Esky council OKs budget, utility hikes
ESCANABA — Despite concerns raised by members of the public and one Escanaba city council member over the financial impact the coronavirus has had on residents and local businesses, the council approved the 2020-2021 fiscal year budget Thursday — moving forward with double-digit rate increases for water and wastewater.
The two municipal services, both under the charge of Water/Wastewater Superintendent Jeff Lampi, are in need of significant upgrades.
The Michigan Department of Environment, Great Lakes, and Energy (EGLE) has mandated that water lines made of lead, downstream of lead lines, or that have ever been downstream of lead lines must be replaced to the meter at the city’s expense. In Escanaba, 80 percent of the lines in the city meet this definition of contaminated, meaning the city must replace 200 lines a year beginning this year to replace the 4,500 lines within the state’s 20-year window.
At the same time, the city’s wastewater system has fallen into disrepair, with many of the issues revolving around the wastewater plant. To fix the problems, the city has approved improvements at the plant, which, among other things, would reduce the frequency of partially treated water being discharged into Lake Michigan.
Both projects come at a significant cost. Last June, the council approved what was to be the first of three annual 20 percent increases to wastewater rates and increased the monthly availability debt service charge above the 2018-2019 fiscal year levels to fund the plant improvements. However, bids for the work came in higher than expected, and even after scaling back the project, Lampi told the council during budget meetings held in March that the department would need a 30 percent increase in the 2020-2021 fiscal year, followed by two years of 35 percent increases to bring the project to fruition.
Also last June, the council approved a 45 percent increase to water rates and increased the water availability charge to support the line replacement projects. That increase was to be followed by a 35 percent increase in the 2020-2021 fiscal year budget, a 5 percent increase in the 2021-2022 budget, and a 2.5 percent increase in the 2022-2023 budget. No changes were made to the rate plan at the budget hearing level.
With unemployment rates skyrocketing as a result of the coronavirus and the resulting government-mandated closures of many businesses, some have balked at the 30 percent increase in wastewater rates and 30 percent increase in water rates residents and local businesses are now facing.
“I think any way of helping these businesses and residents by not increasing these rates on water and wastewater I think is judicial. I think the administration should look at that and if there is any opportunity to not do this, I think it should be had,” said Escanaba resident Jim Berthiaume, who later called the budget “reckless” after its final approval by the council.
Also speaking against the rate increases was Paul Harvey, director of new business development at Engineered Machined Products, who said he had met with City Manager Patrick Jordan, Lampi, and Electric Department Superintendent Mike Furmanski to voice concerns over the impact rate increases would have on EMP.
“We would also like to ask for some forbearance on the electric and water rates as well,” he said, referencing both the water and wastewater rates and a 1.75 percent increase planned for electricity.
Council Member Tyler DuBord, the only member of the council to vote against approving the budget as presented Thursday, argued the city should not impose the rate increases and should also institute a spending freeze and a freeze on pay increases in the coming fiscal year to compensate for the economic hardships caused by the virus.
“I think we really need to look at this again because things have changed since we looked at this budget and went through it back in March, and everyone’s making adjustments. Every business, households are making cutbacks and adjustments, preparing for the … unknown,” said DuBord, adding he had spoken with a number of restaurant owners who were concerned about the added utility costs.
The rest of the council, however, voted differently on the budget. Council Members Peggy O’Connell, Ralph Blasier, and Karen Moore all argued for the budget as it was presented Thursday. Mayor Marc Tall, who had spoken out against the increases in March, made no statements for or against the rate increases, but voted with the majority of the council in favor of the document.
Of the three vocally supporting the budget, O’Connell was arguably the most passionate about the need for the increases. She said the new rates would be roughly average among rates in the Upper Peninsula, an average family in the city would only see an increase of around $300 annually, the city had failed to keep up with rate increase in the past, and that the city would be in worse shape later if the money was not collected and allowed to “compound” over the years.
“If we delay this it could be worse later. If we delay it we could end up with state funds. If we delay it we are going to pump more partially treated sewage into the lake, and I can’t stomach that,” said O’Connell.
She also referenced what she described as “a lot of money pumped into this community” as a result of the Pandemic Unemployment Assistance program increasing weekly unemployment by $600.
City Manager Patrick Jordan spoke out against changing the budget at the eleventh hour. Thursday’s public hearing on the budget came after two days of budget workshops and four other public hearings, most of which included no comments from citizens.
“Now is not the time to try and start tinkering with these rates. We discussed it and discussed it and if you move one piece of this, the whole thing kind of crumbles,” said Jordan.
Following the budget vote, the council approved a new labor agreement with the public safety department’s command unit. Despite speaking out in favor of a raise freeze, DuBord voted with the rest of the council to approve the agreement, which includes slight raises for the commanders.
The rest of the meeting revolved around setting two special meetings to wrap up the changes made in the budget. A special meeting was set for Thursday, May 28 at 12:30 p.m. to approve the tax levy and appropriations ordinances. A second special meeting was set for June 1 at 12:30 p.m. to approve electric, water, wastewater, and solid waste rate ordinances. Both special meetings will be held virtually.