Newman Lake irrigation district considers hefty rate hike; small farmers say they can’t afford it

A small public water utility in the Newman Lake area says it needs to nearly double its billing rate to keep up with operating costs. After community pushback, the board will consider a less severe – but still substantial – increase by cutting into its contingency fund.

The Moab Irrigation District, which uses the alternative historical name of the unincorporated community near the Idaho border north of Liberty Lake, serves about 720 customers.

The board originally proposed a 131% rate hike, then considered reducing that to 76% at a meeting Tuesday. The district raised rates 25% last year and 8% in 2022.

The increase would apply to domestic water and irrigation.

“Keep in mind, we’re customers too,” Chairman Jerry Neff said at the top of the meeting. About 20 customers, mostly farmers, crowded into the small boardroom at the district’s offices.

After board discussion, Neff went around the room and gave everyone in attendance a chance to speak.

Public comments were respectful, understanding the board has a tough decision, while offering ideas and imploring compromise.

Scott Carver owns a Christmas tree farm on land his family has used for nearly 50 years. Recently, he said he invested in converting his gun sprinklers to a much more efficient drip irrigation system.

Even though he is saving the district a lot of water, he is still paying the same flat rate, about $10,000 a year. If rates increase 76%, that would put him close to $18,000, which he said he can’t afford.

Others said they would have to stop farming and watering their lawns.

“Now you’ve lost a customer,” Carver said. “That’s not where this district wants to go. So, I think there’s got to be a compromise.”

The district has faced recent pressures from a combination of higher energy, payroll and insurance costs, Neff explained. The agency is also dealing with high unpaid customer fees, higher regulatory standards and paying off a five-year capital improvement loan from the county.

Although the $500,000 loan has a good interest rate, it has a steep payback schedule. Neff recommended that future loans have longer terms.

While other districts face some of these same pressures, the lack of growth in Newman Lake makes it harder to absorb the costs.

Two years ago, nearby Pasadena Park Irrigation District north of Millwood increased its rates 65%, but for different reasons, said that district’s manager, Bruce Davidson.

The Department of Ecology suddenly granted Pasadena Park additional water rights, so it needed to take out a loan to build new wells to keep up with growth. The rate increase covered the loan. Davidson said most customers were understanding of the increase once the reason was explained to them.

Moab board member Holt Ayles, who also works for Spokane County Water District 3, said it’s impossible to compare districts because each is unique.

The Moab Irrigation District is relatively new, organized in 1968. Over its history, Neff said it has operated with a high risk factor with low reserves.

“We’ve been pretty lucky,” Neff said.

The district has a long-term goal of building up its reserves. The latest budget set aside $245,000 to add to the reserve fund to cover things like emergencies, unemployment insurance, future loan approval, debt payment reserves and other unplanned expenses.

The reserve fund currently has about $352,000, and the board said it’s important to maintain reserves because the district only collects revenues twice a year.

Neff said the district can’t afford to cut any more expenses, so any cuts would have to come from the $245,000 in contingency funds.

After a long discussion, the board directed the secretary to cut $200,000 in the draft budget. The new rate hike will need to be recalculated from that figure, but Neff said he thinks it will approximate the 50-55% range.

The board is scheduled to vote on the final 2025 budget and billing rates Friday.