TRAVERSE CITY -- Residents of several local townships who are connected to water and sewer systems will pay higher rates, due in part to the failing state and national economy.
Officials in one township in Grand Traverse County, in fact, are prepared to boost rates 46 percent to cover debt payments and rising operational costs.
East Bay Township residents were hit by a rate increase in October and soon will suffer a double-whammy. The township board increased the monthly base sewer rate by $4 to $21.50 and the water rate by $6 to $19 per month.
Both increases take affect Jan. 1. Rates then will automatically rise by 3.5 percent a year.
"It's hard to raise rates on people with the economy what it is, but you've got to do what you've got to do," said East Bay Township Supervisor Glen Lile.
The township's water and sewer funds would lose an estimated $470,000 in 2009 without the immediate increases. But even with those hikes, the funds are expected to fall short $265,000, though it should come close to breaking even in 2010.
The problem, Lile said, is that there aren't enough new homes and businesses hooking into the system. Those new users pay a one-time benefit fee of $3,900 per hookup. That fee is used to retire debt from the installation of water and sewer mains, wells, tanks, pumping stations and treatment plants.
The township estimated it would receive at least 100 water and 100 sewer benefit fees a year to help cover about $860,000 a year in debt payments. In 2006 it had 105 new sewer users, but by 2008 the number had dropped to 23. The water system went from 83 hook-ups in 2006 to 26 this year.
"Nobody ever anticipated growth to drop off like it has," Lile said.
In Acme Township, residents recently saw rates jump from $25 to $30 a month for sewer.
"We have no fund equity, and if you look at cash flow we were going to run out in 2011," said Acme Township Supervisor Wayne Kladder. "We factored in five benefit fees for the whole year, and if that increases maybe we can lower rates."
Several other local townships made adjustments last year. Elmwood Township sewer users faced rate increases of about 90 percent in 2007 to $28 a month. Its rate isn't scheduled to rise in 2009.
Garfield Township adopted automatic increases last year, so residential sewer bills will go from $19 to $19.70 and water will jump from $10.35 to $11.50 a month.
Peninsula Township residents can expect to see their water bills increase $1 to $22 a month Jan. 1 to pay for a new water tank, but sewer rates won't change.
Traverse City's new budget year doesn't begin until July 1, so city officials won't look at water and sewer rates until the spring, said city department of public services Director Bob Cole.
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