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Michigan City sanitary board approves rates resolution, sends two‑phase increase and impact fees to city council
Summary
The Michigan City Sanitary District board voted July 9 to recommend a two‑phase sewer rate increase, a 14.5% surcharge for accounts outside city limits and new system development charges; staff said the first phase would raise roughly $3.8 million annually and add about $9 to the average monthly bill.
The Michigan City Sanitary District board on July 9 approved a resolution recommending a two‑phase increase to sewer rates and a new schedule of system development charges and sent the measure to the City Council for final action.
Wendy, sanitary district staff, told the board the district has not adjusted rates in more than a decade and faces mounting operating costs and aging infrastructure. She described the proposal as a two‑phase plan, with the initial phase effective Sept. 1, 2026 (showing on bills in October 2026) and a second phase effective Jan. 1, 2028.
"It's approximately, for your average user, about $9 a month," Wendy said of the first phase, adding that both phases together amount to "a little less than $20 total for both phases." Staff said the two‑phase rollout would generate about $3,800,000 in additional annual revenue to support engineering, planning and short‑term capital needs.
The resolution includes three exhibits: current user rates (exhibit A), system development charges for new construction (exhibit B) and application and inspection fees (exhibit C). Wendy explained system development charges are new for Michigan City and used a theoretical example showing roughly $3,000 per single‑family home and $7,500 for certain multifamily meters to illustrate how the charge would work.
The proposal would also apply a 14.5% surcharge to customers located outside Michigan City's corporate limits, a change staff said aligns with state policy. "Why are we paying the extra 14 and a half percent? That seems unfair," said Bill Newton, a Trail Creek resident, during public comment, reflecting concern voiced by several speakers about equity between in‑city and outside customers.
Supporters at the hearing argued deferred maintenance and rising costs require action. "We've had 30% inflation since 2019; you can't expect to keep rates unchanged," said Scott Mellon, who said he "fully support[s] this proposal." Several speakers pressed the board for more rollout detail, alternative funding options and how much of the cost new development would cover through impact fees.
Wendy and staff answered questions after the public comment period, showing the projected revenue increases and saying the bond anticipation note to fund near‑term engineering is anticipated to be $15,000,000. Staff said bond capacity and eligibility depend on establishing adequate rates, and they warned that delaying an increase could jeopardize bonding and lead to regulatory scrutiny by state agencies.
The board moved, seconded and approved the resolution by voice vote; the board president said the item will next proceed to the City Council, where additional public comment and the final ordinance vote will occur.
Public assistance measures were also discussed: Wendy said the mayor is taking the lead on a utility assistance program to help qualifying families, seniors and veterans, with an initial investment "up to $1,000,000" to be detailed at upcoming council meetings.
What happens next: the council will hold its own hearings and decide whether to adopt the ordinance implementing the rates, surcharges and system development charges as recommended by the sanitary board.
