Ludington council expected to increase water rates.

November 23, 2015

By Rob Alway, Editor-in-Chief.

LUDINGTON — The City Council will hold a first reading of an ordinance change to increase the city’s water and sewer rates tonight during its regular meeting. The increase in rates is due to upcoming upgrades to the city’s water treatment plant and water distribution system, which are required by the Michigan Department of Environmental Quality.

The cost of the upgrades is expected to cost the city an estimated $32.5 million over the next three years. The city is currently in the process of applying for financing for the projects through the U.S. Department of Agriculture’s Rural Development which offers below-market interest rates on bonds that would be issued with a 40-year term.

For a typical residential customer, the proposed water and sewer rate increases in 2016 will increase the customer’s bill by about $14.34 per quarter or $4.78, according to City Manager John Shay. “Even after three years of such increases, the typical residential customer’s bill will still be less than today’s bills in many surround communities in Michigan,” Shay said in a memo to the city council.

The ordinance change would establish specific increases to the water rate, water readiness-to-serve rate (meter charge), sewer rate and sewer readiness-to-serve rate for all users in the city and outside of the city in 2016, 2017 and 2018 along with smaller incremental increases beginning in 2019. The one exception would be for water sold to Pere Marquette Charter Township. The annual increases to the water rates, not sewer rates, are limited due to an agreement the township and the city have because of the large volume of water that is being sold to Michigan Power. The power plant, located on Sixth Street in Pere Marquette Township, is the city’s largest water customer.

“If the city were not able to sell water to Michigan Power, the proposed increases to the water rate and water readiness-to-serve rate would be significantly higher for all other users than what is currently being proposed.”

The 2016 charge for a customer with a 5/8-inch and 3/4-inch meter will be $6.81 per 100 cubic feet used in each quarter. It is currently $6.39. Customers with a 1-inch meter will see an increase from $9.59 per 100 cubic feet used to $10.21.

The increase has already impacted the City of Scottville, whose city commission voted last week to increase its rates by 20% beginning January 2016. The city of Scottville pays $1.61 per 100 cubic feet used in a quarter. Scottville also faces major repairs to its water distribution system, which accounts for some of the increase as well.

City Council meets at 6:30 p.m. at city hall, 400 S. Harrison Street.