Saline Considering Increasing Water And Sewage Rates

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Saline has committed to spend millions of dollars on its infrastructure from the wastewater treatment plant straight right through the Covid era to apply to the expansions and modernizations of every piece of municipal infrastructure. But can the city pay for all of this without raising water and sewer rates for its residents? An analysis presented to the Saline City Council in a work meeting late in January suggests that they might not.

“It occurs to me that reality is not just politely tapping at the door to be let in. It is pounding loudly, and I don’t think we can ignore it,” Councilor Jack Ceo said.

To be clear: this work meeting merely discussed the future of rates. No water or sewage rate was actually increased at this meeting. This was simply a discussion of the results for future expenses from the municipal advisory firm Baker Tilly, which has been hired by the city.

“The conclusions reached are very difficult,” Baker Tilly’s Andy Tilly told City Council on January 24. “The reality is that both [water and sewage] systems are going to need to have more revenue to fund them properly.”

American infrastructure has been famously underinvested in for decades. It is only in recent years that a serious attempt to make long overdue investments in bridges, roads, power systems and in Saline’s case, mostly wastewater treatment and fresh water delivery systems. Saline has had to commit tens of millions of dollars to expand its aging wastewater treatment facility due to its increasingly outdated technology and its inadequate size in a growing community.

Water meters come at different sizes throughout the city, and certain buildings are charged according to different measuring rates. According to the rate steady that Tilly presented, the ultimate projected increase would be a raise to $35 per quarter per average household. This would be a rate that would combine $14 per quarter for average water use and $21 for sewer services. After that, there would be a $3 quarterly increase after that until at least 2026.

“It’s not all doom and gloom. There are some opportunities here. One thing I would suggest heavily … is that this is a plan that you can act upon in the next five years. The rate increases are laid out. It needs to be updated within the next two to three years is the bottom line,” Tilly added. “One unknown to keep in mind is the potential money from the federal government, state government, through the ARP act, Investment In Infrastructure Jobs back and then potentially Build Back Better. I don’t play politics. I don’t particularly care one way or another. But we have to take into account that there is potential grant funding now and in the future for these projects.”

While Tilly said that inevitably “rates have to go up”, other funding sources are available, particularly through the state revolving fund, a mechanism the state government uses to help invest in public works. The consultants found that just to run the current system and handle the accumulating debt, there will have to be a quarterly increase of $7 per month per typical utility customer; for the foreseeable future. This is an average because of charges are based on usage.

During a question and answer period from the Council, City Manager Colleen O’Toole said that all proposed rate increases cover the infrastructure upgrades planned over the next six years; including the City’s plan to replace Saline’s water meters and all other capital costs.

“It includes all of our capital improvements planned over the next six years. But it does not include developer contributions, which would offset costs,” O’Toole said.

Again: nothing was settled and no rates were changed at the work meeting. The Council will discuss this at another work meeting starting at 5:30 p.m. on February 7.

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