Fennville residents could see a lower increase in water rates after the city commission June 3 decided to wait for a change in state regulations and possible grants to pay to remove lead water pipes, reports Commercial Record correspondent Jim Hayden in his Bicycle Base Fennville blog.
A public hearing on the 2019-2020 city budget that includes new water rates will be Monday, June 17, in city hall, 222 S. Maple St., at 7 p.m.
The commission, of which Hayden is a member, voted 6-1 to increase water rates 3 percent instead of the planned 8 percent recommended by the city’s financial planners.
“There are too many unknowns to put out 8 percent,” said Commissioner Danielle Brien. Though 8 percent is not a lot in dollars, she said, “add it all together, that’s a lot.”
An 8-percent increase would have meant homeowners on average would pay about $1.20 more a month ($3.59 a quarter) for water services. The 3-percent proposal means a customer will pay about $0.45 a month ($1.34 a quarter), according to city figures.
Brien recommended the city use some of its $345,000 fund balance in the water budget to pay for any lead pipe expenses.
The replacement could cost $75,000 a year or $300,000 over the planned four-year period for the 8-percent increase.
Commissioner Hayden voted against the 3-percent raise, supporting the 8-percent increase, saying city planners recommended that number to cover the state mandate that the city pay for the replacement of any lead water lines on private property. The fund balance is needed to cover emergencies such as a major water line break, he said.
The city is receiving a $1.16 million loan from the U.S. Department of Agriculture to improve the water system including water mains and well work. Part of the work might require the city to replace lead or galvanized water lines that are on private property after a recent decision by the state Department of Environmental Quality, now known as the Michigan Department of Environment, Great Lakes and Energy.
The city will have to determine the material in the private lines from the public water line to the water meter in the house. If there is no paper record of the private pipe’s material, the city will have to inspect the line in the house or actually dig down to the line to examine it. There will be no cost to the homeowner – the city will pay the entire bill.
Of the city’s 626 water users, about 30 percent, or 188, need to be verified, according to city engineers.
That verification can be done when the city replaces its current water meters with new devices as part of the USDA loan, according to City Administrator Amanda Morgan.
The 8-percent increase was presented to the city in May by Umbaugh & Associates of East Lansing, the city’s financial consultant for the bond.
“I think we need more information before we do that,” Brien said about an 8 percent increase.
The order to replace lead lines on private property is being challenged in the legislature, so commissioners said they would wait for the state to make changes to the rule and supply grants for municipalities to pay for the work.
“Budgeting for something that may or may not happen is not good for the public,” said Mayor Tom Pantelleria.
The 8-percent increase was figured into the proposed 2019-2020 budget so a new budget will be ready before the public hearing.