FERNDALE - Residents and businesses in the city will pay lower water and sewer rates and a higher utility tax, to help Ferndale avoid a deficit in its general fund.
The City Council voted 4-3 on Monday, Oct. 7, to lower the water rate by 5 percent and the sewer rate by 1 percent. The tax on water and sewer, meanwhile, was raised from 61/2 to 9 percent.
Customers will see hardly any change to their bills. The charge on a typical bimonthly bill will be 11 cents less starting on Dec. 30.
The State Auditor's Office in 2012 placed limits on how much of a city's utility revenue can be spent on overhead costs. The change created an additional $160,000 expense to Ferndale's general fund, which pays for many of the city's day-to-day operations.
Council members Jon Mutchler and Keith Olson voted no on the changes because they didn't support a tax increase. Lloyd Zimmerman also voted no. Brent Goodrich, a reliable conservative vote on the council, cast the decisive "yes" vote with Cathy Watson, Mel Hansen and Paul Ingram.
"Although I'm not a fan of raising taxes ... I will be supporting this because I think it's the right thing to do," Goodrich said.
The lower rates are justified, Finance Director Mark Peterson said, because the costs to the utility fund are lower due to the new state rules. The tax increase will restore $125,000 to the general fund. Peterson said he would work to resolve the remaining shortfall "in the next few weeks."
Mutchler's alternative to a utility tax increase, which didn't gain traction at council on Monday, included a pay freeze or smaller raise for city staff, and cutting support for social services such as the Ferndale Food Bank.