Grand Rapids Reporter

GRAND RAPIDS, Mich. –  The Grand Rapids City Commission yesterday heard an overview of the 2023 water and sewer rate study for rates effective January 1, 2024. Based on the preliminary study, the system-wide average rate increase is recommended at 6.65 percent for water rates and 1.34 percent for sewer service rates, although exact changes will vary for each wholesale and retail partner community.

City staff conduct a comprehensive review of operating and capital costs related to water and sewer services each year for the purpose of recommending water and sewer rate adjustments for Grand Rapids and its customer communities – the cities of East Grand Rapids, Kentwood and Walker, the county of Ottawa, and the townships of Ada, Cascade, Grand Rapids, Gaines, Tallmadge, Caledonia, and Wright.

During his presentation, Utility Financial Officer Tai Verbrugge told the Commission that based on the suggested rate increases, the typical Grand Rapids customer will likely pay $9.30 or 3.74 percent more for water and sewer services quarterly. Rates for retail customers living in Walker, Kentwood, Cascade Township, Grand Rapids Township, Tallmadge Township, Wright Township and wholesale customers living in East Grand Rapids, Ada, Gaines, Caledonia and Ottawa vary due to the allocation of capital infrastructure costs as well as usage trends that effect rates in each jurisdiction.

Both Systems experienced fluctuations in the three-year average of billed volume that made an impact in the rate changes. The Water System experienced a 3.22 percent increase in the three-year average of billed volume, primarily as a result of a historically dry spring. This results in a downward pressure on rates for the Water System. The Sewer System experienced a 0.70 percent increase in the three-year average of billed volume. With overall consumption up, this likewise causes downward pressure on rates for the Sewer System as well.

“Asset management remains a priority for both systems, and asset additions, combined with the increase in the return-on-investment rate, are the biggest drivers in this year’s study,” Verbrugge said. “Water main replacements in the City of Grand Rapids and investments in integrated assets at the Lake Michigan Filtration Plant were the major drivers for the Water System rate increase. Furthermore, the Water System is continuing to focus on private lead service line replacements for City of Grand Rapids residents in accordance with the Environmental Protection Agency (EPA) and The State of Michigan Environment, Great Lakes & Energy Division (EGLE) regulatory requirements. Operational costs played a significant role in the rate increase as well, with the inflationary impact on wages, process chemicals and electricity driving up costs.

“With the Sewer System, investments in sewer mains in the City of Grand Rapids were major drivers in this year’s study, alongside capital improvements being done at the Water Resource Recovery Facility. On the operations side, increased demand for natural gas needed to run our combined heat and power generators and the renewal of software licenses were significant costs influencing Sewer rates.”

Rate impacts were tempered by the continued reduction in debt service from the Combined Sewer Overflow (CSO) program, revenue from late fees, and the growth of natural gas sales from the biodigesters.

An informational video and PDFs of the rate study PowerPoint presentation and the Citizen's Guide to the 2023 Preliminary Rate Study can be found at: https://www.grandrapidsmi.gov/rate‐studies.

The public is invited to comment on the report and rates through December 4. Comments will be recorded and considered as part of the FY2025 budget planning process. A copy of the annual rate study is available online at https://www.grandrapidsmi.gov/rate‐studies and in the City Clerk’s Office. Customers wishing to make official comment can do so by sending a correspondence to the City Clerk’s Office, 300 Monroe NW, Grand Rapids, MI 49503 or by sending an e‐mail to info@grcity.us.

The Grand Rapids City Commission is anticipated to approve the rates through resolution on Tuesday, December 12.

Original source can be found here.