The Glasgow City Council heard from a rural water specialist that the city’s water system is running a deficit because the rates are too low.
John Weikel, a circuit rider for Montana Rural Water Systems, told the council at Monday’s regular meeting that his preliminary analysis of the system shows the annual cost is $659,000, while receipts are $634,440, putting the account in the red by nearly $40,000.
“Looking at the numbers, you’re looking at an increase of probably about $10 on the base rate,” Weikel said.
The base rate for a 3/4-inch residential line is now $15. He said $25 is still much less than other cities charge. It would allow the city to put about $125,000 a year into an account for replacement costs. The only money being put aside is $316,800 a year for future pipeline replacement, but some pumps and motors are nearing the end of their lifetime. A replacement motor is $80,000, for instance.
Glasgow has not increased its water rates since 1999, although there have been huge increases in power consumption and the costs of sampling, insurance and other items.
Weikel said a municipality should never go this long without looking at its rates, but all in all, the system is doing well. The debt service is only $4,500 a year, which he said is “incredible” for a municipal water service.
In 2012 the system sold 218 millions gallons of water.
The council also discussed Dry Prairie Rural Water’s request to buy water from Glasgow until they have their treatment system finished and can supply it themselves. Weikel called that a win/win for the town. Water rates will stay intact and it will make extra money for the town for as long as Dry Prairie needs to buy water.
It will probably take three months to get a new base rate effective, Weikel said, which would be after the high summer use period. The council might hold a special meeting week to act on the rate change.
In other business, the council approved on second reading an ordinance establishing a City Planning Board. They also appointed Raye Jean Dowe and Mike Hughes to the City-County Library Board.