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Consultant outlines proposed tiered water rates; council will review
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Summary
A consultant presented a proposal to the Norton Shores City Council to move to a two-tier water rate and to phase out REUs in favor of meter-based sewer fixed charges; staff said the plan would raise bills for some low-volume customers and could lower costs for some high-REU customers with small meters.
John Kaczor of Municipal Analytics presented a proposed two-tier water rate structure to the Norton Shores City Council at its March 24, 2026 work session, outlining a split between usage up to 10 million gallons per quarter and usage above that threshold.
Jim Murphy, Norton Shores’ director of public works, introduced Kaczor and explained the city asked for a rate study to evaluate alternatives to the current Residential Equivalent Unit (REU) system for sewer charges. Kaczor described the consultant recommendation: set a second water-rate tier at 50% of the first tier but no less than 104% of the wholesale rate, phase out REUs, and transition to meter-based sewer fixed charges.
The presentation said the combination of changes would tend to increase bills for lower-volume customers while producing smaller increases — and in some cases potential decreases — for customers with larger REU allocations but smaller meter sizes. City staff noted that implementing the changes would change how fixed sewer costs are allocated among customers and could require phased implementation.
Council members thanked Kaczor for the analysis and asked staff to review the data further before taking any formal action. No motion or vote was taken at the work session; council members expressed a consensus to study the proposal and return with additional information and options.
The council did not set a timeline for adoption during the session and instructed staff to provide additional detail on projected bill impacts by customer class in a future report.