Water District seeks new contract from Miles City Council

Custer County Water and Sewer District (No. 2) members were concerned about the district’s future now that its contract with the city expired June 30. They attended the Miles City Council meeting Tuesday to discuss those concerns.

The district provides the City of Miles City’s water and sewer services to county residents, as well as a few city residents.

District board president Don Bundy said their customers include commercial service and residents in the Aye, Dent, Richland Park and Michels additions, as well as to North and South Haynes avenues and along Highway 12 to Baker. 

According to the district’s attorney Gary Ryder, in an interview with the Miles City Star in early September, Ryder said the district contacted the city about an extension on the contract back in December. The mayor and a couple Miles City Council members met with the district in March and there was a written request by the district to put the matter on the agenda in June.

Mayor John Hollowell said the city still isn’t sure what changes it wants, if any, to the contract. He said he and the council could meet with the district after Sept. 26 to renegotiate the contract.

Several times at the council meeting, members of the district board commented on what good relations they’ve had with the city in the past 25 to 30 years.

The district was formed in the late 1970s or early ‘80s to help the city get money for the new sewer treatment plant. In time it came to include water. 

When the city decided the district should provide water, the lines were put in.

“Of course when you add water lines, the price goes up and when it was completed nobody wanted to go on water and sewer because the price was too high. So Custer County Water and Sewer District 1 went bankrupt,” he said.

The bank made a deal that if another district was formed, it would reduce the debt, so the second district was formed.   

Over the years the district contributed to many projects, including $50,000 for a new Carbon Hill water tank, $10,000 for Carbon Hill water line repair, $50,000 for the water line extension in the northeast portion of town, and $45,000 for a water line under Interstate 94. 

Bundy said the district just invested $50,000 or more in the Valley Drive East water line, then the Bakken drilling shut down and many of the commercial customers have left. 

“We don’t know if we are going to be able to recoup our investment on that,” he said.

Board member Jerry Backlund said the district is fiscally sound and has made a lot of revenue and donations to the city.

He said there has been a lot of talk about annexation. 

If that happens, the district will go away, Backlund said.

“We would like to know where we stand before we can proceed (in helping to fund the city with anymore projects),” said Bundy, the district board president.

Hollowell said annexation, if it happens, doesn’t mean the district would lose their customers. 

City Attorney Dan Rice said he’d have to look into that but currently the district has city residents as customers.

There have been no recent discussions at council meetings to annex any property, but that’s always a possibility.