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ALPENA -- Water and sewer customers in Alpena Township will be paying more for service after the Board of Trustees voted on Monday to raise rates.
Rates will increase from a minimum quarterly bill of $161.41, to $170.44. The bill also includes a $5 infiltration change and a $5 administration billing charge. The township charges customers for a minimum of 7,000 gallons of water whether they use less than that amount or not.
The township says rising costs, the need for more investment in infrastructure, and a 2.08% rate hike by the City of Alpena, has made raising rates to township customers necessary.
Township Supervisor Nathan Skibbe said the township has seen an increase of 30% in materials and labor costs. He said the price tag of future water and sewer system improvements outlined in the Capital Improvement Plan is also factored into the rate hikes.
"To align with increasing costs within the enterprise fund, water fund, the township board of trustees needs to increase the water and sewer rates to be able to provide the services that the infrastructure needs," Skibbe said in a statement.
Skibbe presented the board several options to consider. One was what a 3% rate increase would cost customers, as well what the fees would look like when boosted in 1% intervals up to 7%.
The board voted 5-0 to increase rates 6%, which will begin to show up on customer's bills in the October billing cycle.
Skibbe, along with trustees Steve Lappan, Laura Ellery-Somers, Russ Rhynard, and Norm Poli voted to raise the rates. Trustees Michele Palevich and Cash Kroll were not at the meeting.
The cost of maintaining and repairing its water system has been costly for the township the last two years.
A rash of service-line breaks and other unexpected water system repairs in 2021 and 2022, has caused Alpena Township to spend $410,480 more than what it had budgeted for. The township allocated $250,000 as a maintenance allowance for its water services contractor F&V Operations, but costly repairs pushed the expenditures to at least $660,480.
Skibbe cited the age of the system and the material the service lines are made of as factors in the pipes breaking.
Skibbe said it is impossible to anticipate how many more service lines will need to be replaced in the coming months, but he added the board of trustees has allocated more than $100,000 more to F&V for repairs and maintenance for the next year.
The township is awaiting word on a $15.8 million, 40-year loan from the state that would allow the township to replace all of its service lines. If approved, the money for the loan would come from the state's Drinking Water State Revolving Fund. Skibbe said if the loan is approved, all of the service lines in the township will be replaced.
"A total of $13.1 million of it will go into changing all of the lines," he said earlier this month.
Skibbe said the State could sign off on the loan in the fall, but until system wide works begin, there could be more unexpected line breaks, and the township needs to be able to pay for them and the other increased expenses.