The Shelby City Council agreed unanimously to pass a water rate increase on Monday, May 7, during their regularly scheduled meeting. 

Lisa Kearns spoke briefly to the Council as a representative from the Nine-Mile and Oilmont Water Districts, encouraging the Council to consider the north country in the decision as there is a substantial difference in rural residence water rates.

“Both Districts are willing to pay their fair share,” said Kearns. “But part of Shelby’s debt load exceeds the time we have even been a district. Please consider the rural communities as extended parts of the community; it’s households using that water.”

Kearns also reminded everyone that Montana Rural Water Authority is willing to help Shelby with the debt load.

“There’s nothing formal yet from them and at this point we’re looking at timing,” said Mayor Gary McDermott. “But they did back off the legal protest of our rates, so they are understanding of our position.”

While they did agree to increase the rates, it was not without discussion and an amendment to the ordinance. The Council amended the ordinance to change the volume rate from 323 down to 275, which decreases the revenue of the increase by $36,000.

“The rate increase as it stands helps with the reserve requirement,” explained McDermott in regards to the original ordinance. “I respect whatever you decide to do.”

“We have to meet the debt service requirement of $376,000, that’s the big factor,” said City of Shelby Finance Officer Jade Goroski. 

Councilman Luke Casey asked if by setting the volume at 275 if the City would default on their obligation for bonds. Goroski advised they would not.

“I say we raise as little as we can right now and see where we are at,” said Casey. “I keep hearing if things work out then we will lower the rates, I don’t see that ever happening. If the City has the money, they spend it.”

The Council then moved forward with approving Ordinance No. 834, with the amendment of 275 for the base instead of 323. Since the rate will be decreasing a public hearing is not required.

McDermott updated the Council on the ongoing situation with Humic. The grant funding to move forward with the water line for the Devon Water District hinges on Humic signing off on grant paperwork, something they have currently refused, due to prior miscommunication and misunderstanding. 

A settlement with Humic has been offered by the company to the City in the amount of $90,000. Humic is requesting the first $40,000 be immediate, but paid as a credit to their water bill. The remaining $50,000 would start being paid in Fiscal Year 18-19 or 19-20.

“We really don’t have a lot of choice on this,” McDermott told the Council. “Humic thought they would be reimbursed out of a portion of the grant, but none of it qualified. We need them to cooperate so we are in compliance with the grant and can get them and Devon hooked up. They are asking the City for a $25,000 water credit and a credit on dumping charges for $15,000. We would do the $15,000 as an additional credit to the water. The remaining $50,000 would be cash, paid out over three years.”

The settlement with Humic will be listed as an action item on the next meeting agenda.

Andy Evenson of KLJ was in attendance to give a rundown of the storm drain and fourth cell projects, advising that the fourth cell will kick off before the storm drain project. Mid-June is the projected start time for the fourth cell and mid-July for the storm drain.

The Council also approved Resolution No. 1976, authorizing the sale of industrial lots to Greg and Peggy Taylor, the repairs to be done on the Shelby Booster Station, the sewer pump station repairs and the hiring of four people for the summer mowing crew.

The Council was advised that Cindy Florez, who is the instructor and manager of the Civic Center and most recently the swimming pool, has decided to retire. McDermott advised the Council that the Civic Center operates at a deficit in excess of $100,000 and encouraged the Council to consider some other options instead of rushing to fill the position.

“The annual salary for that position is $77,000,” said McDermott. “The Civic Center operates at a deficit north of $100,000 already. Can we afford to fill it?”

Council President Lyle Kimmet asked who would now take over managing the swimming pool, as Florez had recently taken on that responsibility. He was advised that the position has been filled by Randi Lamb, who works at the City Shop. She will incorporate the 20 hours a week allotted for the pool into her schedule.

City Superintendent Loren Skartved advised the Council the City will have violations in this month’s sewer samples.

“We will have to write a letter to explain and go from there,” he said.

The Council also approved increasing the City’s match on the CDBG Planning Grant from $2,500 to $3,100 and accepted a land purchase proposal from Joe Pehan in the amount of $2,000. 

The City Council will meet again for their next regularly scheduled meeting on Monday, May 21, starting at 6:30 p.m. at City Hall.

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