Missoula has a leaky water system.
The old company that owned it knew this and refused to fix it.
Now Missoula owns the water system, and while they’ll fix it, they don’t want to pay for it.
Missoula wants homeowners to replace their water lines and they want them to pay for it.
Homeowners don’t really have the money. The city knows this so it wants to set up a loan system.
Well, what’ll it all cost?
According to Service Line Warranties of America, the average cost for water line replacements is between $50 and $200 per foot of work.
The average cost can be anywhere from $1,000 for a water main issue and $3,000 for something related to a sewer line. Sometimes costs for those things can spiral up to $7,000 or even $25,000, respectively.
This is why the City of Missoula proposes adding the cost to a homeowners’ water bill so it’s paid monthly, with a 3.9% interest rate.
Where’s the money going to come from to fix these water and sewer lines?
The city wants homeowners to pay; homeowners want the city to pay.
If the city does pay, it really is taxpayers footing the bill anyways.
What if there’s an option to have neither the city nor the homeowner foot the bill?
I think that’s possible if we use TIF money, and I believe that’s a justifiable use of that money via our Urban Renewal Districts (URDs).
I’d like to tell you about that, and also what some other cities have done with their water line replacement costs.
The old company that owned it knew this and refused to fix it.
Now Missoula owns the water system, and while they’ll fix it, they don’t want to pay for it.
Missoula wants homeowners to replace their water lines and they want them to pay for it.
Homeowners don’t really have the money. The city knows this so it wants to set up a loan system.
Well, what’ll it all cost?
According to Service Line Warranties of America, the average cost for water line replacements is between $50 and $200 per foot of work.
The average cost can be anywhere from $1,000 for a water main issue and $3,000 for something related to a sewer line. Sometimes costs for those things can spiral up to $7,000 or even $25,000, respectively.
This is why the City of Missoula proposes adding the cost to a homeowners’ water bill so it’s paid monthly, with a 3.9% interest rate.
Where’s the money going to come from to fix these water and sewer lines?
The city wants homeowners to pay; homeowners want the city to pay.
If the city does pay, it really is taxpayers footing the bill anyways.
What if there’s an option to have neither the city nor the homeowner foot the bill?
I think that’s possible if we use TIF money, and I believe that’s a justifiable use of that money via our Urban Renewal Districts (URDs).
I’d like to tell you about that, and also what some other cities have done with their water line replacement costs.
What Helena is Doing
Last December in Helena they decided to add “a new charge on city utility bills to fund loans for water and sewer line replacements.”
“It’s the cost that’s the biggest barrier,” Dennis Taylor said in reference to getting these lines replaced, and he should know - he’s been a city manager for MIssoula, Whitefish, Billings, and Eugene.
The city commissioners there voted to put forth a “loan program, which will provide zero-interest loans for residents requiring replacement of city water or sewer service lines to single-dwelling properties.”
So already we see a big difference between the Queen City and the Garden City - in Helena they don’t charge you for a loan, but here in Missoula we’ll charge you 3.9%.
In Helena they also raised the price of utility bills for “owners of single-dwelling units connected to Helena water and sewer lines” to help pay for this, not just those getting the work done. Water bills went up by $2.50 and sewer bills went up by $6.47. Those represent a 9% and 23% increase, respectively.
These new monthly charges on utility bills reflect the city’s $15,000 expected cost for each water and sewer line replacement.
Helena came up with the $15,000 figure by analyzing 100 different water service replacements and 263 sewer service replacements that have taken place in the city since 2012.
Each project is different, however, and a big reason for this is that the Helena is around 160 years old, with some lines that “were put in poorly” or lines that “may not have been buried as deep” as is now required. Some of the 100-year-old lines are even made out of clay.
The loan program in Helena will be capped at $15,000 per household and they’ll have a 10-year term. Also, property owners that earn less than 80% of the median family income are exempt from paying off the loan’s balance until the property is sold.
