Questions raised on water and sewer increases
by Peter Jakey–Managing Editor
There was some public backlash at the most recent Rogers City Council meeting, in the wake of water and sewer rate increases earlier this month.
And, based on new information, the city will back off on water increases which were to take place Aug. 1. A public hearing is set for Aug. 6 to discuss the details of a planned increase, which will not be as high as originally stated.
According to mayor Beach Hall, a Tuesday afternoon meeting between city staff and the consulting firm hired by the city revealed the proposed rate increase would bring in more revenue than budgeted, prompting the public hearing.
“There will be an increase, but not as much as originally announced,” Hall told the Advance Wednesday morning.
At its last meeting, council decided against increases based on pipe size, and spared the city’s larger consumers. Instead, they approved capital and billing rates to $46.84 for residential and business customers. Apartment dwellers would have been hit with the largest increase from $10 to $35.51, but that does not include commodity use.
As part of what mayor Beach Hall called a “compromise,” council agreed to conduct a public hearing with a representative of Michigan Rural Water Association (MRWA), who assisted the city in a rate study last spring.
The Aug. 6 informational hearing was sparked after one resident came before council with some questions about the numbers, while a public official has concerns about what the impact would be on Hilltop Manor.
Rogers City Housing Commission’s executive director Sally Goupell, who manages Hilltop, said the increases, which now may be reduced, would be devastating. “I don’t use the word lightly, but it is absolutely devastating.” Goupell sets rent amounts based on federal guidelines.
“I can’t charge somebody what I think they should pay,” said Goupell. The complex has some occupants that pay $50 a month. Goupell said each apartment costs $409 to maintain, while the average rent is in the low $300s. She added that the average income is $14,000 a year.
“So, I don’t make enough in rents to cover my expenses, and I get subsidies,” Goupell continued. “You know the government, they don’t have any money. In 2011, I took a 34 percent decrease in operating subsidy. In 2012, they cut my subsidy in half so that we would spend most of our reserves, over $100,000. My reserves are now under $100,000.”
Goupell said water and sewer rates were less than $300 a month, or less in 2010.
“Now, I am told my fees will be going up to $1,330. Plus, my water,” said Goupell. “I am not kidding when I tell you things are going to be desperate for us. I’m going to end up using our reserve. I am going to get dinged by HUD (Department of Housing and Urban Development) for that because my reserves will be too low, and then I will get hit again.”
Goupell said she cannot put one penny of the increases on residents. “I cannot tell them to not flush the toilet. They are very frugal the way it is. This is a generation that was extremely frugal.”
Additionally, Goupell said if Hilltop closes “we’ll never get it back. It is the only building like this in Presque Isle County. We are public housing. Once it is gone, HUD is never going to give it back. And the population it serves are grandmothers, mothers, fathers – people of very low income.”
If Hilltop Manor closes, she believes 60 percent of her residents will end up at Tendercare, because they cannot live on their own.
Goupell suggested the board “burn the midnight oil” to come up with better options. “It is a desperate situation for us. If I could, I would drill a well and put a septic tank in up there,” said Goupell. She knows it is prohibited, but jokingly said the city limits should be moved.
A.J. Przybyla spoke during the citizen comment period and wanted to know why there was an increase for home residents with three-quarter inch pipe from a “nominal” 6 percent increase to 18 percent. It went from a $2.26 increase to $7.90.
Przybyla obtained a copy of the budget and came up with his own calculations and concluded that was an increase in revenue of $198,262. After MRWA reworked the figures for Tuesday’s meeting with city staffers, the proposed increases were deemed to be too high.
In June, Przybyla said the budget called for an $18,246 increase for the water fund and $105,905 for sewer, “which is $124,151 of additional revenue from 2012-13 to the 13-14 budget.”
With council’s departure from saddling larger customers, he said there was a shortfall of $26,000.
“But the residential customers, the main majority of Rogers City, went up $7.90 additional. So, that’s an additional $10,200 per month, and $122,345 a year, more revenue,” said Przybyla.
“I really would like
“I think it is important that we see what the numbers are, in a format that everyone can understand what happens,” Slown said at the council meeting.
Tuesday’s meeting with MRWA came about after councilman Dana LaBar asked Przybyla to meet with city manager Mark Slown to go over the numbers.
After recalculating, those numbers appear to have indeed changed, but not the way the city manager first thought.
The Aug. 6 meeting will take place before the regularly scheduled meeting of the city council.