Consultant: Bismarck water system could see $58M shortfall
BISMARCK, N.D. (AP) — Bismarck could face a $58 million funding shortfall in the next decade if utility rates aren’t raised, according to consultants assessing the city’s fee system.
Stantec’s analysis indicates that the city could cover costs through gradual rate increases, The Bismarck Tribune reported . Stantec proposed increasing water rates by 8 percent next year and then by 3.75 percent annually afterward. Sewer service rates could be raised 5 percent annually.
The company was hired to analyze what’s needed to maintain the city’s water, sewer and stormwater systems after proposed changes to the fee structure failed amid concerns from local builders.
The infrastructure needed to serve the city has increased but the revenue it collects for those services hasn’t kept up, city officials said.
“In 2017, we restricted spending, but that’s only temporary. It’s not sustainable long term,” said Michelle Klose, Bismarck’s director of utility operations.
The water service has projected revenue of about $18 million for 2018, while expenses for 2019 are expected to be $21 million.
The city could reduce the amount it holds in reserve to cut back on rate increases, the consultant said. The city could also take on more debt and use bonds to fund system expansions, Stantec said.
Stantec will next analyze how to fairly allocate increases based on how much each user contributes to costs. Final recommendations are expected in November.
The city has 371 miles of water lines that on average deliver 11 million gallons per day to about 21,000 customers. The city has 313 miles of sewer, while the water treatment plant treats 6 million gallons per day.
Information from: Bismarck Tribune, http://www.bismarcktribune.com