Residents want more info as Hungry Horse water increase looms

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Residents in Hungry Horse could see a substantial water rate increase.

Residents say they want to see harder figures before they’ll endorse a water rate increase in Hungry Horse, but the system’s debt service is already costing the average user more than $15 a month.

Dan Kramer of Montana Rural Water Systems Inc. went over the system’s budget with a crowd of about 50 people at the Canyon Elementary School last week.

He noted that the system currently has three loans it’s paying on, which cost the system about $72,000 a year, or about $15.59 per month for the average household.

Add in an operating and maintenance budget of about $114,578 a year and that equates to another $24.69 per household.

The current base rate for water service is $27.45 and then customers are billed based on a per 1,000 gallon rate usage.

In other words, the system isn’t bringing in enough cash to make its bills, said board president John Rippe. It’s running a deficit of about $3,000 a month right now, using what reserves it has and cash from additional water sales to make ends meet.

The board proposes raising the base rate for the average household to $44,59 a month, which would also give the system about $20,000 in reserve funding annually. The idea of the reserves is so that the system doesn’t have to borrow money in the future, Kramer said.

But residents weren’t too happy about the proposal and wondered how folks on fixed incomes could afford a hefty increase in their water bills.

They wanted to know more about the loans the system had, the interest rate on the loans and how much was left to pay on them — numbers the board didn’t have at hand.

They also wanted a breakdown of the system’s operating costs, such as salaries for employees and other expenses. The system has one-full time operator who uses his own vehicle and is on-call 24 hours a day. It has two other part-time employees, including a bookkeeper and a part-time helper for maintenance. All told, the payroll for all three employees is about $5,600 a month, or $67,200 a year, though that doesn’t include payroll taxes.

Folks wanted a greater breakdown of personnel costs, but boardmembers didn’t have that immediately available.

Residents also noted that cities like Columbia Falls and Kalispell have a much lower base rate.

But Kramer noted that Hungry Horse has far fewer users — about 350, give or take, which drives up the cost per user.

But crowd members recalled that it wasn’t that long ago — 2007 — that rates were raised about $10 per month and at that time, it was to assure that the system did have a reserve.

Rippe said he couldn’t speak to past boards, as he’s only been on the board a couple of years now.

Another meeting, where more information should be available, is scheduled for Sept. 10 at 5:30 p.m. The board will then meet Sept. 19 at 6 p.m. at the Hungry Horse water board office.

Members of the public are encouraged to attend both meetings.

Kramer said the system will have to eventually do something about its rates. It it defaults on loans or becomes insolvent, the county will take it over and set water rates. There will be no local control, he warned the crowd.

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