The Lansing City Council could soon be making changes that will impact nearly all residents of the city.
In a study session, the council heard the results of a wastewater service rate study conducted by the firm Professional Engineering Consultants. The study, overseen by a committee that included city staff and council members, was a sort of sequel to a 2007 study that resulted in the current rate structure, also from PEC.
That study tied rate increases to growth in the city, predicting that as long as at least 40 houses were built and brought onto the system each year, the city would be able to eventually stop general fund transfers into the wastewater fund and the operation could become self-sufficient.
Those general fund transfers are still occurring, most recently to the tune of about $300,000 a year according to city officials, because of the extent to which growth in housing slowed since the current rate schedule was approved in 2009.
The new proposal, according to Alex Darby of PEC, would take into account 3 percent inflation per year and 1 percent growth, still in the hopes of weaning the wastewater department off of those general funds.
“By 2017, there’s zero tax transfer,” he said.
It would also allow the city the revenue to make improvements and rehabilitate its current sewer infrastructure and develop a wastewater master plan. In a “report card” on current operations, PEC’s Jim Martin said the city does well with service and operations. But he said inspection and rehabilitation of the current system and funding for future planning and capital projects needs improvement.
“It’s purely on a reactionary basis,” Darby said of current maintenance efforts. “If something breaks, you got to fix it.”
Under the current plan, the monthly base rate for residential customers is $12. The rate per unit, defined as 750 gallons of wastewater, is $3. In 2013, the base rate would stay the same if the council does not change the current rate structure, though the per unit cost would increase to $3.75.
But if the council does adopt the plan as outlined by PEC, the base rate would increase in 2013 to $13.25 and the per unit rate would increase to $3.85. The base rate would then increase by $1.25 and the per unit costs would increase by 45 cents each year thereafter until 2017. Commercial base rates would also increase at roughly the same rate, the base rate beginning at $15.25 per month and the per unit cost starting at $4.
Another plank in the plan is for the city to renegotiate the rate that Lansing Correctional Facility pays the city for its wastewater treatment. Martin said the city should try to bring LCF’s rate closer to actual cost. The wastewater from the facility makes up about 32.9 percent of actual flow. But the “organic solids” coming out of the facility make up almost 74 percent of the total handled at the city’s wastewater treatment plant, meaning that the wastewater coming from LCF is, in general, more costly to treat.
Page 2 of 2 - “Every gallon, every pound translates into dollars,” Martin said.
Mayor Ken Bernard said as soon as the council approves the completed ordinance, he would attempt to renegotiate the rate with LCF.