If you're comparing a house inside Eureka's town limits with a place out in the Tobacco Valley on its own well and septic, you'll probably ask the seller for recent utility bills. Those bills are accurate. They're also based on rates the town hasn't updated since 2018, and the engineering behind the next rates is already published.
For in-town property, the water and sewer line is the part of your monthly cost most likely to change over the next five years. How much it changes depends heavily on grant applications the Town Council approved on September 14, 2026. Even in the engineers' best case, with grants, the combined bill still ends up well above today's rate. Grants affect how big the increase is, but there will be an increase either way.
The Bill You're Shown Is a 2018 Number
Eureka's March 2026 wastewater preliminary engineering report (PER), prepared by HDR, lists the sewer rate at $48.11 per equivalent dwelling unit (EDU) per month. An EDU is roughly one household's worth of use. The water rate is $42.65 per EDU. The report gives the town's average combined water and sewer rate as $90.76 per EDU.
Those rates have covered day-to-day operations, but not much else. Sewer rates bring in about $452,000 a year, which the report says pays for current operations and loan payments "with minimal, if any, surplus remaining for unforeseen circumstances." The town is still paying off sewer revenue bonds from 2002 and a state loan from 2023 for sewer expansion.
Then the pipe failed.
One Pipe Carries the Whole Town
All of Eureka's sewage flows to Lift Station No. 1. From there, a single force main pumps it to the lagoon treatment cells. A force main is the pressurized pipe that pushes wastewater uphill or across distance. Eureka's was installed in 1977. The PER says it "has reached the end of its design life, causing repeated failures and environmental violations."
There have been three unauthorized discharges into the Tobacco River since 2018, plus a sewer overflow on December 23, 2025 that was contained. Because of them, the town is now under a consent order from the Montana Department of Environmental Quality, which requires corrective action. According to the PER, DEQ has ordered rehabilitation of the force main, so the town has to fix the pipe one way or another.
HDR recommends replacing the 8-inch force main along its current route between 2026 and 2029, at an estimated $3.615 million. The town may also bid a trenchless relining option to compare costs. That cost gets split among a small number of customers. The PER's financing tables spread it across 840 EDUs. Here is what the engineers projected, assuming a 20-year state revolving fund loan at 4% and 3% yearly inflation on construction costs:
| PER projection (per EDU, per month) | With $875,000 in grants | With no grants |
|---|---|---|
| Increase for Phase 1, the force main | $26.97 | $34.96 |
| Combined water and sewer after Phase 1 | $117.73 | $125.72 |
| Combined after Phase 2 upgrades | $154.56 | $170.53 |
HDR calls these figures a "worst case." The report says the town should try to find more grants or use cash on hand to borrow less. Phase 2, planned for 2027 to 2031, covers larger sewer pipe on 1st Street, Cliff Avenue and 1st Avenue East, lagoon dredging, new blowers and pumps, and fencing at Lift Stations No. 2 and No. 3.
The gap between the two columns, about $8 per household each month for Phase 1, is what grant money buys. So it matters how grants get awarded.
Why Grants Make the Increase Smaller but Don't Prevent It
The Montana Department of Commerce compares every town's utility rates to a "target rate," which is based on local median household income. Eureka's combined target rate is $83.85 per EDU.
The PER describes the Montana Coal Endowment Program as "gap financing." Grants are recommended only when a town's rates are at or above that target, or when the town can't borrow. The town also has to match the grant at least dollar for dollar, using cash, loans or other grants. Under those rules, a grant fills part of the gap and a loan, repaid through rates, still covers the rest.
At $90.76, Eureka's combined rate already sits above the $83.85 target. Its sewer rate is well above its share of the target ($48.11 against $32.81), and its water rate is below ($42.65 against $51.04). Even in the best case, with grants, the combined rate after Phase 1 comes out to about 1.4 times the state target. Without grants it's about 1.5 times.
The town's own grant history shows what reviewers weigh. At the September 14 council meeting, the town engineer said a CDBG planning grant for the water system had been denied, partly because the water side had no consent order or failing system. The sewer side has both, and the engineer said that makes it a strong candidate. The consent order is a problem for the town, but it also helps its grant applications.
What Has Actually Been Decided
The steps so far, from the town's posted agendas and meeting recordings:
- July 6, 2026. Council held a water and sewer rate work session, marked "NO DECISIONS."
