Escanaba finalizes rate increases
ESCANABA — Despite the Escanaba City Council finalizing a series of utility rate increases that include a 45-percent increase for water and the first of a series of 20-percent increases for wastewater during a special meeting Monday morning, the city’s water department is struggling to keep up with planned infrastructure projects in parts of the city.
“Just in … December I started formulating a budget to replace main and water services with paving — that’s part of that rate increase that we have — that money’s not there, so even if we were to do this work, we would need to take an internal loan to front the money to get this work done,” said Escanaba Water and Wastewater Superintendent Jeff Lampi.
Following the approval of the water and wastewater rate ordinances Monday, the total cost per 1,000 gallons rose roughly 45 percent to $4.15. Availability charges also increased, and any discounts property owners were receiving based on high water consumption were eliminated.
Wastewater rates went up to $3.94 per thousand gallons, based off water metering. The rate increase is the first in a series of planed 20 percent increases over the next three fiscal years. The monthly availability debt service charge assessed to properties also rose above the 2018-2019 levels.
Despite the two rate increases being instituted at the same time, the money raised by the increases is earmarked for different purposes.
The water department increase is to pay for line replacements mandated by the Michigan Department of Environment, Great Lakes, and Energy (EGLE), formerly the Michigan Department of Environmental Quality, which aim to reduce lead in the water supply. The rules require cities to begin replacing lead service lines at a rate of 5 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 new 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. All of the costs are the responsibility of the city, including the work that takes place on private property.
“There were stories this weekend about other cities now starting to talk about it so we were just ahead of the game,” said Council Member Peggy Schumann of the rate hikes.
The wastewater increase is to pay for upgrades to the water plant and sewer system, which, among other things, would reduce the number of times overflow is discharged into Little Bay de Noc.
While the rate changes mean a substantial increase in the anticipated revenue for the water and wastewater funds, that additional money won’t accumulate until residents have paid the increased rates for some time. Until then, Lampi’s departments have to work with what is available and try to keep up with the Department of Public Works paving schedule.
“Over the last several months I’ve been given conflicting instruction on how to proceed with underground utilities. On one hand I’m told, ‘get everything done before we pave.’ On the other hand I’m told, ‘let ’em pave and don’t worry about your stuff underneath it,'” Lampi told the council Monday.
While DPW has worked to pave projects where water and wastewater infrastructure work was not necessary, Lampi said the list of projects that fit that criteria has grown short.
Two key projects planned for the summer are 5th Avenue South and Sheridan Road, which require both paving and infrastructure work.
On 5th Avenue South, 26 services need to be connected with 40 feet of piping and one full block of two-inch galvanized service line needs to be removed. The project will cost somewhere between $125,000 and $195,000 and requires at least two months of labor.
On Sheridan Road, 21 services need to be replaced at a cost of $84,000 to $136,000. The project is expected to take a month to complete, excluding any roadwork.
No contractor has been lined up for either project. Depending on cost and contractor availability, the projects may be the responsibility of city crews.
Regardless of who ends up doing the work, between securing funding, labor, and getting council approval for projects, Lampi said the departments are struggling to keep up with DPW’s paving schedule.
“Either tell me, the water plant, not to be concerned with underground infrastructure this year so that I can breathe a little easier; ask DPW to slow down or cease and desist where there’s underground issues and wait a year or so so I can catch up; or instruct me to do all the work at any costs by any means to get this work done this summer,” Lampi told the council.
Both the 5th Avenue South and Sheridan Road projects are on the agenda for the council’s next regular meeting, Thursday at 7 p.m. At that time, the council will vote whether or not to approve the hiring and retention of contractors for the work.
Water and wastewater weren’t the only utilities discussed Monday. The council approved the ordinance increasing electric rates from $.0957 per KWH for a residential customer to $.0963 per KWH. Commercial customers rates also increased to $0.9010 per KWH from $0.8925 per KWH.
In addition to the rate increases, the council approved entering into a contract with McLean Engineering of Moultrie, Ga., which will assist the city with complying with the Small Wireless Communications Facilities Deployment Act, at a cost not to exceed $5,000. Part of the requirements of the act are to determine pole rental rates for telecommunication companies that use city electric poles for supports.
“It’s a very strange thing that this got pushed through in a round about way giving the FCC authority over power utilities,” said Electric Department Superintendent Mike Furmanski of the new law.
Up until this point, the city has charged roughly $14.40 per pole. Furmanski expects the new law and the formula used for calculating pole rental fees to lower the rental rates.
“If we didn’t disapprove (the law) or discourage it, we should have because this is a screw job,” said Furmanski, who noted the rental fees have been used to replace poles throughout the city.
In other business, the council tabled a planned discussion of the city clerk and assistant assessor evaluations to the regular meeting set for Thursday.