BELDING — City residents will soon see a rate increase to water/sewer services.
Following a presentation from David Bluhm, division manager of engineering firm Fleis & VandenBrink, the Belding City Council approved a rate increase during Tuesday’s meeting.
The rate increase was originally planned to be set at 3 percent for water services, but that was before the council knew the extent of infrastructure issues with the wastewater collection system and the wastewater treatment plant.
Residents will see a 5.9 percent rate increase for sewer services and a 3 percent increase for water services on their next bill in June. According to Bluhm, an annual 5.9 percent rate increase will help keep the city on track to make improvements to the infrastructure in coming years.
Bluhm was also present at the April 4 council meeting, along with an associate from Fleis & VandenBrink and the vice president of Utility Financial Solutions, to update the council on findings through the 2013 stormwater, asset management and wastewater (SAW) grant, and to discuss financial options for the completion of capital improvement plans.
The impact this will have on the average user, according to the presentation, is roughly $5.21 per quarter or $1.74 per month.
Bluhm returned at Tuesday’s meeting at the request of Mayor Ron Gunderson, as two council members were absent from the last meeting.
Bluhm once again laid out the firm’s findings, rehabilitation plans for the collection system and wastewater treatment plans, as well as capital improvement plans for financing the rehabilitation measures.
According to the presentation, the rate increase is necessary to fill a revenue gap in the city’s budget to bring the debt coverage ratio about 1.0. The SAW grant requires 10 percent of any found revenue gap to be filled within the first three years of issuance of the grant and the remaining gap filled within the following four years.
A 15.4 percent revenue gap was found in the 2017-2018 fiscal year budget and that gap needs to be filled, hence the rate increase. While the rate increase will help alleviate some costs in the immediate future, the longer term capital improvement plans call for more financing than the rate increase will cover. The city will have to seek bonds to finance an improvement project about four years down the road, although Bluhm said it’s difficult to predict when assets will need improvements.
Council members expressed their dismay about the fee increase, but recognized the necessity.
“It just seems like … every year, there’s something,” said Councilman Mike Scheid. “I don’t think we have much choice on this either, but we have to watchour spending on other things, too. I realize we have to have the welfare of the community involved here on the sewer and the water because we have to keep the water so it’s clean. I realize that. We just have to be careful about other things we spend money on … we can’t keep raising everything every year.”
“I don’t know where we can do anymore as far as services,” Gunderson responded. “We’re already stretched out to the point right now, I mean, there are a few things that can be dealt with, but I mean… it’s not that we like to do this. None of us sitting here want to do this but we don’t have a choice.”
In other matters, Denny Craycraft spoke during public comment to update the council on progress for the war memorial. He said he’s recently received an infusion of cash to help reach fundraising goals. A Memorial Day service is in the works and Craycraft said he fully expects to have more than 100 people in attendance.