Boulder property owners are set to see sharply higher water and sewer rates beginning in May following the City Council’s approval Monday of the first increases in over a decade.
Under the proposed rate increases, which will be aired at a public hearing Apr. 20 before going into effect, most residential customers will pay $56.16 per month for water service, up 64% from the current rate. Monthly sewer charges will increase by $8, or 15%, to $55.84.
“This is the cost of running a water system,” the City’s bond counsel, Nathan Bilyeu, told the Council as it considered the new rates. The City last raised water rates in 2009, and sewer charges in 2014. But “inflation is happening, and you have to be updating your systems.”
The higher charges reflect both factors. The City’s operating expenses for its water system in 2025 were $18,090 above revenue, a function of higher costs for labor, chemicals and other inputs, according to City Administrator Brian Bullock.
In addition, the City plans to take on $1.8 million of debt to complete the financing of its $7.6 million in ongoing water system improvements. That 25-year bond will require annual principal and interest payments of $146,270.
Making those debt service payments and bridging the operating deficit will cost residential customers about $18 per month. In addition, the City will introduce a $4 monthly increase to cover anticipated inflation, making a total increase of $22.
Property owners with larger water pipes will pay proportionately more. A typical Main Street business, for example, will see their monthly bill increase from $61.15 to $100.53.
The more modest sewer rate increase primarily reflects higher operating and maintenance expenses. Energy costs for wastewater treatment have increased 23% in four years, according to Bullock; and lab and monitoring expenses are 18 times what they were in 2021 — a function mostly of a state regulatory change that increased the frequency of testing.
Officials said the rate increases will bring Boulder in line with comparable communities. “We’ve been well below the state average for a while,” Bullock said.
A 2023 Department of Natural Resource Conservation survey indicated an average Montana water rate of $52.46, which is expected to rise to $60 this year. Bilyeu noted that smaller towns typically face higher per-user costs, since their fixed infrastructural expense is spread across fewer property owners.
The City faces another pressure to increase rates, Bullock said: State grants and loans for water and sewer infrastructure often depend in part on evidence that customers are paying their share. “Everything I’ve read says that if you want to be competitive for that funding, they want to see that we’re charging above the minimum,” he said.
The Montana Department of Commerce has established target rates that municipalities should charge property owners for water and sewer service, based on household income. The current target minimum is 2.3% of a community’s median household income.
Boulder’s median income in 2023 was $61,250, which works out to target rates of $71.46 for water and $45.94 for sewer. That totals $117.40 a month, slightly higher than the City’s proposed total rate of $112. The Council’s public hearing on the higher rates will take place Apr. 20 at 5:30 p.m., at City Hall.
In addition, the City Council on Monday began early discussions on a possible wastewater treatment upgrade to address expected population growth. That initiative, which is just in the initial planning stage, could eventually necessitate a further rate increase.
