Esky council OKs utility rate hikes

Water, wastewater, electric bills set to increase as of June 1

ESCANABA — After months of discussion and public outcry over controversial rate increases, the Escanaba City Council approved the 2019-2020 fiscal year budget and fee schedule during its regular meeting Thursday night.

Despite members of the public expressing their displeasure at the planned rate increases set to take effect June 1 at past city meetings — including special meetings held specifically to explain the proposed rates — no members of the public spoke during the fifth and final public hearing on the city’s operating budget. Following the silent hearing, the budget and the accompanying fee schedule were approved unanimously by the council.

Thursday’s decision means Escanaba residents will see a 45 percent jump in water rates starting next month. This will bring the total cost to $4.15 per thousand gallons, plus the monthly availability charge, which is based on the size of a customer’s service line and can vary from $22.82 per month to $1,140.05 per month.

In the 2018-2019 fiscal year, water rates were charged on a sliding scale with the first 10,000 gallons being charged at $3.55 per thousand gallons, with the cost per thousand gallons decreasing based on consumption to as low as $2.26 per thousand gallons for more than 500,000 gallons. That sliding scale has been eliminated for 2019-2020.

The monthly availability charge in 2018-2019 ranged from $15.74 to $786.24 per month depending on the size of the service line.

The sudden spike in fees is the result of new rules regarding the replacement of lead service lines passed down from the Michigan Department of Environment, Great Lakes, and Energy (EGLE), formerly the Michigan Department of Environmental Quality. The rules require cities to begin replacing lead service lines at a rate of five percent per year starting in 2021. Any line that is or was connected to the main using a lead gooseneck is considered contaminated regardless of whether or not tests determine there is a dangerous level of lead in the water.

For Escanaba, the rules mean 200 lines a year will need to be replaced, as lead goosenecks were historically used to connect water mains to sewer lines in many parts of the city. EGLE’s mandate forbids partial line replacements except in emergencies, meaning the city must replace the line from the main to the residential or commercial meter, typically located inside a building’s basement. All of the costs are the responsibility of the city, including the work that takes place on private property.

Based on similar line replacement projects the city has undertaken in the recent past, the city could be responsible for between $5,000 and $10,000 per line replacement.

Sewer costs for residents will also increase 20 percent in June, however this increase is to pay for repairs and upgrades at the water plant, as well as upgrades and repairs to the sewers themselves. Many of these upgrades and repairs are aimed at reducing the need for wastewater by-passes into Little Bay de Noc, which are sometimes needed after storms force water into cracked sanitary sewer pipes or the flow of wastewater is more than the system is capable of handling for other reasons.

The increase brings the cost of wastewater to $3.94 per thousand gallons, based off water metering, plus the monthly availability debt service charge assessed to properties. The service charge varies based on the size of the water service, and ranges from $9.34 for the smallest service lines to $466.12 for 12-inch service lines.

In 2018, the monthly service charge for sewer ranged from $7.78 per month to $388.43 per month.

Unlike the hike in water rates, the wastewater rate is part of a series of planned increases. The rate will jump an additional 20 percent next year, and again in 2021.

Electric rates will rise slightly from $.0957 per KWH for a residential customer to $.0963 per KWH. Commercial customers will also see an increase to $0.9010 per KWH from $0.8925 per KWH.

No changes will be made to solid waste fees.

While the budget and fee schedule were approved and adopted Thursday, the decision lacks teeth until a series of ordinances can be adopted. Thursday’s meeting also served as the first reading of those ordinances. The second reading and the planned official adoption of the ordinances needed to enforce the newly approved budget will take place at a special meeting on May 23 at 9:30 a.m.

Despite the residents of Escanaba being silent on the budget Thursday, residents of Wells Township took to the podium during the meeting’s second public comment period to voice their concerns over the increase they will see as a result of the city’s new water rate. The township residents who are connected to the city’s water supply are currently charged double whatever the Escanaba rate is.

“(City Manager Patrick Jordan) and I sat down with the supervisor from Wells Township and began a discussion that’s going to take some time to conclude,” Mayor Marc Tall told the council during the meeting.

According to Jordan, township residents have been paying the doubled rate since 1991, when a 20-year contract was signed between the city and the township. That contract expired in 2011, but the rate has remained in effect since no amendments to the agreement were made.

“They can have their system back today if they wanted it. We can put a master meter in and sell them the water at wholesale rate and they can run their own system. My belief is that, when they have to do all that and all of the administrative and operations and maintenance needs that a system has, they’re not going to do it for less than they’re paying us right now when they’re paying double the rate,” said Jordan.

In 2007, the city did attempt to draw up a new contract with the township that included sewer service. Despite a complete contract being written, the agreement never gained traction and was never signed.

Further talks are expected between the two parties. However, it was noted at the meeting that the city’s incoming attorney, John M.A. Bergman, of Nastoff & Bergman, P.C., also represents the township as legal council. If needed, the city may draw on the expertise of a different attorney for the discussions.