The takeaway here is that even if we do use the loan system, it won’t add a terrible amount to a monthly bill.
Still, is this the approach we want to take?
“It’s the cost that’s the biggest barrier,” Dennis Taylor said in reference to getting these lines replaced, and he should know - he’s been a city manager for MIssoula, Whitefish, Billings, and Eugene.
The city commissioners there voted to put forth a “loan program, which will provide zero-interest loans for residents requiring replacement of city water or sewer service lines to single-dwelling properties.”
So already we see a big difference between the Queen City and the Garden City - in Helena they don’t charge you for a loan, but here in Missoula we’ll charge you 3.9%.
In Helena they also raised the price of utility bills for “owners of single-dwelling units connected to Helena water and sewer lines” to help pay for this, not just those getting the work done. Water bills went up by $2.50 and sewer bills went up by $6.47. Those represent a 9% and 23% increase, respectively.
These new monthly charges on utility bills reflect the city’s $15,000 expected cost for each water and sewer line replacement.
Helena came up with the $15,000 figure by analyzing 100 different water service replacements and 263 sewer service replacements that have taken place in the city since 2012.
Each project is different, however, and a big reason for this is that the Helena is around 160 years old, with some lines that “were put in poorly” or lines that “may not have been buried as deep” as is now required. Some of the 100-year-old lines are even made out of clay.
The loan program in Helena will be capped at $15,000 per household and they’ll have a 10-year term. Also, property owners that earn less than 80% of the median family income are exempt from paying off the loan’s balance until the property is sold.
The takeaway here is that even if we do use the loan system, it won’t add a terrible amount to a monthly bill.
Still, is this the approach we want to take?
What Chicago is Doing
Chicago found out it had serious problems with lead in its water lines back in 2016. The problem was expected to cost homeowners “thousands of dollars.”
Gordon Berry’s family had a home where the water line ran “beyond the property line and under the city-owned sidewalk and street to the water main.” That line was 127 years old.
Chicago figured they had around 300,000 older homes with lead water service lines just like that. Berry called some plumbers up and they told him it’d cost between $15,000 and $18,000 to replace the old lead line with a new and safer one. It’d also cost another $3,500 for the city permits.
So Berry - who’s a senior citizen on a fixed income - will have to pay at least $18,500 to fix this problem. The city decided not to help homeowners fix those or help in paying for the fixes. The total cost to replace all of Chicago’s subpar lines would cost $4.5 billion.
Berry was mad the city wouldn’t help, and he pointed out to the water department there that places like “Denver, Milwaukee, Boston, Philadelphia, Pittsburgh and Washington D.C. all have plans or proposals in place to help defray the cost of replacement.”
By 2018 the city figured they actually had 375,000 lead-contaminated water lines, and one alderman there tried to get $2 billion to help fix the problem.
As of this writing, the city has done nothing to help homeowners fix this issue.
The takeaway here is that it costs a lot of money and city governments that are cash-strapped - like Chicago and Missoula - don’t want to spend that money and will fight tooth and nail to ensure they don’t.
Something else to consider are city permits to replace the lines. Will Missoula charge for permitting on top of the line replacements? It’s a good question.
Another thing to look into is the plans other cities have in place to defray the cost of water line replacements. I hope those on the Missoula City Council research this aspect.
Gordon Berry’s family had a home where the water line ran “beyond the property line and under the city-owned sidewalk and street to the water main.” That line was 127 years old.
Chicago figured they had around 300,000 older homes with lead water service lines just like that. Berry called some plumbers up and they told him it’d cost between $15,000 and $18,000 to replace the old lead line with a new and safer one. It’d also cost another $3,500 for the city permits.
So Berry - who’s a senior citizen on a fixed income - will have to pay at least $18,500 to fix this problem. The city decided not to help homeowners fix those or help in paying for the fixes. The total cost to replace all of Chicago’s subpar lines would cost $4.5 billion.
