Water, sewer rate hikes beatenPublished 9:53pm Monday, August 9, 2010
By JOHN EBY
Dowagiac Daily News
Dowagiac CIty Council’s First Ward representatives, Lori Hunt and Junior Oliver, Monday night voted against proposed water/sewer rate ordinance amendments that would cost an average customer $7 a month.
Combined with the absence of Third Ward Councilman Dr. Charles Burling, the 3-2 margin meant the increase lost.
City Manager Kevin Anderson said at first reading July 26 it has been two years since the city last reviewed water and sewer rates.
Since then, there have been “a number of factors that impact rates, including a decline in consumption as well as some increases in cost for labor utilities and supplies. Since much of the cost of operating water and sewer systems are fixed costs, both factors act to increase the rate necessary to provide these vital services.”
City customers are responsible for a portion of the cost to operate the wastewater treatment plant based on cost-sharing formulas in agreements with the Village of Cassopolis and the Indian Lake and Sister Lakes Sewer Authorities.
The city is also responsible for the cost of maintaining lift stations within Dowagiac.
Based on projected costs, use and consumption, the utility needs to generate about $3.50 per resident equivalent unit per month to provide sewer service to city residents.
Larger meters within the system pay a proportionately larger cost.
In total, the sewer rate increase was counted on to generate about $104,000 in new revenue.
For at least a decade, revenues derived from leases for cell towers subsidized community water rates.
These cell tower leases amount to about $50,000 per year, or $2.50 per typical household customer.
The 2010-11 budget taking effect Oct. 1 calls for the subsidy to end and all money from cell tower leases to be redirected to the capital projects fund so road improvements could be made throughout the city.
Additionally, in the two years since the last rate boost, water use dropped.
Since most of the cost of the water utility is fixed, rates need adjustment to maintain current operations. In total, rate increases for the water utility will be $97,000 per year. Typical residential household use can expect to translate into about a $3.50 per month average increase in water cost.
“There are no plans for increases to electric rates this year,” Anderson stated.
A typical combined water, sewer and electric bill for a residential customer currently runs $115 to $125 per month, he said.
Rate increases would have taken effect with September bills.