Undeveloped properties in Bismarck that do not possess water meters will not be billed water utility fees.
On Tuesday night, the city commission approved doing away with the new fees after meeting several times with area land developers, homebuilders, the Bismarck-Mandan Development Association and the Bismarck-Mandan Chamber of Commerce, all who opposed charges for utilities on empty lots.
Owners of manufactured-home parks and apartment complexes were also a part of the discussion. The commission approved reducing the living unit charge on manufactured home parks and apartment buildings from the current rate of $7.50 to a reduced rate of $2.50, effective March 1.
Properties that have water meters will continue to be billed at the 2018 rate.
“A couple of things have become very clear to me,” said Keith Hunke, city administrator. “One is the need to communicate with all parties in a timely fashion. We did not meet this expectation and we will do a much better job on this in the future.”
The second thing that has become apparent, he said, is that there appears to be competing needs. The water utility fee, which is necessary to provide safe drinking water, safe treatment of wastewater and a suitable storm water management system, is competing with the local homebuilders’ and rental property owners’ market, which is having a difficult time adjusting to decreasing rental revenues and increasing land development costs.
“I do believe all parties involved desire to continue to do their part to provide affordable, attainable housing in Bismarck,” Hunke said. “I think what may appear to be a competing need can actually be turned into a common goal.”
In addition, the commission approved suspending the 2018 city budget’s Capital Improvement Plan relating to the water treatment plant, water distribution, the wastewater treatment plant, storm sewer, sanitary sewer and water administration.
The initial motion Tuesday night did not suspend the CIP, causing Commissioner Josh Askvig to voice concerns.
“Without saying we're going to suspend the CIP, I can't, in good conscience, say we let those projects go forward without a funding source and no reassurance that it won't come right back onto those that we were trying to balance this out,” he said. “That's potentially $40 million we're going to have to recoup from property taxes or current rate payers.”
The budget committee plans to meet as soon as possible to reconcile the budget, Hunke said.
“At this point, I don't know if we'll have a funding gap or not. If we do, part of the work of the budget committee will be to offer alternatives to funding if the water utility does not have sufficient revenue to fund it,” he said.
The city also plans to hire a consultant to conduct a cost of service rate study for the water utility, as well as to review policies and procedures to develop subdivisions in the city’s development cost policy, Hunke said.
"While this is a unique pause in the history of the city of Bismarck, I think it's also the right one,” said Mayor Mike Seminary. “It doesn't mean it will not cause some difficulty, but we've listened...and I think that is the most important part of the discussion."