Ely Township doubles water rates in Diorite

Move made for 70 customers to meet rising costs

DIORITE — Water bills for some customers in Ely Township will more than double in the next month.

The Ely Township Board at its June 20 meeting voted to raise water rates from $43 per month to $90 per month for nearly 70 customers served by the Diorite well near Boston Lake.

A recent economic study on that portion of the township water system showed the cost to serve each customer on the Diorite system was around $77, Ely Township Supervisor Bryan Johnson said in a June 21 phone interview.

“In order to get where we were breaking even, we would have to raise it to $77, so the board decided to add the other $13 to make it $90 so we can afford to make improvements,” Johnson said.

Township officials outlined the problems in a May 22 letter to customers. The issues include additional expenses due to changes in the way water from the system needs to be treated and tested, and the anticipated $100,000 cost of drilling a new backup well to meet capacity needs under Michigan Department of Environmental Quality guidelines.

“DEQ requirements state that the system must have the ability to pump water for the highest daily total for the previous year, as well as a backup system in case of failure of the primary system,” the letter states.

Johnson said the public hearing prior to the board decision was well attended with several people speaking out against the increase.

“Believe me, to make that decision — the board was not at all happy about it, but they had to do it to maintain control (of the system),” Johnson said. “We are making an effort to make it go back the other way.”

In a letter to The Mining Journal, Diorite Water Project Committee spokesman Jeremy Laakso called the situation a “financial emergency” for the residents of Diorite.

“Diorite is home to many retired and elderly residents on fixed incomes, along with several low-income families,” Laakso’s letter states. “It’s difficult enough for many residents to pay their water bill before the increase, but now some may be in danger of having their water shut off because of the increased expense.”

The remaining municipal water customers in the township are served by a well in Greenwood location, Johnson said, but the treatment of water from that system has not been required to change, so the cost for those customers is not likely to rise.

Results of the most recent Upper Peninsula water rate survey conducted by the DEQ indicated that water rates for the 130 customers served by the Greenwood well was $31 per 5,000 gallons, DEQ U.P. District Supervisor Chuck Thomas said during a phone interview Tuesday.

Ely Township water customers on both systems pay a flat monthly rate for water service, Johnson said, as meters are not used. Each water source, by law, has its own separate funding mechanism, so funds from the Greenwood system cannot be used for the Diorite system.

Thomas said changes in the way water from the Diorite well field was treated were necessary after it was determined that the passive treatment system, which filtered the water through limestone to adjust the pH levels and reduce its corrosiveness, was no longer working.

“The water quality issue in the Ely Township Diorite water is the mineral quality is very corrosive,” Thomas said. “There was never a problem with the safety of the water itself, but it would leach the copper out of the pipes in Diorite.”

The presence of too much copper in drinking water can exacerbate an existing health condition called Wilson’s disease. Copper isn’t eliminated properly with the condition, and instead accumulates. Long-term exposure can cause liver or kidney damage, according to the Mayo Clinic website.

Between the changes to the water treatment — which required the township to purchase the appropriate chemicals and set up mix tanks in the well house — and the increased price of testing water, the township was forced into raising the rates on the Diorite system, Johnson said.

“We spent a bunch of money doing those upgrades and stuff,” Johnson said. “And they made us — once the first chemical change didn’t work — they made us go for a second one. On top of that, you are paying a whole lot of shipping stuff. Now we are down low in terms of how funds go, and we are making an effort to make it go back the other way.”

Johnson didn’t specify how much money was in the Diorite water system fund.

Thomas said the DEQ has been working with the township to improve its firm capacity, which means ensuring the adequate production capability of each respective part of the waterworks system if the largest well, pump or treatment unit are out of service.

“The capacity of their well field keeps going down,” Thomas said.

Johnson said the financial issue was exacerbated by rates that were kept artificially low.

“It wouldn’t be so bad if the rates had kept up with what was going on,” Johnson said. “Those expenses have crept up really fast, and then our water guy did a bunch of expenses and what it would cost for us to produce that water and it was up to $70 — and we were charging $43 per month.”

Prior to the increase, Thomas said Ely Township water rates were very close to the U.P. average and less than the federal guideline stating that water rates should equal 1.5 percent of the municipality’s median household income.

The township also needs to come up with funding for the backup well in the Diorite location, which is another reason for the increase.

Two wells currently provide Diorite customers with water, the May 22 letter to township residents states, but the oldest of wells is only capable of pumping about 14,400 gallons per day.

“With the recent leaks in our system, we have been as high as 35,000 gallons per day,” the letter states. “The DEQ is requiring that we add an additional well so that the system can supply an adequate amount of water for all customers.”

In a phone interview on Tuesday, Laakso said those leaks could have caused usage on the Diorite system to appear artificially high.

“How many gallons do we use now that the water leaks have been fixed?” Laakso said. “It’s not adding up. The neglect of the system has caused this and now the burden is on the 69 houses in Diorite.”

A June 25 letter from the township board to Diorite water customers states that the decision to raise the rates came after gathering information and months of deliberation.

“Please be assured that efforts will be on-going in attempting to find some type of relief such as grant, loans, and contacting our legislators,” the letter states. “Now that we have a monthly rate that meets our expenses, we are hoping we will have a better chance of being listened to.”

Thomas said the prevailing public perception is that water should be free because it is plentiful.

“There is a significant cost to building the infrastructure, treating the water and delivering it to their homes,” Thomas said.

Thomas said there are seven townships in the U.P. that use multiple water systems including Ely Township, one of which has a rate disparity similar to Ely.

Johnson said his township is not alone when it comes to utility rates not matching the increasing cost of federal and state requirements on aging infrastructure.

“We are not the only ones” Johnson said.