls the water supply, which Payne said the city could shut off at any time and with little notice.

Calob Marquis, the city’s water infrastructure division manager, told The Electric in mid-October that the city has the capacity for the fill stations.

“The two biggest factors would be future development (capacity of our system) or environmental regulations that would dictate a change with the fill stations. If that were to happen, we would need to come together with city/county forces to figure out solutions,” Marquis said.

He told the Electric that as the city’s water portfolio manager, it was his opinion that “we wouldn’t just drop the stations with no warning or input from the commission (city and county) and community (city and county) to try to figure out a solution that works for both. We aren’t interested in just cutting water off to these stations for inconvenience. We realize the issues with wells in the surrounding area and will work within our means, rules, and regulations to continue to provide water to the county stations.”

Payne said that the county is charging citizens less for bulk water than what it’s paying the city for the water.

He said the cost of water doesn’t include electricity, maintenance, staffing, parking lots and other associated costs.

Payne said the filling stations are vandalized and damaged by vehicle collisions.

During the Oct. 7 work session, Commissioner Joe Briggs said he’d like to see the historical water usage at the county’s water stations.

He said he expected that, since many houses are being constructed in the county with cisterns.

Briggs also asked staff to try to track back how much the city has charged the county for bulk water as far back as possible.

Payne said his deputy had done a lot of research and spoke with officials in about 10 other counties and some private entities about bulk water rates and programs.

According to the public works slides, the county’s water usage and city charges were:

County public works slides showed bulk water rates for other Montana counties:

Briggs said the city chose to exit the bulk water business and the county took it over since so many residents have cisterns.

In 1995, the city and county signed an agreement allowing the county “the discretionary authority to provide reasonable and affordable bulk water supply and distribution to county residents, based upon the standard commercial water utility rate that the city otherwise regularly charges to private and public consumers. As a means to effect this purpose, it is the intent of the city and county to enter into a contract for the sale and transfer to the county of the physical facilities and equipment that presently constitute three existing City water dispensing stations.

The term of the agreement was 15 years, through 2010 and included the city’s agreement to provide bulk water at the same rates as those charged to regular commercial customers of city utilities.

“The county shall have the right and responsibility for setting and collecting consumer water dispensing station charges applicable to dispensing station customers,” according to the 1995 agreement.

Under the agreement, the county assumed responsibility and control of the existing city buildings and equipment for the three water dispensing stations and the county was required to pay the city $238 monthly for the duration of the agreement for the buildings and equipment.

The 1995 agreement did not transfer legal title to the county for the existing buildings, equipment or underlying land, but gave the county exclusive right to use the underlying land at no additional cost.

The county was not able to use the land for any other purpose than water dispensing stations or expand the water stations at the existing sites without written permission from the city under the agreement.

“During the term of this agreement, the county shall have exclusive authority and responsibility to provide for all repair, maintenance, improvements, and other costs associated with the buildings, equipment, and operation of the subject dispensing stations. The county, at its discretion, may recover its maintenance and operating costs through consumer dispensing station rates,” according to the 1995 agreement.

In 2010, the city and county executed a new agreement for the county to occupy city-owned property to operate the bulk water stations for another 15 years, with an automatic 15-year renewal unless the county provided termination notice 120 days prior to the lease end.

Under the 2010 agreement, the county may close or reopen any or all of the three sites as appropriate, but if a site is closed, the county remains responsible for maintenance and must notify the city if it temporarily ceases operation of one or all sites.

The city maintains ownership of the underlying land in the 2010 agreement, but does not charge the county a fee for use of the buildings and equipment.

Briggs said providing water service remained a challenge as another water delivery company had recently ceased operations.

He said the county can’t legally require new houses to be built with wells, so the situation of water access and delivery is worsening every year as more houses are built on cisterns.

Briggs said the city is also seeing housing growth within its limits and at some point, may no longer have the capacity to sell bulk water to the county.

Payne said that the Montana Department of Environmental Quality has been cracking down on water filling stations and wants to see improvements, which would the county’s responsibility to pay.

Briggs said that people put the hose in their water tanks, which could allow for cross-contamination.

He said he doesn’t know the probability of that contamination, but the county receives “nastygrams from DEQ about it.”

Payne said during the Oct. 7 work session that he knows some residents are unhappy about the proposed rate hike, but that many don’t realize it hasn’t been increased since 2017 and the increasing costs to the county.

The Electric requested and received the billing statements that the city sent the county for water at the three filling stations from July 2016 to the current date.

That information is below:

1120 21st Ave. S.

1428 36th Ave. N.E.

1605 8th Ave. N.W.

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