Water and sewer infrastructure project explained
Posted on 04/11/2024
City Hall City Council recap of April 8 meeting

City Council held a special meeting on April 8 to hold a public review of the plan to upgrade the water infrastructure over the next 5-1/2 years at an estimated cost of $24 million. Since few residents attended the meeting, most will be getting their information from the city’s news platforms, such as this article and the city website. In the absence of Mayor Brian Turnbull, Mayor Pro Tem Barbara Moroski-Browne conducted the meeting.

At the request of DPW Director Mike Domine, OHM Engineer Chris Elenbass presented a report on the city’s aging water infrastructure and reviewed the plan to maintain the city’s water quality while improving the delivery system.

The plan involves extensive repair and replacement projects that will equalize water pressure, reduce water breaks, and deliver a more reliable water system that also meets the requirements of EGLE. A few years ago, EGLE flagged the need to replace the city’s underground water storage reservoir since it could no longer be inspected and was at risk of taking on rain water. Since then, the city developed a plan/schedule to close the underground reservoir and associated pump station near Hillside Middle School and build a new booster pump station at Baseline near Center. This portion of the infrastructure project needs to begin in 2025 and be completed in 2027 to meet EGLE’s requirements.

Other parts of the project involve replacing an estimated 21,320 feet of 8- to 12-inch water main; installing new pressure-reducing valves; and replacing 35 lead service lines. Much of the water main replacement will be done in conjunction with repaving older, worn streets. The lead service line component will adhere to Michigan’s lead and copper rules.

New pressure-reducing valve (PRV) connections will be made at Potomac and Rogers, Baseline and Center, and at Cady near Wing. This will equalize water pressure in all sections of the city.
Additionally, several areas will have watermain added to create a “loop.” This eliminates dead-end areas in the water system and also enhances reliability and water flow.

Also at the meeting, John Kaczor of Municipal Analytics presented results of the water/sewer rate study that evaluated the city’s current rate structure and also incorporated financing the water infrastructure projects. A utility system’s revenue requirements include operations and maintenance, capital, and debt service. Established rates need to recover all costs and meet a cash reserve requirement. Nearly 100% of sewer costs are fixed, yet the rate is 100% variable. More than 60% of water costs are fixed, yet only 7% of revenue is fixed.

Kaczor outlined a plan that would issue a bond in 2025 for $14.5 million to pay for three years of work and a second bond for $8 million in FY 2028/2029 to pay for another two years. To help finance the infrastructure program, a system-wide rate increase of 10% is recommended. However, the individual cost impact will vary based on a customer’s meter size and consumption. City Council will need to decide the best combination of variable and fixed components of the rate structure to implement. In each scenario, a new fixed cost called “Ready to Serve” will be introduced and is intended to cover a portion of the fixed costs.

To illustrate the impact of costs on users, Kaczor showed profiles of six different types of users: low, medium and high volume with different meter sizes – with and without an irrigation system. Those with an irrigation system who use a dual meter may not have to pay for the sewer portion of their water bill (currently set at 50%) that’s used outdoors on lawns and gardens.

Council will vote on the proposed rate adjustments at a future meeting.

City Manager George Lahanas noted that GLWA offers assistance to customers who can’t afford their water bills. He also said that any grants obtained in association with the project would reduce the overall cost.

Lahanas thanked Council for holding the meeting and praised the work of DPW Director Domine and Finance Director Sandi Wiktorowski, among others. He said the meeting provided good information for Council members as well as residents.

Council Member John Carter said, “As a community, we’ve shown the ability to work through challenges and find thoughtful and strategic solutions and work toward long-term plans. There’s an opportunity here to establish a structure and approach to benefit generations to come.”

View the City Council special meeting here

View presentation here.