On November 30, 2026, a few hundred lots on the Hill in Thompson Falls owe the first installment of a sewer assessment that runs for 20 years. Resolutions 877 and 878, which were on the Thompson Falls City Council's agenda for its October 19 meeting, set those payments at $186 or $146 every six months, depending on the district. In the same season the city lowered its mill levy, and that's the number most people have heard about.
If you're comparing houses in town this fall, the lower tax rate is the less useful of the two. For many properties, the costs tied to rebuilding Thompson Falls' water and sewer systems now shows up on the water bill and on a special assessment, and both are bigger than the tax cut.
The tax cut is real, and smaller than it sounds
The council approved the fiscal 2026-27 budget 5-1 in early September. The city mill levy for 2027 is 234.45 mills, down from 285.98 in 2026, as the Sanders County Ledger reported. The city's highlight sheet worked out what that means in dollars. A property with a $100,000 market value pays an estimated $178.18 in city taxes for 2027, down nearly $40. A $300,000 property drops from an estimated $652.03 to $534.55, a savings of about $117 a year.
Those numbers cover the city's share only. County, school, state and other taxing jurisdictions are separate. The same budget lists $14.14 million in total expenditures, a figure that includes major water and sewer capital projects and isn't all day-to-day operating expense.
Where the cost shows up instead
The first place is the water bill. On July 13, the council voted 5-1 to raise the monthly base rate from $42.75 to $60.63, effective August 1, 2026. The base still includes 2,000 gallons, and each additional 1,000 gallons costs $1.50. Council member Catherine DeWitt explained the vote to the Sanders County Ledger this way: "Right now water is leaking into the ground and we have to get that fixed."
According to the July 13 council packet, the rate supports a planned loan of about $1.933 million for the city's share of the water project, borrowed over 40 years at 3.125%. The same notice sets a $32.75 monthly vacation rate after a zero-usage bill. That matters if you're looking at a second home you'll leave empty for part of the year.
The second place is the Hill. The higher water rate started August 1, 2026, and the first sewer installment is due November 30, 2026, so both charges actually begin this year. The table below lines up a full year of each at the new rates against a full year at the old ones. It uses a $300,000 home on a standard base water bill and the city's own figures:
| Annual change at the new rates | Not in a sewer district | In SID 4 | In SID 3 |
|---|---|---|---|
| City property tax, 2026 to 2027 | about −$117 | about −$117 | about −$117 |
| Water base rate, 12 months | about +$215 | about +$215 | about +$215 |
| Sewer assessment, per year | $0 | +$292 | +$372 |
| Net yearly change | about +$97 | about +$389 | about +$469 |
The table leaves out the monthly sewer bill, county and school taxes, and any water used above the base 2,000 gallons. On a cheaper house the tax savings are smaller, so the gap gets wider. A $100,000 home saves about $40 in city tax against the same $215 a year in higher water charges.
What the Hill is paying for
Wastewater Phases 3 and 4 extend city sewer across the Hill, from Greenwood Street to the eastern edge of the city. The work includes 31,000 feet of gravity main, more than 15,000 feet of force main, nearly 41,000 feet of service piping, three new lift stations, an upgrade to the Main Lift Station on Maiden Lane, and service to properties at and near the Rimrock Lodge. S&L Underground started construction on September 22, 2025, and the city's project page puts estimated completion at January 15, 2027.
Earlier phases covered properties west of Grove Street and below the railroad tracks, and that work was finished by spring 2025. So which side of Greenwood a house sits on tells you whether it's at the start of this cost cycle or already past it.
The city's construction update for the week of September 28 shows where crews have been working. A mainline crew was in Pine Tree Hollow and was due to move up to Kaniksu after that. Service crews were on Clay, Elk and Woodland and were headed to Church and Hill streets. A grinder pump crew was working on 5th and Clay, and crews on Aspen Court were pressure testing and connecting pumps before moving to 5th and Maple. Construction runs Monday through Thursday, 7:30 a.m. to 6 p.m. Earlier in the project, the extension into Solid Rock Estates was completed, and work moved to East Haley Avenue, Golf Street and Boulder Street.
