Where: Grace, Caribou County, Idaho

Problem: Communities in rural areas need help adjusting rate structures to accommodate inflationary pressures and ensure loan repayments for capital improvements.

Solution: Rural Community Assistance Corporation (RCAC) prepared a rate study to help the city achieve its strategic goals.

Grace is a small city in Caribou County, Idaho. The city’s municipal wastewater treatment plant was originally built in the 1960s and was extensively upgraded in 1982, but the aging sewer infrastructure had not been updated since 1985. At that time, there were 1,200 residents in Grace; today there are about 950. The treatment plant is too large for the city’s current needs.

Grace received a loan with principal forgiveness in 2021 to upgrade its wastewater treatment plant and replace its collection system’s old components. However, the city is concerned about its ability to repay the loan, especially in light of potential cost overruns due to inflation and today’s volatile construction market.

RCAC began working with Grace in 2022 at US Department of Agriculture Rural Development (USDA RD)’s request to help the city determine an appropriate rate structure to ensure it can repay its loan. In addition to inspecting the plant’s construction upgrades, RCAC completed valuations for the company’s customers and system assets with the operator and city leadership, equipping them with the tools to meet future customer needs.

RCAC provided city leaders with several rate adjustment options, including one that factored in the $2.5 million Environmental Protection Agency (EPA) State and Tribal Assistance Grant (STAG) award provided thanks to the efforts of Rep. Mike Simpson’s office. If there are no cost overruns, customers will save $25 per month on average. RCAC and the City of Grace are cautiously optimistic about managing costs and will monitor the situation closely.

For more information, contact:
Ari Neumann, Director, Community & Environmental Services
(916) 447-9832; 1032
aneumann@rcac.org