Press Release

OWOSSO SEWER & WATER RATES

The Owosso City Council is considering a proposal for a water rate increase. The last water rate increase was in September 2002. Monthly water and sewer charges each consist of a demand charge and a usage charge.

The water demand charge is proposed to increase from $6.50 to $7.50 per month for a residential user with a 5/8-inch water meter. Water demand charges for larger metered services would increase in proportion. This increase is for debt service on the water revenue bonds financing the $4,800,000 treatment plant improvements completed last year. The $7.50 rate had been requested in 2002 but was scaled back to $6.50 per month to phase in the increase. The water usage charge would increase from $1.10 to $1.20 per meter unit (100 cubic feet or about 750 gallons). This increase is needed to cover increases in operating expenses. Retail water rates for customers outside the city limits of Owosso are double the in city rates noted above. Sewer rates would not change. The proposal is for the increase to be effective with the water bill run of September 30, 2005 (bills due for payment in October).

The following was provided to the Owosso City Council for their September 6, 2005 meeting:

Attached is a “Water and Sewer Rate Comparison” table (see reverse side).  The table compares actual water and sewer charges for a “typical” residential user with a standard size service and monthly water use of 8 meter units (i.e. 800 cubic feet [ccf] or about 6,000 gallons). Owosso’s charges are given in the center box showing both existing charges in effect since 2002 and charges under the proposed water rate increase (2005). The nine communities listed under Category I have lime softening water treatment facilities and a similar level of wastewater treatment as Owosso. They represent a significant size range as approximated by city population. Category II provides comparative information on charges for nearby communities.

Owosso’s water charges, even with the proposed increase, are below the median and average for other similar (Category I) communities and less than other local communities (Category II). Owosso’s sewer charges are about average compared to similar communities and less costly than other local communities, except for Caledonia and Owosso Charter Townships. Owosso’s combined water and sewer charges are between the median and average for similar communities and less than other local communities.

In 2003 the Michigan Section of the American Waterworks Association surveyed water charges for a variety of Michigan communities. Over 70 communities participated in that survey. The survey report is about 15 pages in length and includes data not important for general rate comparison. That survey includes many communities using a groundwater supply with little if any treatment. A full copy of this report is available on request. The most relevant cost comparisons are summarized as follows. The water demand charge for a typical residential user (5/8 inch metered service) averaged $9.31 per month with a median value of $7.59 for the 73 communities responding to the survey in 2003. Owosso’s current water demand charge is $6.50 per month, proposed to go to $7.50 per month. The median water usage charge was reported at $1.67 per 100 cubic feet (ccf). Owosso’s 2003 rate was $1.10, proposed to go to $1.20 per ccf. The average and median monthly water charges for a residential user using 10 ccf were reported at $22.79 and $16.67 in 2003. Owosso current charge would be $17.50 per month, which would go to $19.50 per month under the proposed rate schedule.