Berry was mad the city wouldn’t help, and he pointed out to the water department there that places like “Denver, Milwaukee, Boston, Philadelphia, Pittsburgh and Washington D.C. all have plans or proposals in place to help defray the cost of replacement.”
By 2018 the city figured they actually had 375,000 lead-contaminated water lines, and one alderman there tried to get $2 billion to help fix the problem.
As of this writing, the city has done nothing to help homeowners fix this issue.
The takeaway here is that it costs a lot of money and city governments that are cash-strapped - like Chicago and Missoula - don’t want to spend that money and will fight tooth and nail to ensure they don’t.
Something else to consider are city permits to replace the lines. Will Missoula charge for permitting on top of the line replacements? It’s a good question.
Another thing to look into is the plans other cities have in place to defray the cost of water line replacements. I hope those on the Missoula City Council research this aspect.
What Grand Rapids is Doing
Grand Rapids couldn’t be more different than Chicago when it comes to their water line problem.
Both cities have water lines made of lead, though just around 20,000 of Grand Rapids’ 64,000 water customers have those lines (375,000 Chicagoans have lead lines).
This city in Michigan decided to cover “the entire cost of replacing lead water lines for homes across the city - even the portion that is privately owned.”
And the cost isn’t that high - the city figures it’ll cost just $1,800 to replace “the entire water line.”
Michigan takes this seriously because of the disaster they had in Flint back in 2014.
In 2016 the state’s governor backed a plan to “establish some of the toughest standards for lead and copper in the nation,” which public water systems had to adhere to.
That’s the reason Grand Rapids was able to get more than 200 of those faulty lines fixed in 2016.
The city also did away with partial replacements in favor of full replacements. The old practice had the city replacing only the lead lines they owned while leaving the lead lines the private property owner had.
Before the new policy, the city required homeowner to pay for the cost of water line replacement, as well as the interest on their loan.
Now the city will replace those privately-held service lines for free if:
Grand Rapids was able to pay the $1.2 million in water line replacement costs they had in 2016 by using $1 million from their water system’s capital fund and another $200,000 from the system’s operations and maintenance budget.
The city figures it’ll cost $10 million to do 1,000 water line replacement projects each year.
The takeaway here is that the city realized how big of a problem neighboring Flint had, and they figured it’d be more cost-effective to just fix the problem.
The alternative is a national media firestorm that shames the city, preventing businesses from locating there. Thankfully, Missoula doesn’t have any lead in its pipes...that we know of.
Also, why is Grand Rapids able to replace a water line for $1,800 when it costs other cities $15,000? I’d like an answer to that, and I hope those on our City Council dig into it.
Finally, I hope Missoula considers the current service lines that are leaking, and how long they’ve been leaking. Is that the homeowners responsibility, or the water company’s? Is it the homeowners fault that the old water company didn’t fix this, and should they be penalized for that now by having to pay to replace those lines?
I don’t think so. I think it’s the current water company owner’s responsibility, which is the city. I think the city needs to pay to fix an issue they agreed to take on when they bought the water company with taxpayer money.
Both cities have water lines made of lead, though just around 20,000 of Grand Rapids’ 64,000 water customers have those lines (375,000 Chicagoans have lead lines).
This city in Michigan decided to cover “the entire cost of replacing lead water lines for homes across the city - even the portion that is privately owned.”
And the cost isn’t that high - the city figures it’ll cost just $1,800 to replace “the entire water line.”
Michigan takes this seriously because of the disaster they had in Flint back in 2014.
In 2016 the state’s governor backed a plan to “establish some of the toughest standards for lead and copper in the nation,” which public water systems had to adhere to.
That’s the reason Grand Rapids was able to get more than 200 of those faulty lines fixed in 2016.
The city also did away with partial replacements in favor of full replacements. The old practice had the city replacing only the lead lines they owned while leaving the lead lines the private property owner had.