Most of the project isn't paid for by these lots. Back in January 2023, Great West Engineering told the council Phases 3 and 4 were 75% grant funded, the Sanders County Ledger reported, and the special improvement districts would repay a 20-year loan for the rest.
The final numbers moved after 2023
When the districts were formed, the city estimated $356 a year per lot for SID 3, based on 186 lots, and $279 a year for SID 4, based on 160 lots. The final resolutions remove lots that were combined with neighboring lots or found to get no benefit from the sewer. That leaves 178 assessed lots in SID 3 at $372 a year, on a principal of $6,179.78, and 153 lots in SID 4 at $292 a year, on a principal of $4,901.96. With fewer lots sharing the same bond, each lot pays a bit more than the estimate a buyer might have heard in 2023.
The bonds run 20 years at 1.375% for SID 3 and 1.25% for SID 4, plus a quarter percent required by state law. Payments are due each May 31 and November 30, and the clerk certifies them to the state alongside the general tax levy. The assessment is levied against the property itself. When a Hill house changes hands, how the remaining years get handled is part of the deal.
Connecting is required, and restoration runs through the city
Thompson Falls' code of ordinances covers occupied property within city limits that abuts a street, alley or right-of-way where a public sewer is located. When that sewer is within 50 feet of the property line, the owner must connect at their own expense within 120 days of official notice. Connections need a city permit and an inspection, with fees set by council resolution.
In September, a judge ruled that the city could go ahead with sewer construction in the Pine Tree Hollow subdivision inside the recorded public utility easement, the Sanders County Ledger reported. Testimony at that hearing described the contract between the city and S&L Underground, which requires any disturbed property to be restored to existing or better condition.
The same testimony laid out how restoration works afterward. If a problem shows up after construction, the resident contacts the city, the city goes to Great West, and Great West has S&L fix it. The contractor's one-year warranty doesn't start until the whole project reaches substantial completion. If you buy on the Hill this winter, you may be the one making that call, even though the work happened before you owned the house.
Questions to settle before you make an offer
- Is the parcel inside SID 3 or SID 4? The Phase 3 and Phase 4 parcel maps on the project page show the project area.
- Who pays the November 30, 2026 installment if closing falls near that date, and how will the remaining 20-year balance show up at closing?
- Has the house been connected yet, and did it get a connection notice that started the 120-day clock?
- If there's a grinder pump on the property, who owns it, who maintains it, and whose electric meter powers it? City Hall is the place to ask.
- What monthly sewer user charge applies once the house is connected, and what's the current permit and inspection fee?
- Has the yard been restored after construction? Any restoration claims should be documented before closing.
City Hall's number is (406) 827-3557, and the city posts weekly work areas on its wastewater projects page.
A few quick answers
Does a house west of Grove Street face these assessments? No. Those properties were in Phases 1 and 2, which were finished by spring 2025, and SIDs 3 and 4 fund Phases 3 and 4 on the Hill.
Does the lower mill levy help everyone in town? The city portion of the tax bill drops for every taxable property. Every household on a standard city water bill also pays about $215 more a year on the higher base rate, so the water increase is larger than the tax savings on a $300,000 home.
Is the assessment the same for every lot? Within each district, yes. Every assessed lot in SID 3 pays $372 a year, and every assessed lot in SID 4 pays $292, no matter what the house is worth.
This is general information drawn from public city records, not legal, tax or financial advice. Please confirm the details for any specific property with City Hall, a title company, or your own attorney or tax professional.
If you're weighing a house on the Hill against one closer to downtown, Deborah Warren can help you work out the full yearly cost, including taxes, water and any sewer assessment, before you write an offer. Contact Deb for a local market consult.
