Ann Arbor Utility Rate Increases Get Initial OK

Water, sewer and stormwater rate increases have received initial approval from the Ann Arbor city council. The initial action came at the council’s May 20, 2013 meeting.

In terms of revenue generated to the city, the rate increases are expected to generate 3.55% more for drinking water ($739,244), 4.25% more for the sanitary sewer ($955,531), and 4% more for stormwater ($233,811). [.pdf of complete utility rate changes as proposed]

According to the city, the rate increases are needed to maintain debt service coverage and to maintain funding for required capital improvements. The city estimates that the impact on an average customer will be a $20.66 per year increase in total utility charges.

The city’s drinking water charges are based on a “unit” of 100 cubic feet – 748 gallons. Charges for residential customers are divided into tiers, based on usage. For example, the first seven units of water for residential customers have been charged at a rate of $1.31 per unit and are proposed to be increased to $1.35 per unit. Since 2004 the city has used four tiers of rates, based on usage. For this year, however, the amount charged for the top tier – for usage over 45 units – is proposed to be collapsed into the next lower tier. Currently the top tier is charged at $6.78, but is proposed to drop to the third tier rate of $4.88.

Sewer rates are charged as a function of water usage. The commodity rate is proposed to increase from $3.48 to $3.65.

The city’s stormwater rates are based on the amount of impervious area on a parcel and are billed quarterly. For example, the lowest tier – for impervious area less than 2,187 square feet – has been $13.68 per quarter. Under the new rate structure, that increases to $14.20.

Water usage for Ann Arbor city residents is available on the city’s website. [You'll need your account number to access information.]

The increased rates will require a second and final approval from the city council after a public hearing.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]