DOJ: News Release

McGrath: Cities with Self-Government Powers Exempt from Rate-Setting Laws

HELENA – In a formal opinion released Tuesday, Montana Attorney General Mike McGrath held that a local government with self-government powers may set rates for water and sewer service without having to follow rate-making laws that apply to general-power cities.

Bozeman City Attorney Paul J. Luwe requested the opinion in relation to a proposal to offer senior citizens discounts or preferential rates on wastewater or water charges.

Existing Montana law says that a municipality may create and operate a sewer and water system, and the rates will be “as nearly as possible equitable” in proportion to the services rendered.

The attorney general’s opinion held, however, that such provisions are not applicable to a self-governing municipality. Cities that adopt self-government charters need not follow most laws that govern the conduct of other cities and towns, McGrath held. Also, none of the exceptions to the general-powers rule require self-governing cities to follow the water and sewer rate-making laws.

The opinion followed a 1990 decision by the Montana Supreme Court that held that because the setting of water and sewer rates is not “affirmatively subject to state control,” a city did not have to apply the statutes when setting rates that applied to certain water customers.

Luwe also inquired whether the state’s Human Rights Act applies to such a discount. The opinion held that the Act applies to local governments, including self-governing cities like Bozeman. McGrath did not, however, reach the question of whether a senior discount would be a “reasonable” accommodation exempt from the Act’s prohibitions on age discrimination. The opinion noted such a finding would require resolution of factual issues to be decided by the Human Rights Commission.

An opinion carries the weight of law unless a court overturns it or the Legislature modifies the laws involved.

Share this!

Subscribe to our RSS feed. Tweet this! StumbleUpon Reddit Digg This! Bookmark on Delicious Share on Facebook