Leelanau News and Events

Substantial Water Rate Hikes Proposed in Northport

By Art Bukowski | Sept. 11, 2024

Water rates in Northport could roughly double over the next five years to support significant infrastructure upgrades there, according to a consultant’s report, though the village council has yet to make a decision on any rate hikes.

The council on Thursday is expected to discuss a study completed by Holland-based Utility Financial Solutions, which specializes in detailed financial planning for electric, water, wastewater and other utilities for a variety of clients.

The study proposes rate hikes of 20 percent for each of the years from 2025 to 2028 and then 10 percent in 2029. The increased revenue would help the village pay off about $1.3 million in debt connected to a pair of bond issues.

Those bonds would allow the village to pay for major upgrades to its water system, Village Manager Jim Dyer says. The work would happen over the next several years.

“The main concern we have is Northport has a lot of aging infrastructure. Some of the water mains that we have in this town are between 75 and 90 years old, and we've got at least one valve that we know in Nagonaba Street that has a slow leak,” Dyer tells The Ticker. “These things are going to need attention.”

The village raised rates only once over the past decade or so, Dyer said, without any studies done. It’s set up a situation in which there’s not nearly enough in the kitty to fund significant repairs or upgrades to the village’s dated system.

“The last thing I want to do is disparage what someone has done in the past, but the problem with not doing these types of studies is you’re making decisions without information,” he says. “I’m sure the thinking in the past was that we had a bunch of cash in the water fund and didn’t need to raise rates. But you need to be looking at it from the perspective of: How much cash do we (actually) need?”

The study offers suggestions but is not binding without council action. There’s no question that rates will have to go up, but there are several ways in which rate hikes or bonds may be handled.

“We could do a 100% increase right now and sort of rip the Band-Aid off, and maybe in two or three years we could lower rates because we've done better than we thought we could do,” Dyer says. “But I don't think that that's fair to the public, so the suggestion is to do it in stages like this.”

The council on Thursday (7 p.m. at the village offices) will hear a presentation from Utility Financial Solutions Vice President Dawn Lund. Dyer says rate hikes could take effect as soon as this fall, though he doesn’t expect a decision to be made this week.

Village Council President Chris McCann says the village implemented sewer rate hikes not long ago based on a study from the same firm, which the village trusts. Like Dyer, he says years of relative inaction by the village has created a situation in which action needs to be taken.

“Sometimes you put things off and you put things off, but then things come to a head,” he says. “You’ve got to look at reality and say, ‘This is where we’re at.”

And the longer the village waits, McCann says, the more costly repairs and upgrades might become.

“The project that was $30,000 three years ago is $50,000 now,” he says. “You say ‘Well, we’ll get to it next year,’ but then it becomes a couple of years and the cost has doubled.”

McCann encourages the public to come to Thursday’s meeting.

“As much as we have confidence in the work (UFS has) produced, I also think it's important to make sure that the public has an option to view this and provide us with some feedback,” he says. “Hopefully they’ll attend and hear what Dawn has to say because she will be very informative about why the numbers are what they are.”

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