Owosso staff warns current water/sewer rates can’t cover planned fixes; council considers town-hall outreach

Owosso city staff told the City Council on Monday that the community’s planned water and sewer projects — including repairs at the wastewater treatment plant, lead service-line replacements and main renewals — exceed what the current rate structure will support and that council must consider rate increases to proceed.

The council continued a multi-meeting discussion of utility finances after Director Ryan Savanek and wastewater Superintendent Tim gave a detailed history of work since 2020, funding sources used and remaining capital needs. Savanek said the city has secured grants, principal-forgiveness and low-interest loans but that those awards are not enough to cover all projects without higher user rates.

Why it matters: The city’s underground water and sewer systems are aging, staff told the council. Without funding for projects the city raised as priorities — including cleaning a major interceptor, adding a retention basin to handle wet-weather flows, replacing nitrification towers and completing clarifiers — staff said the city faces increased risk of sanitary sewer overflows, permit violations and emergency repairs that would be costlier than planned rehabilitation.

“We don’t have the $20 million in the bank to do the reservoir or the $15 million to do the roughing towers,” Director Ryan Savanek said, describing the state and federal grants that reduce local borrowing needs but do not make the projects affordable at current rates. “We go for every penny we can.”

Savanek explained that water and sewer operate as enterprise funds — the fees users pay must cover the funds’ expenditures — and warned that some revenue sources the public suggests (for example, charging for unrelated municipal parking) are not lawful or feasible for enterprise funds. He reviewed a multi-year funding history that, staff said, includes significant SRF (state revolving fund) loans and principal forgiveness, ARPA contributions that have already been used, and a recently awarded $600,000 TMF (technical, managerial, financial) grant for lead-service-line identification.

Tim, the wastewater superintendent, walked council through plant-era details and the projects staff say remain critical. He said parts of the wastewater plant date to the 1930s and 1970s and that some structures now require replacement rather than patching: “The tower tank portions are structurally degraded past the point of rehab,” he said of nitrification towers, and he described the risk of structural collapse and permit enforcement if those components fail. He also outlined ongoing work on the headworks, solids handling, phase 1 liquid-process improvements and the secondary clarifier project.

Staff highlighted several items where failure would quickly force emergency response or regulatory action: cleaning and inspecting a major interceptor that runs near the river (staff said sections are clogged and partly collapsed), replacement or lining of sewer crossings under M-52 where one 6-inch line has already collapsed, and a planned retention basin to store up to several million gallons in storm-related peak flows rather than discharging untreated flow or backing up into basements.

Council and staff discussed priorities and tradeoffs. Several councilmembers asked whether all listed items are strictly necessary; staff consistently replied that the items are the known, near-term needs and that deferral raises the likelihood of emergency failures and regulatory penalties. “All of these are top priority,” Tim said when asked whether the projects were optional. Staff acknowledged earlier decisions had delayed some work and that previous councils had not sustained rate increases long enough to match inflation and rising construction costs.

Public comment at the meeting tied directly to the utility discussion. Patrice Martin, a resident of North Park Street, urged the council to hold a town hall to explain how rates are calculated, to show how proposed projects would affect the average household and to compare Owosso’s rates with other communities. “I would ask that you all consider the possibility of maybe having a town hall to help everyone understand what is at stake,” Martin said. Mayor and staff agreed to consider a fifth‑Monday or special town-hall format to let residents ask questions about rates and projects.

Other community items: Tom Manky, a downtown merchant, and Bruce Noble, a resident, used public comment to highlight upcoming community events and local summer concerts; councilmembers acknowledged those items but kept the meeting focused on utility funding.

Votes at a glance - Agenda approval — motion carried (voice vote). - Minutes of the regular meeting of February 2025 — motion carried (voice vote). - Consent agenda — approved by roll call (Councilmember Ludington, Fear, Pro Tem Rotem Haber, Osmer, Owens, Olsen and Mayor Tice voted yes). - Notice of pecuniary interest (monthly disclosure) — approved by roll call; city manager noted the subsequent approval of an amount $1,584.29 will be requested at a later meeting. - Shiawassee Recycling Community Work Group Charter — adopted by roll call (Councilmember Fear, Owens, Ludington, Pro Tem Rotem Haber, Osmer, Olsen and Mayor Tice voted yes).

What’s next: Staff recommended continuing the rate discussion and completing presentations from other utility superintendents at upcoming meetings so the council and the public have full technical and financial detail before a rate decision. Councilmembers agreed to schedule additional public outreach, and the city manager suggested using the next “fifth Monday” meeting as a town-hall format if the council chooses to do so.

(Reporting note: dollar figures and program names are those used by staff in the council presentation. Where staff or the transcript used informal names for state regulators or programs, the article uses standard agency acronyms or program names — for example, SRF for state revolving fund programs and EGLE for Michigan’s regulator — to match commonly used, authoritative references.)