Rate Hikes: Houghton budget analysis of water, sewer funds finds need

HOUGHTON — Houghton’s water and sewer rates could be going up for the first time since 2012.

City manager Eric Waara outlined the proposed rate hikes during a city budget meeting Wednesday. The combined percentage increase is about 9.6 percent.

In sewer, the proposed increase will be from the current $6.54 per 100 cubic feet to $6.82.

Water rates are budgeted to rise from $3.44 per 100 cubic feet to $4.12 per 100 cubic feet, a 19.4 percent increase.

Money from the increases will go toward debt load on the second phase of sewer and water upgrades in the city as part of a USDA Rural Development project.

Last year Houghton received $2.25 million in loans and $1.5 million in grants for improvements in the systems, which date to the early 1900s.

The sewer rate would be raised sometime before July 2020. The water rate will be raised about halfway through the fiscal year, as the rate increase has to be in place prior to the loan.

“In this case, water’s all loan, because our rates are so low,” city manager Eric Waara said.

Over the past year, residential sewer and water use has declined slightly, Waara said. The cause was unclear, but rainy weather last summer may have meant people spent less time watering plants, Waara said.

Use at Michigan Technological University has also been tracking down over the past few years, Waara said. Meter readings have not followed a clear pattern, he said.

“We’ve been able to narrow it down to a couple of meters, potentially,” he said. “Hopefully we’ll be able to track that down over the coming year.”

The sewer fund will also receive Tax Increment Financing funds for the leachate collection system by Huron Creek. Destroyed in the 2018 flood, its repair has been budgeted for by the Federal Emergency Management Agency. However, repair this year is unlikely, Waara said.

The city will also do another larger project this year on Ruby or Prospect streets.

“We’ll have to look at this holistically with water, roads, sewer — where do we need to spend these dollars the most,” Waara said.

Treatment costs at the Portage Lake Water and Sewer Authority have been tracking down, Waara said.