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No change to 2019 wastewater rates

Marquette Township Trustee Dave Wiegand asks questions about a proposed wastewater increase in the township’s 2019 budget during a budget work session on Tuesday as Township Clerk Randy Ritari, left, and Township Trustee Pete LaRue look on. The board opted to remove the proposed rate increase from the budget which is expected to be officially adopted at its regular meeting Dec. 4. (Journal photo by Lisa Bowers)

MARQUETTE — A proposed wastewater system capital improvement project will go forward in Marquette Township without corresponding rate increases.

During the board’s final budget work session on Tuesday, the Marquette Township Board asked Department of Public Works Superintendent Kirk Page to recalculate his projected wastewater budget to reflect the estimated $60,000 purchase of a new automatic transfer switch with generator for a lift station, without raising wastewater rates for Marquette Township residents.

Instead of rising to $12.77 per 1,000 gallons, wastewater rates in 2019 would remain at $11.83 per 1,000 gallons under the proposed change.

Board Trustee David Wiegand said a wastewater rate hike was not reasonable with a $1.9 million surplus in the wastewater fund as of the end of October.

“It is difficult to support a rate increase when you have those funds sitting there,” Wiegand said. “If three months operating expenses is (our benchmark), we’ve got a lot more than three months operating expenses in that fund.”

According to a township report, three months of operating expenses for the wastewater fund in 2018 would be $227,338.

Township Manager Randy Girard said the three-month contingency would cover the cost of running the system in the course of normal operations. The fund balance, he said, should also be able to address an unexpected repair or other expense.

“The other piece of the pie that you need to consider, and that depends on your comfort level, is how would you accommodate something happening — in other words, … funds for an unanticipated event,” Girard said. “You can’t be in a position where you can’t provide water and you can’t provide wastewater services … Fire and water and wastewater, those have to be continuously operating.”

He said other municipalities in Marquette County have faced or are facing major rate hikes because they have not built fund balances in those enterprise funds.

“You should have funds in reserve (in case of) those unanticipated events,” Girard said. “I understand that you get stopped in the store and asked, ‘Why are they talking about raising rates when you have $1.2 million in your (wastewater) fund?’ Well, you and I know the situation that the city (of Marquette) is in over the next few years, and Ishpeming and Diorite are up 50 percent. That is because you don’t have adequate reserves to accommodate an unanticipated event.”

A small increase in water rates will take place, board members agreed, in an effort to continue to build the township’s water fund balance.

If the budget and fee schedule are approved at the board’s Dec. 4 meeting, residents’ base rate for water will increase from $7 to $8 and volume rates for water will increase from $8.66 to $8.76 per 1,000 gallons.

The water fund increase will stay in place in order to build up reserves, which have fallen to roughly $437,600 partially as the result of a water project in 2016.

The average three-month operating expense for the township water fund is $181,500, according to the accounting report.

Lisa Bowers can be reached at 906-228-2500, ext. 242.

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