Before the new policy, the city required homeowner to pay for the cost of water line replacement, as well as the interest on their loan.
Now the city will replace those privately-held service lines for free if:
- The city is already replacing the water main in the street;
- The current service line is leaking “anywhere from the curb to the meter.”
Grand Rapids was able to pay the $1.2 million in water line replacement costs they had in 2016 by using $1 million from their water system’s capital fund and another $200,000 from the system’s operations and maintenance budget.
The city figures it’ll cost $10 million to do 1,000 water line replacement projects each year.
The takeaway here is that the city realized how big of a problem neighboring Flint had, and they figured it’d be more cost-effective to just fix the problem.
The alternative is a national media firestorm that shames the city, preventing businesses from locating there. Thankfully, Missoula doesn’t have any lead in its pipes...that we know of.
Also, why is Grand Rapids able to replace a water line for $1,800 when it costs other cities $15,000? I’d like an answer to that, and I hope those on our City Council dig into it.
Finally, I hope Missoula considers the current service lines that are leaking, and how long they’ve been leaking. Is that the homeowners responsibility, or the water company’s? Is it the homeowners fault that the old water company didn’t fix this, and should they be penalized for that now by having to pay to replace those lines?
I don’t think so. I think it’s the current water company owner’s responsibility, which is the city. I think the city needs to pay to fix an issue they agreed to take on when they bought the water company with taxpayer money.
Conclusion
Based on what other cities are doing, Missoula should consider the following for its water and sewer line replacement projects and it should use the tax money it has now:
If the city insists upon doing the loans, then these should be guidelines:
It’ll cost money for all of those things, and the good news is that Missoula has this money.
While the mayor and county commissioners are bemoaning the failure of the local option sales tax in the legislature, the truth is that we have enough tax money now.
If we decide not to tap into the general fund, then we can use TIF money. Ellen Buchanan of the Missoula Redevelopment Agency has already greenlighted TIF money for local water and sewer lines.
“If you’re in an urban renewal district, taxes aren’t going up. But if I build a new building in your urban renewal district, my taxes go up, and that becomes the TIF. That’s what’s reinvested in utilities, water, sewer, streets, deconstruction, removal of blight, all of those things,” Buchanan said this week.
There you have it - even the head of the MRA says this is possible. And that agency has the money - $26 million budgeted to it in 2017.
I think the City Council needs to prod the MRA to give it the money in future budgets to fix these water and sewer lines. Another option is simply to budget less to the MRA and more to water line replacement projects.
But let’s not stop there.
There’s also the possibility of using TIF money to remove snow - the city used TIF money to remove garbage from the Riverfront Triangle, after all - and I think we could use it to fix roads and sidewalks, saving taxpayers money as well.
Spending TIF money is contingent upon there being a “public benefit” after that money is spent.
Who’s to say what that benefit is? How would a court decide that issue?
Currently a board of unelected officials appointed by the mayor decide where the millions of dollars in TIF money go.
They recently voted to give $1.5 million in TIF money to Stockman Bank, a company with $3 billion in assets.
If the City Council and the mayor and the MRA don’t want to go the TIF route, perhaps we should just use some of the extra $50 billion that we bonded for to buy the water company. That’s how much Engen took out in extra loans in case problems came up.
Well, if the water company didn’t fix the water lines for years, maybe we should use some of that extra bonding money to do that job.
Mostly, we don’t need to raise taxes, we don’t need a local option sales tax, and we don’t need to force homeowners to foot the bill.
The same can be said for our sidewalks.
The good news is that Missoula has lots of tax revenue each year, they usually have a surplus in the general fund, and we can therefore spend that money to fix these issues (in 2016 the city had $60 million in revenue from its three primary sources - taxes, intergovernmental, and charges for services).
And if we don’t think we have the money, just look at some of the things we’ve spent money on recently:
That’s $27 million in URD spending that took place over a couple months in 2016 and 2017.
Clearly we have the money.