- August 10, 2026. Resolutions #2026-824 (water) and #2026-825 (sewer) were on the agenda as resolutions of intent to raise rates. In the meeting recording, a council member described these as notices published in the paper to show "what we're thinking about doing with the rates," and said items can still be dropped before the final ordinance.
- August 24, 2026. A public hearing was held, but it covered the town's final budget and tax levy. Rates weren't on that agenda.
- September 14, 2026. Council held another rate work session at 6 p.m., then voted at its regular meeting to apply for a $750,000 CDBG construction grant and a federal BRIC grant for the force main. The engineer described both as requiring a 25% local match.
None of the agendas posted from July through September list a final rate ordinance, dollar amounts or an effective date. In September, rates appeared only as a work-session topic. The grant mix has also changed. The PER modeled $750,000 from the Coal Endowment Program plus a $125,000 state Renewable Resource Grant and Loan (RRGL) grant. The construction applications council approved in September were for CDBG and BRIC, and those are applications, not awards.
The August discussion shows the range being talked about. A council member mentioned a state reference figure of $120 that had been reduced, "I think it's at 107 possibly." The recording doesn't say what those figures measure, so treat them as numbers under discussion, not as a rate. Members also discussed an increase now with more increases over the next three years.
The Open Question Is Who Pays
The biggest unresolved issue in the August debate was how to split costs among customers. Eureka has never had a separate commercial rate. One council member said that apartment buildings and car washes each run on a single water and sewer line, so single-family homeowners would end up "carrying the burden." Another suggested pricing businesses by meter size, the way the town's EDU multiplier already works, where a 1-inch meter counts as 7.29 EDUs.
If you're buying a single-family house in town, that decision affects how much of the total you pay. If you're looking at a small commercial or mixed-use building on Dewey Avenue, it could change your operating costs more than any other single item. Neither outcome has been decided.
The Streets Are Being Planned at the Same Time
The same September 14 meeting adopted a town road assessment report. It also approved bid documents for road repairs funded by tax increment financing (TIF) at six spots: First Avenue at Second, Third, Fourth and Fifth Streets west, Third Street and Cliff, and Fifth Street east of the highway. The work is mostly asphalt milling, concrete intersections and some sidewalk. HDR said it won't fix the town's wider drainage problems.
The September 10 road assessment suggests budgeting $150,000 to $350,000 a year for maintenance. It lists reconstruction concepts with no funding yet, including Central Avenue at about $7.2 million, School Loop/Vons at $3.6 million and 1st Avenue West at $4.1 million. Cliff Avenue and 1st Avenue East show up in both the sewer plan and the street plan, so those blocks may see more than one round of construction.
How This Changes an In-Town Versus Rural Comparison
A home on its own well and septic doesn't pay into the town system. Its costs show up in other ways, and the rural side of that comparison is covered in our post on buying land versus a home in Eureka. For in-town homes, the 2026 to 2031 cost picture now has published numbers behind it. The PER's projections put Phase 1 at roughly $27 to $35 more per EDU each month, and the larger Phase 2 projections come on top of that.
Property taxes are moving the other way, at least at the county level. On September 2, Lincoln County adopted its FY 2026–27 budget, and by its own calculation county property taxes drop by $73.78 on a $300,000 home. The state's 2026 rate tiers for primary residences and second homes are on the Montana Department of Revenue's 2026 property tax page. To see how a change in monthly costs affects a payment, try our mortgage calculator.
A Few Questions I Hear
Where can I check the current rates and meeting schedule? Town Hall is at 11 Dewey Avenue, and the town posts agendas on its council agendas page. The September agenda included a vote on moving the October meeting date because of the holiday, so check the posted date before you go.
What does connecting a new build in town cost? The PER lists a flat $1,500 charge for new sewer and water connections. That figure could also be revised along with the rates.
Could the force main end up costing less? Possibly. In September, HDR planned a camera inspection of the pipe where it crosses under the river. If the steel casing is in good shape, the crew could reline the pipe instead of replacing it, and the engineer said that would save money.
Is the Forest Service connecting to town sewer? Its design is final, but the engineer said it is waiting on its own funding and has no set date.
If you're weighing a house on a town street against acreage outside Eureka, I'm happy to go through the utility numbers, the pending rate decisions and the rest of the carrying costs with you before you write an offer. Charity Waldo is here in Eureka. Talk to Charity about any in-town property you're considering, or get your free valuation if you're selling and want to know how buyers will view your bills.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
