MISSOULA – Missoula Water won’t be raising rates this fall, saying it has enough revenue on hand to cover existing operations and upgrades for the foreseeable future.
Two years ago, Montana’s Public Service Commission had fined Liberty Utilities in a high profile rate case when it owned the utility. That penalty, which could have been as high as six percent, came along when the city acquired the system.
But now, Missoula Water managers say they’ll get by without a price hike.
“We were supposed to increase the rates up 6 percent in September, but the decision was made to, let’s hold the rates. You know, we can do this. It just shows you that being able to operate the system, reinvestment into the system under those rates,” said Missoula Deputy Public Works Director Dennis Bowman.
Bowman and his management team told the city council Wednesday morning that rates can hold even though the city has invested nearly $4 million in system upgrades and improvements over the past year.
A lot of that work is catching up on deferred maintenance to the system when it was being run as Mountain Water. The city had built that into its takeover budget.
That doesn’t mean rates will stay the same forever. Bowman says the city is starting a rate study analyzing its utility charges.
“We know in the future we’ll probably have to raise rates,” Bowman said. “I’m hoping that we can hold off for three to five years. We’ve already made it through one year. But, as we’ve seen, prices go up. Material prices go up. Power bills go up. We can do it with the current rates but we might end having to defer things. And I’d prefer not to defer it because then we’re no better off than the previous owners.”
The city is also working on changes that will combine billing for Missoula Water and the stormwater utilities which will managers say will save tens of thousands of dollars.