Let’s put it to good use and fix our water system for our homeowners.
- Replace lines for free if the line is currently leaking anywhere from the street curb to the home’s water meter
- Replace the line for free if it’s already going to replace that street’s water main
- Increase the annual appropriations for Missoula Water’s capital fund and operations/ maintenance budget to cover replacement costs
If the city insists upon doing the loans, then these should be guidelines:
- Cap loans at $15,000 and give them 10-year terms
- Let those making 80% of the median family income know that they won’t have to pay off the loan until the property is sold
- Don’t charge interest on the loans
It’ll cost money for all of those things, and the good news is that Missoula has this money.
While the mayor and county commissioners are bemoaning the failure of the local option sales tax in the legislature, the truth is that we have enough tax money now.
If we decide not to tap into the general fund, then we can use TIF money. Ellen Buchanan of the Missoula Redevelopment Agency has already greenlighted TIF money for local water and sewer lines.
“If you’re in an urban renewal district, taxes aren’t going up. But if I build a new building in your urban renewal district, my taxes go up, and that becomes the TIF. That’s what’s reinvested in utilities, water, sewer, streets, deconstruction, removal of blight, all of those things,” Buchanan said this week.
There you have it - even the head of the MRA says this is possible. And that agency has the money - $26 million budgeted to it in 2017.
I think the City Council needs to prod the MRA to give it the money in future budgets to fix these water and sewer lines. Another option is simply to budget less to the MRA and more to water line replacement projects.
But let’s not stop there.
There’s also the possibility of using TIF money to remove snow - the city used TIF money to remove garbage from the Riverfront Triangle, after all - and I think we could use it to fix roads and sidewalks, saving taxpayers money as well.
Spending TIF money is contingent upon there being a “public benefit” after that money is spent.
Who’s to say what that benefit is? How would a court decide that issue?
Currently a board of unelected officials appointed by the mayor decide where the millions of dollars in TIF money go.
They recently voted to give $1.5 million in TIF money to Stockman Bank, a company with $3 billion in assets.
If the City Council and the mayor and the MRA don’t want to go the TIF route, perhaps we should just use some of the extra $50 billion that we bonded for to buy the water company. That’s how much Engen took out in extra loans in case problems came up.
Well, if the water company didn’t fix the water lines for years, maybe we should use some of that extra bonding money to do that job.
Mostly, we don’t need to raise taxes, we don’t need a local option sales tax, and we don’t need to force homeowners to foot the bill.
The same can be said for our sidewalks.
The good news is that Missoula has lots of tax revenue each year, they usually have a surplus in the general fund, and we can therefore spend that money to fix these issues (in 2016 the city had $60 million in revenue from its three primary sources - taxes, intergovernmental, and charges for services).
And if we don’t think we have the money, just look at some of the things we’ve spent money on recently:
- $7 million for mall developers
- $4 million for Reserve Street Pedestrian Bridge
- $3.5 million to the Mercantile Investors
- $3.2 million for a downtown parking structure
- $3 million to buy EKO Compost
- $1.6 million for the new downtown parking meters in 2016
- $1.6 million to reduce Higgins Avenue to 3 lanes on the bridge
- $1.5 million to Stockman Bank a year after construction started
- $1 million in April 2017 for Mary Avenue changes
- $500,000 a year for the cemetery
- $200,000 for a one-way street study in April, 2017
- $172,000 for a storm water drain study in June 2017
- $122,000 a year for parking meter upkeep
- $50,000 to Berkshire Hathaway in April 2017 to improve their building
- $50,000 to study Brooks Street in April 2017
- $48,000 to hire someone to look at a gate in May 2017
- $20,000 in April 2017 to study Higgins Avenue
- $16,000 paid to a California company for website work
That’s $27 million in URD spending that took place over a couple months in 2016 and 2017.
Clearly we have the money.
Let’s put it to good use and fix our water system for our homeowners.
