Following a presentation, the Board of Trustees approved the new proposed water and sewer rates for the next fiscal year Sept. 25.

Following a presentation, the Board of Trustees approved the new proposed water and sewer rates for the next fiscal year Sept. 25.

Photo by Alex Szwarc

Macomb Township board approves new water rates

GLWA rate increases 12.8%

By: Alex Szwarc | Macomb Township Chronicle | Published October 7, 2019


MACOMB TOWNSHIP — Water and sewer rates are locked in for the new fiscal year.

At the Sept. 25 Macomb Township Board of Trustees meeting, Dawn Lund, vice president of Utility Financial Solutions, LLC, presented on water and sewer rates for fiscal year 2019-2020, which started Oct. 1 and ends Sept. 30, 2020.

After the nearly one-hour presentation and discussion on the issue, the board unanimously approved the new proposed water and sewer rates for the next fiscal year.

The motion was to increase the rate by 9.9% for water and by 1.9% for wastewater.

Macomb Township Water and Sewer Superintendent Gerry Wangelin said in viewing the proposed increase from the Great Lakes Water Authority, he would recommend the board approve the 2019-2020 retail water rate from $40.14 to $40.40.

Residents will observe the rate per year increase from $4.14 per 100 cubic feet to $4.40.

Lund reviewed with the board results of a financial projection update for water and sewer.

In 2018, Utility Financial Solutions provided a detailed cost of service study to the township, looking at revenue requirements.

“Two significant changes were the increase you received from Great Lakes Water Authority and a significant change in your capital improvement program,” Lund said.

She indicated that in the water department, operating income turns to a loss in 2022.

“Cash spends down negative in 2023. This shows we can’t move forward in a healthy manner by not having some sort of rate increase,” she said. “This year, you got a 12.8% rate increase from Great Lakes Water Authority.”

What that means, she said, is that the water provided to the township is passed on to its customers from GLWA.

Trustee Tim Bussineau asked if other regional communities received as high of an increase. Lund said most other communities Utility Financial Solutions works with did not.

Clerk Kristi Pozzi said a graph was shown to the board in 2018 that displayed the effect of the township’s irrigation systems and water consumption during peak hours.

“We saw the potential problem of increasing our rates due to this, which is why we launched a campaign on enforcing the water ordinance,” she said.    

A table in the presentation showed the recommended rate adjustments for water.

“We’re recommending a 9.9% rate adjustment that’s driven from a 12.8% increase from GLWA,” Lund said. “We want to ensure we’re passing the increased cost on. If we delay the increase, it’s a compounding effect.”

Results of a 2018 cost of service study shows that, “In a perfect world,” Lund said, $34.99 would be charged per yearly quarter for a one-inch meter, and $3.67 would be charged per commodity used.

“You’re actually charging your customer $10.25 a quarter, and $4.14 per commodity used,” she said.   

Lund said Macomb Township’s rate structure is skewed from fixed cost recovery to variable cost recovery.

“When I didn’t put much on the recovery rate, from $4.14 to $4.40, I’m trying to fix how you’re currently charging your customer,” she said.

Lund predicts it will take between three and five years for residents to go from $10.25 to $34.99.

“We don’t want to cause rate shock, but we do want to work towards that,” she said.

From a financial stability point, she said, if the board didn’t approve the increase, the township would’ve taken a step backward in its financial position.