Duluth residents could be tapped to pay significantly more for city water in coming years.
A resolution passed last week by the Duluth Public Utilities Commission lays out a proposal to increase water rates by 4.7 percent annually for the next six years. The compounded effect would be a total rate increase of more than 30 percent over that six-year time span.
Rob Prusak, president of the utilities commission, said Duluth now is paying the price for past periods of rate stagnation.
"In hindsight, we should have been looking hard at the rates every year, not taking five years off here and there," he said.
"I've watched the capital fund just shrink to the point where we're doing maintenance only, instead of going out and trying to improve the system," Prusak said.
ADVERTISEMENT
Eric Shaffer, Duluth's chief engineer of utilities, said that many pipes and other components of the city's water are reaching the end of their useful life cycles.
He said the most durable cast-iron pipe that Duluth installed in the 1880s and 1890s can last for 120 to 130 years, meaning it's now coming due for replacement.
But Shaffer said newer pipe is also failing. He explained that the next-best pipe, installed from 1910-1920, lasts for about a century. Meanwhile, poor-quality pipe installed in the 1960s and '70s has had a life span of just 50 to 60 years. And many of the ductile iron pipes installed in the 1990s were incompatible with the chemistry of Duluth's clay soils, causing them to corrode and fail prematurely.
In order to keep Duluth's water system operating reliably, Shaffer has proposed the city target problem water mains and replace them with new, longer-lived pipe.
"It really all comes down to simple math. If a water main has a life of 100 years, then we need to replace 1 percent of our system every year, so we're on track to replace every water main at the end of its 100-year life," he said.
In a system that encompasses about 430 miles of water mains, that would mean replacing 4.3 miles of pipe each year, rather than the 1 to 2 miles of pipe Shaffer said Duluth has changed out in a typical year.
To accomplish that much work, Shaffer estimates the city water department would need an annual capital budget of $5 million - about double what it has now.
The proposed 4.7 percent rate increase would increase the water department's revenues by about $3.6 million. But Shaffer said much of the water department's budget will continue to be consumed by growing costs of insurance, equipment, materials and labor. In 2016, the city spent nearly $14.7 million operating its water system. The water department is required to operate as a self-sustaining entity, with no support from the general fund or other utilities.
ADVERTISEMENT
On Monday, 4th District City Councilor Howie Hanson expressed alarm at the size of the proposed water rate increases, calling for a task force to explore the rising costs of dealing with the city's aging infrastructure.
"To me, it's a huge issue. It's a big white elephant sitting on the chest of this community. To me, it warrants a task force," he said.
Responding to Hanson's comments, 3rd District Councilor Em Westerlund, who serves on the utility commission, said: "What this resolution does is to basically chart a path forward. So the recommendations in that particular resolution are not set in stone. It's the starting point for a bigger conversation about generating a significant amount of revenue to take care of the long-overdue maintenance of our water utility."
The commission aims to organize community forums in June to discuss the challenges facing the city water department.
But 5th District Councilor Jay Fosle cautioned: "The water and gas guys are great at letting you know that you have failing infrastructure, and they always will need more money. Always. During our lifetimes and the next, they're always going to need more money."
