Bismarck Public Works held two open houses this week to help residents better understand complex options for the structure of future water and sewer rates. Residents also got the chance to fill out a survey on the method they would prefer.
Public Works maintains the city’s infrastructure and is recommending changes to balance the cost of service against revenue -- 12 options to update water rates are being considered. The surveys will be considered by the city commissioners as they determine which option will be chosen. The new rates will be reflected in billing beginning in 2024.
The current utility bill structure was put into place in 2018 and reflected in billing beginning in 2019. Residential water bills are calculated through a five-tier system, with every tier that a household passes increasing its bill. Multifamily and commercial unit water bills are determined by usage.
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Some residents have complained about the system, saying their water bills are too high, particularly during the summer lawn-watering season. Former Mayor Marlan “Hawk” Haakenson is circulating a petition to reduce city property taxes and utility bills to the levels they were in 2018.
Before the 2019 change, Public Works was charging residential homes $2.54 million less than the cost to serve them annually. It also was charging multifamily and commercial properties $2.13 million more than what it cost to serve them annually, according to Public Works data.
Utility bills include items not related to water or sewer, such as curb stop repair, street and traffic light maintenance, waste collection, and utility account processing. Proposed changes would impact only water and sewer rates. Public works will make sewer consumption charges the monthly average of winter months this year with the goal of stabilizing sewer prices.
Water rates
There are three options being considered for water and sewer minimum charges -- a flat monthly fee customers pay to be connected to the city’s water and sewer system. The options are based on cost of service and other factors.
Option A would include 50% of the costs associated with meeting demand on an average day. Option B would include portions of the maximum day and maximum hour costs -- the day that water demand is the highest and the hour that demand is the highest -- and would lower the unit rate in high-consumption tiers. Option C would include debt service -- as payments increased, the minimum charge would rise.
Option C would be the cheapest and Option B would be the most expensive minimum fees. Details can be found at bit.ly/3HvoT1u.
Whatever Public Works doesn’t recover from the minimums, officials will adjust by raising consumption prices.
There are four options for water consumption rates. The price of water consumption is based on the amount of units that a customer uses. One unit is equivalent to 748 gallons. Roughly 50% of the bills each year are under eight units.
Current consumption pricing has five tiers for single-family residential units, and flat rates for multifamily residential units and nonresidential units. Tiers are based on the amount of units that residences use. The higher the tier, the more customers pay.
Alternative one would adjust consumption rates based on updated costs of service. This would keep the five-tier system's lower unit prices for most single-family residences. Public Works currently receives excess revenue from single-family residences. This option would raise unit prices for multifamily residential units and commercial units.
Alternative two would change single-family residences into a four-tier system. This would raise unit prices for the current lower-tier single-family residents and lower them for higher-tier customers. Unit prices for multifamily residential units and nonresidential units would rise.
Alternative three would charge unit rates per class. The classes are single-family residences, multifamily residential units and nonresidential units. This would see an end to the tier system, and the price for single-family residences would be one stable price, regardless of unit usage. Multifamily residential units and non-residential units would see prices increase.
Alternative four would charge a flat rate per unit for all classes. This would raise prices for all except single-family residences in higher tiers.
More information and a link to the survey are at bismarcknd.gov/2093/2023-Utility-Rate-Update. Survey results will be accepted through Feb. 12.