September 23, 2018

City council to hold work session Thursday to discuss possible water rate changes

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WEST BRANCH — The West Branch City Council will hold a work session Thursday, Sept. 13, to discuss potential changes to the city’s water rate structure as well as possible changes to the rates themselves.

The work session, which is scheduled for 6 p.m. at the city police station on Page Street, is open to the public. Last week city council members participated in one of three mini work sessions to look at changes to the structure. During the mini sessions, Mike Engels from the Michigan Rural Water Association presented a new way for the city to figure its water bills for residents.

Under the new proposal, the city would get rid of its current 3,300-gallon minimum usage charge. Engels said approximately 70 percent of customers do not hit 3,300 gallons of usage, therefore the smaller customers are supplementing the larger customers’ bills. The change would adjust the bill so all customers paid only for what they used.

As a result, Engels said, some residents will see a smaller increase on their bill, whereas larger water customers — such as MidMichigan Medical Center - West Branch, which is the largest water user in the city — will see a larger increase.

City Manager Heather Grace said built into that rate structure will be a certain amount budgeted for capital improvements, such as replacing water mains, maintaining the system and other projects. The amount that would be budgeted for capital improvements is still up in the air, however, and that is what Thursday’s work session is designed to discuss.

“The higher we make that number, the higher the rates go up,” Grace said at Monday’s city council meeting.

She said the range discussed for capital improvements was between $200,000 per year and $300,000 per year, but those numbers varied between the three sessions.

“People at the last mini work session said that it might be worthwhile to have one more work session as a whole to focus on that part,” Grace said. “I thought that wouldn’t necessarily be a bad idea.”

Grace told the Herald last week that everything is up in the air until the city council approves it.

Based on figures provided by the city, if the city plans for $300,000 in capital improvements, customers who use 2,000 gallons of water will see an increase of $12.98 per month, while customers who use 4,000 gallons would see an increase of $21.96 per month.

If the city were to budget for $210,000 in capital improvements, residents using 2,000 gallons of water would see an increase of $9.69 per month, while customers who use 4,000 gallons would see an increase of $16.75 per month.

Grace is also preparing to change the way the city council approves water rate changes. Currently water rates are approved by ordinance, which means it needs to have two readings approved by the city council at separate meetings. The proposed change would be to allow rates to be adjusted by resolution, which would allow rates to be changed at one meeting instead of over the course of two.

The current system gives the public a chance to come in and comment on rate changes before they are made official, but Grace said her intention with changing the way rates are changed is not to try to limit public input.

“Our goal is always going to be as transparent as possible and education is probably the best way to do that,” Grace said when asked about the proposed change Monday night.

She said one of the reasons for the recommendation to change from an ordinance to resolution is that every time the city changes an ordinance, a large amount of work needs be done change bound books and current records, and she said it’s “cleaner and cheaper” to make the approval by resolution.

“My recommendation is always going to be to get the word out as well in advance as possible so that people are aware that this is going to be on the agenda,” she said.

Councilman Mike Jackson suggested it could even be added to the new ordinance that prior to approval of the resolution, the public would need to be notified a certain amount of time in advance.

“I think that would be a wise thing to do,” Grace said.

Again, no changes have been made at this time, and the city council will continue to discuss how to structure rates. However, Grace said last week that currently the city’s rates are not generating enough for the projects it needs to complete to continue maintaining the water and sewer system. One major project is the reconstruction of Houghton Avenue, which city officials expect to happen in 2023. But under the current direction, Grace said the city would not have enough money set aside to pay for that project.

“Without this change, we would have no way to accomplish that,” she said.

She added that if the city cannot show the Michigan Department of Transportation that it has a plan in place to be able to fund the infrastructure improvements in 2023, MDOT would likely remove West Branch from its construction schedule.

“We’ve had to Band-Aid Houghton Avenue for so many years, we can’t afford not to do it,” Jackson said during one of last week’s mini work sessions.

The Herald will continue to report on water rate discussions. Grace said Monday that her proposed plan would be to put the ordinance to allow rates to be changed by resolution on the agenda for this Monday’s city council meeting Sept. 17. If the first reading is approved, the ordinance could be adopted at the next city meeting Oct. 1. However, it would have to published to be put into effect, which means the earliest rates could likely be changed would be at the city’s Oct. 15 meeting.

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