Percent increases were applied to the revenue amounts as developed in 2019 rate study. In 2019, the City hired HDR an experienced, independent engineering consultant in the water and sewer utility industry to conduct a cost-of-service study that examined current and future revenues, as well as evaluate operation and maintenance expenses, and determine an adequate funding level for Kalispell’s utilities. HDR performed a comprehensive cost of service study to determine whether existing rates were sufficient to meet the system rehabilitation and replacement needs as well as the City’s operational costs for the water and sewer systems. Our current rate structure was also assessed for compliance with industry best practices.
The City has determined additional annual rate increases are necessary over the next four years in order to continue providing reliable and sustainable water services into the future.
The proposed increases to water rates are triggered by many factors including:
- Complete planned infrastructure improvements necessary to address rehabilitation, replacement, and new demand utility projects
- Significant escalation of construction costs
- Inflationary increases in supply, material, labor and utility costs
- Meet required debt service for capital projects