Ludington raises water rates.

March 23, 2015

By Rob Alway. Editor-in-Chief.

LUDINGTON — Users of the City of Ludington municipal water system will be paying more beginning May 1. During its regular meeting Monday night, Ludington city council voted to increase the rates.

“As you know, the Michigan Department of Environmental Quality (MDEQ) is requiring the city to complete significant upgrades to the water treatment plant and water distribution system, whether or not the city sells water to Michigan Power,” City Manager John Shay wrote in a memo to Mayor Ryan Cox and councilors.

“The current water rate and water readiness-to-serve charge are not sufficient to cover operating expenses, capital expenses, debt service and depreciation expenses associated with the water treatment plant and water distribution system. This would include the costs to upgrade the water treatment plant and water distribution system, as required by the MDEQ.”

The ordinance reflects adjustments to the water rate and water readiness-to-serve charge beginning May 1 water bills. The adjustment in the rates would address the declining cash balance in the water fund, which has decreased from $2.5 million in 2007 to $679,841 in 2014.

“It should be emphasized that the water rate and RTS charge will have to be adjusted again once the actual construction bids for the improvements to the water plant and water distribution system are approved in order to have sufficient revenue to cover these expenses and ongoing operational expenses.”

The construction bids are expected to be opened early in 2016.

Water rates in Ludington will be raised from $1.57 to $1.65 per hundred cubic feet (ccf). An average city resident would pay about $2.59 more per quarterly water bill or about 86 cents per month. The water rate charge to the City of Scottville would change from $1.35 to $1.42 per ccf and the water rate charged to those other water users outside the city would change from $2.90 to $3.04 per ccf.

Scottville City Manager Amy Williams said it is likely Scottville will increase its water rates to reflect the change in cost.

Shay said Ludington raises its water rates yearly based on the rate of inflation. For many years water rates were kept the same, which caused a decrease in the surplus.

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