Grand Rapids introduces water and sewer rate study; average household bill to rise about $20/year
Loading...
Summary
City staff recommended a preliminary 6.38% system water increase and a 3.9% sewer decrease, producing a net average quarterly bill change of about +2% for Grand Rapids households (roughly $20 per year). Staff opened a 20-day public comment period and scheduled final rate consideration for Dec. 16.
City finance and utility staff on Nov. 14 presented the 49th annual water and sewer rate study and opened a public comment period on preliminary rate recommendations that would take effect Jan. 1, 2026 if approved.
Ty Berg, the water-systems financial analyst, explained the methodology: the city calculates each retail community’s revenue requirement from operating expenses, depreciation and the return on assets, then divides that by billed volume to set per-unit rates. Berg said the system-wide recommendation is a 6.38% increase for water and a 3.9% decrease on sewer; for the city of Grand Rapids that translates to about a 6.8% water increase and a 2.67% sewer decrease, producing a net rise of roughly 2% on the average quarterly bill — about $5 per quarter, or $20 per year for the typical household.
Berg identified the main drivers: the water system placed roughly $50 million of new assets into service this year (lead-line replacements, new mains and a Cascade project to move customers off PFAS-affected wells), and borrowing costs have increased (raising required returns on those assets). On the sewer side, fewer large capital additions and stronger natural-gas revenues from the wastewater digester helped push rates down; the utility reported more than $3.2 million in natural-gas sales this year, which reduces sewer cost pressures.
On affordability, Berg explained the city’s contract allocation: 12.5% of penalty (late-fee) revenue funds household assistance distributed by the Kent County Community Action (KCCA), while the remainder is used to reduce community-wide rate increases for municipalities whose proposed increases exceed the system average. Staff said last year’s penalty revenue funded assistance for roughly 200 households to date; a preliminary $250,000 is expected to be available for household-level aid next year.
The Utility Advisory Board recommended the preliminary rates to the commission last week. Staff opened a 20-day public comment period and scheduled in-person office hours at the main public library; the final recommendation will return to the commission on Dec. 16. Berg noted customer communities have 30 days to offer alternatives or make buy‑down contributions before rates are finalized.
