Rochester Hills council accepts first reading of water, sewer rate increase after advisory council recommendation

Rochester Hills City Council accepted for first reading an ordinance to raise city water and sewer rates to be effective July 1, 2025, following a recommendation from the Water Service Advisory Council (WSAC).

City staff presented three rate pathways — keep rates flat and defer larger increases later, a "bridle-even" option to reach operational break-even in 2025–26, and a smoothing option that phases increases across four years. The WSAC unanimously recommended the bridle-even option. The proposed changes raise the city’s residential average two‑month bill from about $170 to $185 — roughly $15 every two months, or about $90 per year (an 8.7% combined increase under the staff estimates).

The council heard multiple reasons for the adjustment. City staff said water volumes have trended downward in recent years, meaning fixed system costs are spread over fewer units of consumption. Providers’ rate pressure was also cited: Great Lakes Water Authority (GLWA) is projecting roughly a 5.8% increase to city water charges, and Oakland County Water Resources Commission rates for sewer are increasing about 9.9% this year. Counsel and staff said Oakland County plans a multi‑year sanitary sewer rehabilitation that the county will bond (the county estimated the district’s critical rehabilitation at about $100 million over three years); Rochester Hills’ proportional share was cited during council discussion as roughly 21.5% (about $21 million) of a district obligation.

City staff described earlier local practice of using reserves to smooth year‑to‑year rate changes; WSAC concluded those reserves are now close to the minimum target (25% of annual operations) and can’t be relied on for large future offsets. Staff said the bridle‑even option produces a water rate increase of about $0.81 per unit (11%), a sewer increase of $0.41 per unit (6.2%), and a $0.06 per‑bill increase in the customer charge (1%). The proposal also includes pass‑through increases to industrial and commercial customers tied to GLWA and county industrial waste/pollutant surcharges (averaging roughly 4–4.6% pass‑throughs).

Council members asked for and received clarifications about how the three‑year rolling volume averages had been biasing revenue forecasts, the size and timing of anticipated county bonding costs, and impacts on non‑metered customers (those on private wells who are billed a flat sewer charge based on the city’s residential average of 12 units per billing cycle). Several councilors emphasized that much of the current drawdown in the water and sewer funds is intentional investment in capital infrastructure rather than uncontrolled operating losses.

Action and next steps: the council voted unanimously to accept the ordinance for first reading (motion by Councilmember Walker; second by Councilmember Moreland). Staff said the ordinance will return for a second reading at the council’s next scheduled meeting (the presenter referenced the June 9 meeting) and, if approved on second reading, the changes are to become effective July 1, 2025.

The council distributed accompanying material in the public record, and staff committed to include the detailed WSAC analyses in the minutes and to continue outreach about the customer impacts.

Ending: Council members framed the increase as a necessary, though unwelcome, step to protect system reliability and avoid larger failures from deferred maintenance. No amendment to the proposed rate structure was adopted at first reading.