Silver Bay water plan draws a crowd

Talk about it

Water rate changes will be occurring for some businesses in Silver Bay June 1, an issue that brought residents to a public hearing Monday at city hall.

City Administrator Lana Fralich said the city has to make the changes to be in compliance with new state water conservation rules by 2013.

What the city plans to do to combat the change it to raise the amount that businesses pay after reaching a base amount of 3,000 gallons – it’s currently 2,000 gallons.

Right now, if a business goes over 2,000 gallons, it pays about 25 percent of what a gallon costs during the initial usage. When the switch occurs, it will pay the same per gallon as they were during the initial first 3,000 gallons. Residential units will not be affected.

Silver Bay is struggling to keep up with maintenance for its facilities. The rate increases could mean a revenue increase of about $200,000 for both water and sewer charges for the biggest users in the city.

Fralich said about 50 percent of businesses will be affected by the change, most notably Northshore Mining.

“We’re going to have one flat rate throughout the city,” Fralich said.

“Why commercial rates only?” asked Bernie Zupancich, owner of the Zup’s grocery store in Silver Bay. He said the new rate changes could hurt new businesses from coming to the city. “Business people are hurting. Everything keeps going, up, up, up.”

Mike Miller, supervisor for water and sewer in Silver Bay, said 50 percent of businesses will not see a rate change and some may be paying less as the threshold goes to 3,000 gallons.

Some in the crowd asked why the city hasn’t gone to meters for residences. Mayor Scott Johnson said the city has looked at that before and it would cost about $600 apiece if meters were installed.

He said the city was pretty sensitive to adding more expenses for residents.

The city has had trouble getting funding to fix water and sewer infrastructure in the past because rates have been kept relatively low. Residents pay about $64 a month for water and sewer combined.

Miller said when compared to other cities in the region, the rate is low.

Council member Dave Gustafson said Reserve Mining originally installed the infrastructure for the city in the 1950s, which kept costs low for residents. Now, as the equipment begins to breakdown, the city needs to pay for it.

“Rate raising isn’t new in our community,” council member Carlene Perfetto said. She said rates for residents have gone up in recent years while they haven’t for businesses.

Other water conservation plans include limiting the amount of time residents can water their lawns, which, at some point, may be monitored by the Silver Bay Police Department.

Eco-park

The council approved a request for a proposal from LHB for the engineering and construction of the bioenergy facility greenhouse with money the city received from the State Legislature. The council also approved a proposal from Northland Securities to be the overall financial advisor for the eco-park. Money to pay for that group will also come out of legislative money the city has received in the past.

Fralich said construction for the eco-park project could begin this summer. On May 10, there will be a special election on the project.

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