Sturgis Municipal Utilities Board approves changes to water tariffs and surcharges for 2023

Action by the Sturgis Municipal Utilities Board this week introduced rate changes for residents across the city beginning Jan. 1.

The city applied for funding from South Dakota’s State Revolving Loan Fund (SRF) and received both a $750,000 grant and a $4,188,000 loan. Funds received from the state will be used to construct a new well – the city’s eighth – and install a new water storage tank with new redundant water pipes.

The terms of the program require the city to set a surcharge that covers annual payments on the loan, approximately $176,472, plus a 10% buffer. To meet state requirements, a $4.55 surcharge will appear on the estimated 3,555 utility accounts in Sturgis beginning January 2023. However, both the Sturgis City Council and the Municipal Utilities Board approved lowering the base rate from $11.96 to $7.41, so the bid won. t actually affect the total amount paid by residents.

“Are we really going to charge our customers an extra $4.55?” said Ron Waterland, who sits on the board of directors of the public utility company. “So what we basically did was a forgiveness from our board and the City of Sturgis by lowering the base rate.”

In a Nov. 8 press release, City Manager Daniel Ainslie said the state’s funding package has several benefits, including that the $750,000 grant covers 15% of total project costs and the low interest rate on the loan is far lower than any other fares available to the city.

Where users will see an increase is in the monthly water availability fee, which will increase to $18.17 in January from the current $17.

The city introduced the water availability fee back in 2013 to cover the cost of maintaining the entire water system.

“If you have a bill, you should pay for the upkeep,” Waterland said.

It was originally supposed to increase by 3% every year from 2015, but that increase never happened. According to the city, if the rate had increased annually, it would now be $21.19.

It’s also a step to address occasional dormant accounts that benefit from being plugged into the city’s system but don’t use water year-round. This includes residents wintering elsewhere and businesses that only operate during the Sturgis Motorcycle Rally.

“A lot of people go and maybe turn off their water and stuff like that,” Waterland said. “They still have to pay for the upkeep.”

Waterland said during the Oct. 25 MUB meeting that the city should take these annual increases into account to avoid ending up in the same situation later.

Both changes to the city’s water rates will go into effect in January 2023.

Contact Darsha Dodge at [email protected]

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