Utility Rate Increase/Impact Fee Public Comment from Vicki SaxbyCouncil Members
City of Kalispell
P.O. Box 1997
Kalispell, MT 59903
February 19, 2020
Dear Council Members,
I am writing to you in protest of the proposed increase in fees. While I do understand that you need to
cover the cost for necessary upgrades, I feel that there are flaws in your requests and conclusions, and that
you need to do a better job of coming up with a solution that will meet the actual needs of the City as well
as a solution that will be most cost effective and fair to the ratepayers. Your proposed rate plan fails to do
this.
Impact Fees.
I will start with the proposed plan for the impact fee rate change as I feel that this is the most egregious of
the three. Impact fees are meant to cover the cost of new infrastructure that is needed as a result of
growth. This follows the notion that current ratepayers should cover the costs for the current system, but
should not have to subsidize growth. Newcomers to the City need to cover their own costs. For many
years, the City of Kalispell residents were not recouping those costs, however, that was rectified with the
study done in 2013, when newcomers were required to pay their own way through increased impact fees.
According to the "Impact Fees for Water and Wastewater" — "Final Report", written by HDR Engineering in
October, 2019, impact fees have risen considerably from 2013. Water impact fees have gone from $2,567
to $6,741 for a W Residential meter. But, instead of recouping the cost for that increase from the
newcomers, you are proposing reducing the rate to 28% of the actual cost. This means that existing
ratepayers will be picking up 72% of the cost. Sewer impact fees have risen from $5,757 to $6,346, and yet
you plan to cut the cost to newcomers so that they are paying 45% of the actual cost, which means that
current ratepayers will be picking up 55% of those costs as well. How is that fair?
In your council meetings, it was mentioned that your hope is to encourage development of low-income
housing in the city to help the "homeless." Lowering impact fees is not the answer to that. There are
absolutely no guarantees that the developers will build low-income housing just because you lowered these
fees. I believe that there are many other true incentives that would serve us better, such as using our TIF
funds in the TIF areas to put in appropriate infrastructure which would lower the developer's cost in
building in return for building a certain number of low-income housing units in those areas. I am sure that
there are other monetary incentives that you could "trade" for a required number of units. Simply lowering
impact fees with no requirements does absolutely nothing.
I find it very disingenuous that in your letter to us consumers, you fail to disclose that actual costs for
impact fees. In fact, the wording in your letter makes it seem as though impact fees have gone down, and
that is why the cost is being lowered, when in fact, the opposite is true. You state that the
"recommendations" to adjust the fees according to your proposed new schedule are based on the Kalispell
Impact Fee Committee and its consultant, HDR Engineering. However, when I review the "Consultant's
Recommendations," I cannot find where they are recommending that the fees be lowered. In fact, they
state that "the City as a matter of policy may adopt a water impact fee which is less than the calculated fees
as shown in this Report, but in doing so, the City will be sharing some portion of development impact costs
with existing water utility rate payers." It appears that you have chosen to burden 75% of the cost of the
water impact fees and 55% of the sewer impact fees with existing ratepayers. I am completely against this
proposal.
\A/atPr RatPc
With regard to the water rates, it appears that the bulk of the increase in rates is needed to cover the cost
for meter replacement and new software. I have to question the actual need for new meters at this time,
as the last time meters were replaced was not that long ago. I believe that you began the last meter
replacement go -around in 2005. That means that the oldest meters are barely 15 years old, and many are
less than that. From the research that I have done, 15 years is on the lowest end of an expected meter
replacement cycle. I believe that our City should be able to do better than this for the ratepayers. Unless
the current meters are failing miserably, why not make them last longer, and save us money? You point
out the "benefits" of the new meter to customers in your "Frequently Asked Questions," but in all honesty,
do you really think that the average user will get any benefit at all from these new meters? How many
people have major water leakages in the average year, and if they are not monitoring their water usage
themselves by going online and looking on a daily basis, how will this new system really help them?
How much real benefit will the City get from these new meters and advanced monitoring system? Have
you done a cost/benefit analysis and have proven that these will save the City and ratepayers money in the
long run by going to a new system? Hosting fees NEVER go away, and once you convert to a new hosted
system such as this, there is no easy way to go back, and the hosting fees will continue to go up. I would
urge you to seriously consider whether or not this is the wise choice in the end. At some point in the
future, we may need to go to this type of system, but is now really the right time to do this, or can we make
our current system last longer and reap the savings.
rSPXA/Pr RAtPc
With regard to sewer rates, I do not understand why Evergreen users' rates are not increasing at the same
percentage as the City of Kalispell in FY2021. Ours are going up 2 % times more than theirs. I do
understand that they only pay for treatment, while we pay for treatment and collection, so our rates are
higher, however, it would still seem reasonable that at the very least, the percentage increase should be
the same for both entities. In fact, since Evergreen is lucky enough that the City built a treatment plan that
was big enough to handle treating their waste, there should be a surcharge for that privilege. In fact,
according to City of Kalispell meeting minutes from 11/07/94, around the time this new treatment plant
was built, the City staff indicated that "... users residing outside the City will pay a surcharge of 50% for
collection and treatment and 100% if they utilize treatment only." From what I can tell, this is certainly not
the case. I have to wonder why not. What happened to that proposal?
In conclusion, while I do understand that we need to keep our infrastructure in good condition, which may
require an increase in fees, I think that the proposal put forth is not equitable to current ratepayers and
clearly is not in the best interest of the City in the long run. I think that you should review these rates and
come up with a plan that meets the needs, without going beyond our actual needs.
Thank you,
Vicki Saxby
Homeowner, ratepayer and taxpayer of the City of Kalispell since 1984