Muskegon’s Water System To See 10% Base Rate Increase Starting July 1, 2012

Andrew Trzaska | March 27, 2012

If you get your water from the City of Muskegon, you will be seeing a 10% water rate increase starting in July.

Muskegon’s City Commission voted 5-0 to approve an increase of their system’s base water rate from $1.40 per one hundred cubic feet (HCFT) to $1.54/HCFT.  One hundred cubic feet equals 748 gallons of water.

Documents obtained from the city indicated that water usage has dropped over the past several years but costs to run the water system have increased. These costs include labor, electricity and the chemicals used to treat the water.

City water rates were last increased on January 1, 2005. The city’s water fund lost a net $330,504 in the 2011 fiscal year alone, capping three years of losses with a possible fourth in 2012.

Municipalities that get their water from Muskegon will all receive the increase. The cost of water service is separate from sewer rates, which are controlled by the shared county water system.  This includes Roosevelt Park, who just signed a new long-term contract with the city, as well as North Muskegon and a consortium that includes Muskegon, Laketon, Fruitland and Dalton Townships. Each group has a different rate, so the $1.54 number is just the starting benchmark for how each individual rate will be set.

Former city finance director Tim Paul, who has come back on with the city on a temporary basis, suggested that the city had waited a long time to do the rate increases:

“We raise water rates very cautiously,” said Paul. “It’s been seven years and it was time.”

Paul indicated that the city’s water fund may have gone into deficit spending next year if the rate increase did not pass.

Mayor Steve Warmington and Commissioner Sue Wierengo were not present at Tuesday’s meeting and therefore did not vote on the matter.

Water rates have been a hot topic across the county in the recent years.

Starting in January of 2011, the City of Muskegon Heights raised water rates on its customers to $1.42 per 1000 gallons..  In the following months, its customers outside of city limits, Fruitport and Norton Shores both protested and looked to switch providers.  Discussion of a new third water system in the county rose from those discussions last year, though no concrete action has been taken.

Also proposed by the City of Muskegon last year was the unification of Muskegon Heights’ and Muskegon’s water systems, which would be run by Muskegon.  With reservations about their city’s ability to generate revenue long term without control of the water system, Muskegon Heights did not sign onto the plan last summer. Other municipalities were mixed in their support of the initiative as well.  Muskegon withdrew their water proposal in October.

Alongside the rise of water rates, Muskegon County has raised sewer rates by over 20%. Because this is charged to each municipality connected to the system and not directly to individuals or businesses, cities mostly passed this cost onto their customers. Reasons for the increase were similar; the countywide wastewater system has fewer customers now than it did a decade ago, while costs have increased.