An annual review of operating and capital costs for city water and sewer services determined 2022 pricing adjustments for greater Grand Rapids residents.
The comprehensive review studied operating and capital costs related to annual water and sewer service leading to a recommendation of a price increase less than the current rate of inflation. Findings were presented this week to the city commission and recommended a rate increase of 4.08% to water and 4% to sewer services. By contrast, the annual inflation increase for the 12 months leading up to September 2021 showed a 5.39% increase overall.
The city commission is expected to approve the rates by resolution on Tuesday, Dec. 14, and any rate change recommendations to take effect Jan. 1 will impact Grand Rapids’ customer communities including East Grand Rapids, Kentwood and Walker, Ottawa County and townships of Ada, Cascade, Grand Rapids, Gaines, Tallmadge, Caledonia and Wright.
Utility Financial Officer Jenessa Carter, who presented the study’s findings to the city commission, said the typical customer is likely to pay $7.99 or 3.5% more per quarter for water and sewer services. Rates for retail and wholesale customers within the service area will vary due to differing allocations of capital infrastructure costs and usage trends affecting rates in each jurisdiction.
A three-year average showed fluctuations in billed volume for both services leading to rate changes for water and sewer. Billed volume is used to forecast the next calendar year’s expected revenue as part of the study. Water saw a 1.32% billed volume increase within the three-year period due to dry weather conditions during fiscal year 2021, while sewer saw a 2.18% billed volume reduction also due to dry weather and sewer lining projects resulting in infiltration in the system. Sewer billed volume also lowered due to less usage from COVID-19 shutdowns of businesses and schools.
“Asset management remains a priority for both systems,” Carter said. “Investments at the Lake Michigan Filtration Plant were a major driver for the water system rate increase. Furthermore, private lead service line replacements for the city of Grand Rapids residents in accordance with the Environmental Protection Agency and (Michigan Department of Environment, Great Lakes and Energy) regulatory requirements also drove costs.”
Lowered costs over the three-year average period have paved the way for the coming sewer service rate increases, and Carter said maintenance work at the city of Grand Rapids Wastewater Resource Recovery Facility has also impacted the increase. Other rate increase causes include PFAS testing processes and supply chain issues from COVID causing inflated costs for needed chemicals for waste processing.
The full study is at this link.
Public comment related to the report and rates is welcome through Nov. 29. Comments can be emailed to firstname.lastname@example.org or mailed to the city clerk’s office at 300 Monroe Ave. NW in Grand Rapids.