NILES —  Residents across Niles, Niles Township, Howard and Bertrand Township are about to see increases across the board on their utility services, after members of the Niles City Council voted 7-1 Monday night to approve adjustments. 

Starting in October, Niles customers will pay a 2.5-percent increase in electric, a 5.9-percent increase in water and 4.9-percent increase in wastewater. For Niles customers, this means the cost of service charge for electric, water and sewer will be $43.50 per month — a $4 raise. Residents in Niles Township, Howard Township and Bertrand Township will also see adjustments:

• Niles Township — wastewater: .5 percent increase; wholesale wastewater: 16 percent – due to the fact that rates have not increased since 2013.

• Howard Township — wastewater increase of 3.8 percent.

• Bertrand Township — wastewater increase of 4.2 percent.

Utilities Manager Jeff Dunlap said the department is profitable and operating in “the black,” but the adjustments are necessary to keep it that way.

The rates were determined as a result of a cost of service study conducted by Utility Financial Solutions – a company that performs studies of this variety for utility departments across the country. 

On Monday night city council members listened to Dawn Lund, the vice president for Utility Financial Solutions, present the results of that study. Lund conducted financial studies for the electric and wastewater departments. She provided recommendations for rate adjustment amounts based on her findings. While city council members were only voting on adjustments for the next year, she said she recommended that council members continue to approve the same rate adjustment every year for the next five years.

The adjustments are necessary to fund continued maintenance on infrastructure, provide adequate cash reserves, operating income, debt service and funds for capital improvement projects, city officials said. But not all council members felt the recommendations were justified.

Council member Daniel VandenHeede, who voted against the rate adjustments, said he thought a base charge of $43.50 a month was asking too much of residents.

“I understand the idea of fixed costs, but we have been increasing that I think out of proportion for years now,” VandenHeede said. “This will disproportionately affect our small users. We really should be cognizant of our residents, especially our lower income residents … this is going to affect them more than the big users.”

But Lund said raising the cost of service charge so customers pay a uniform rate could balance out the rate of kilowatts per hour. While Lund said it depends on the city, she said studies show that low income users typically use more electricity than the average users. She said this is because they might not have the resources for energy saving appliances. Therefore, she said having a base rate that is too low could actually harm low income users.

“If we roll fixed cost recovery into the variable component [the kilowatts per hour] and our low-income customer uses more than average, we could actually harm low income customer,” Lund said.

The city also outlined several pressing needs that will call for more funding, including the purchase power demand from AEP increasing by 4.6 percent as of June 1; completion of the 12 KV voltage conversion projects, which cost the city about $1 million; as well as costs for the implementation for potentially migrating contaminants; state lead service line replacement requirements; updated EPA requirements and sanitary and sewer upgrades. However, Dunlap said these needs are only a portion of why the city needs to adjust rates.

“From a manager’s standpoint, if we look at nothing more than the cost of living increases, we have to keep up with inflation,” Dunlap said.