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Township adviser recommends raising water commodity rate to $4.50 per 1,000 gallons to pay for $10.5M in projects
Summary
A consultant told Hartland Township trustees the water system needs a multi‑year rate increase and two bond issues totaling $10.5 million to fund required capital improvements and meet regulatory obligations; the proposed commodity rate would rise to $4.50 per 1,000 gallons from $1.40.
Steven Burke, the township’s financial adviser from MFCI, told the Hartland Township Board on Feb. 24 that the water system’s current revenues will not cover planned capital improvements and projected debt service.
“We cannot cut expenses enough to cover this, so it needs to come from the revenue side,” Burke said during his presentation of the Water Supply System Rate Study. He told trustees the consultant team modeled two bond issuances totaling $10.5 million to fund improvements needed to meet EGLE regulatory requirements and to address aging infrastructure.
Burke said the study produced a proposed commodity rate of $4.50 per 1,000 gallons, up from the current $1.40 per 1,000 gallons, and that the model assumes ongoing commodity increases of 10% per year and a 3% annual increase in the ready‑to‑serve (RTS) fee for inflation. He said the model targets a 110% debt service coverage ratio to preserve a modest margin for seasonal variability. The study estimated a typical customer would see a monthly bill increase of about $20–$25 based on usage between 18,000 and 24,000 gallons per quarter.
Clerk Larry Ciofu asked about the study’s unaccounted water figures; Burke and Manager Mike Luce said the study shows water loss rates of roughly 16% (2023), 21% (2024) and 19% (2025), which they attributed in part to maintenance flushing and localized “brown water” issues. Jeremy Schrot of Spalding DeDecker said some planned capital projects — pipe extensions, filter and plant improvements — aim to improve hydraulics so the system must be flushed less often.
Trustee Pete Petrucci urged trustees to remember past rate history noting that rates had been as high as $3.62 per 1,000 gallons in prior years and that gradual increases previously could have avoided a single large uplift in rates today. Burke thanked township staff for assembling system data and said the township’s strong general fund and growth prospects make the bond issuances feasible while limiting borrowing costs.
The board did not vote on any rate changes at the Feb. 24 meeting; the study and rate model will be used in budget deliberations and future rate‑setting discussions.
