2005-05-27 / Top News

Water Rates To Go Up 50%

By Karen Gould

Mackinac Island residents will see a 50 percent increase in water and sewer usage rates with the next bill they pull out of their mailbox. The City Council voted Wednesday, May 25, to make the first increase effective immediately, with an additional 50 percent increase next year, and a 25 percent increase for the third year.

The commodity water charge, which is based on the amount of water used, will rise this year from $1.25 per 1,000 gallons to $1.88, while the commodity sewer charge will increase from $2.25 per 1,000 gallons to $3.38.

Next year, water rates will increase to $2.81 per 1,000 gallons and sewer rise to $5.06, and in 2007, water will increase to $3.52 and sewer go up to $6.33 per 1,000 gallons. The rates in 2007 will be about 181 percent above the current rates.

Each rate jump will be effective May 26 of 2005, 2006, and 2007.

Bruce Zimmerman, director of the city’s Department of Public Works (DPW), said the new rate increase will not affect the readiness to serve flat rate.

Mr. Zimmerman forewarned Council of the increase in March, when he announced the city needs to make up a budget deficit that reached $1.2 million in the last two years. He said then that the increased rates will be used to eliminate that annual operation deficit, which is projected to happen around 2008 or 2009, and to build a capital improvement fund for future repairs and improvements. The rate increases, he said then, will not be used to expand the water or wastewater treatment capacity.

Over the next 10 years, Mr. Zimmerman projects that additional rate increases could provide the city with a public works capital improvement fund of $1.5 million, although City Council opted to increase the rates over just a three-year period and review the matter in three years.

Mr. Zimmerman said the Board of Public Works had previously thought it could borrow money needed for repairs, if necessary, but that the auditors had suggested a fund balance be in place to cover unexpected expenses.

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