The Great Lakes Water Authority is considering adopting the highest water and sewer rate increases in its 10-year history as a 4% cap on higher prices ends this summer.

The authority that serves 112 communities across eight counties in southeast Michigan has proposed increasing its wholesale water rates by an average of 7.73% and 5.39% for sewer rates for the 2026 fiscal year, which begins July 1. The authority’s board of directors is slated to vote on these charges during its Feb. 26 meeting.

Great Lakes Water Authority officials say the increases are needed to cover capital investments and maintenance that have been deferred for several years, along with corrosion controls in its water.

But some local leaders said the raises are higher than they would have liked and come when residents are already struggling with higher costs because of inflation. Eric Griffin, general manager of the Southeastern Oakland County Water Authority, called the proposed water rate increase “significant.” SOCWA contracts with GLWA to provide water services to 13 communities, including Berkley, Southfield and Royal Oak.

“There’s significant infrastructure investments necessary, whether or not that requires a seven and a half percent increase this year — I’m not sure,” Griffin said. “I think there needs to be more justification of the 7.5%.”

Demeeko Williams, founder and chief director of Hydrate Detroit, a water-relief nonprofit organization, said it is the wrong time for rate increases.

“Why are we raising rates when people are struggling to keep jobs, opportunity and such?” Williams asked. “… People are already struggling. That adds on to our water bills. People can’t afford their water bills.”

Williams hopes water affordability will be a priority and said that GLWA, the Detroit Water and Sewerage Department, and departments around the region need to be more conscious of their neighbors.

The increases are being weighed as a 10-year commitment the GLWA made when it was founded in 2014, called the 4% Promise, expires on June 30. As recently as 2023, the authority said that keeping the commitment to limit budget increases to 4% or below was “incredibly challenging.”Last year, GLWA approved increases of 3.25% for water and 3% for wastewater services. The hikes were lower for fiscal year 2024 at 2.75% each for water and sewer services. The authority said rate adjustments for water have averaged 2.9% for water over the last nine years and 1.7% for sewer.

Whether the proposed increases will be passed on to residents is to be determined, though SOCWA says it’ll have no choice but to pass the hikes on to its member communities in Oakland County. GLWA charges cities and townships for water and sewage treatment, and then local governments set their own rates for customers. Some mayors and township supervisors said they expect to raise rates for residents by less than GLWA’s hikes.

Nicolette Bateson, GLWA’s chief financial officer and treasurer, said that during the COVID-19 pandemic, the cost of some chemicals and construction materials shot up.

“Looking at this charge increase does not come from us as an easy ask in any way, but we really feel it’s the right thing to do for the system,” she said, “because … we have deferred some maintenance, we have put off some capital projects, and it’s not necessarily responsible for us to continue to do that.”

The authority said it is also spending an estimated $6 million on corrosion controls in its water and is paying half of the cost of a multiyear flood mitigation study with the U.S. Army Corps of Engineers.

Oakland County Water Resources Commissioner Jim Nash recalled that rate increases varied widely every year before the GLWA was created, sometimes going up to 12%. While the GLWA never raised rates by more than 4% over the past 10 years, Nash had concerns that they sometimes weren’t raised enough.

“A few years, we were a little concerned that they didn’t raise it enough,” Nash said. “And that’s good for ratepayers, but in the long run, you have to make sure you’re bringing enough money to do the capital projects, … the maintenance projects where you’re making sure that everything works right, and then the operations.”

Nash thinks part of the more than 7% rate increase is making up for the lack of increases over the past 10 years.

“It’s tied to the projects they need to do to make sure that we have the infrastructure we need,” Nash said. “Old infrastructure is being replaced.”

GLWA explains the rate hikes

When the Great Lake Water Authority was created in 2014 in the wake of Detroit’s bankruptcy after the Detroit Department of Sewerage and Water essentially ran the regional system that had customers as far north as Flint, a memorandum of understanding restricted annual budget increases to 4% for its first 10 years of operation. Under the bankruptcy exit plan, Detroit’s water department agreed to lease its assets to the new authority.

Bateson, GLWA’s chief financial officer and treasurer, said the memorandum of understanding limited budget increases to 4%, but not necessarily sewer and water charges.

“But the theory is: if you’re keeping your budget under control, you’re also keeping charges under control,” she said.

The authority started seeing high-cost increases in 2022, including jumps in the price of steel and chlorine. The authority responded by leveraging its investment earnings and refinancing bonds.

“So we’ve done all of these things, but when you still see 55-80% increases … you know the math doesn’t add up,” she said. “And we’re facing continued increase in our infrastructure costs, particularly on the water system. We have a lot of large construction projects underway right now.”

GLWA is also spending money on its orthophosphate program. Public water systems commonly add phosphates to drinking water to prevent the release of toxic metals in the water, according to the Environmental Protection Agency.

Michelle Zdrodowski, chief public affairs officer for GLWA, said the authority doesn’t have lead in its pipes, but there is lead in some local communities’ pipes. She said GLWA has increased the amount of orthophosphate it puts into the water, which helps local communities protect their own systems and residents protect the pipes in their homes.

Bateson said GLWA has been talking with the communities it serves about rate increases for the last couple of years, so “it’s not a surprise.”

“But at the end of the day, nobody likes a charge increase,” she said. “We don’t like asking for a charge increase.”

GLWA said its annual water rate increases have averaged 2.9% in the nine years from 2018 to 2026, while the sewer service charges have risen an average of 1.7%. The lowest increase for water was 0.6% in 2020, while the authority cut sewer rates by 0.6% in 2022 and by 0.7% in 2018.

Nick Sheeran, a homeowner in Sterling Heights and an electrician, said that addressing deferred maintenance “makes sense.”

“I’d rather see money spent like that because there will be, especially with these construction projects — it is putting people to work,” he said. “And that’s probably, in my opinion, the best way that you can spend the money, if you’re going to have to spend it.”

SOCWA responds to rate hikes

The Southeastern Oakland County Water Authority is the largest model contract customer of GLWA, representing about 14% of the utility’s revenue, said Griffin, SOCWA’s general manager.

Nearly 90% of SOCWA’s budget goes toward GLWA costs, and Griffin said they will have no choice but to make its member communities pay more for water and sewer services, which will impact residents directly.

“I have no alternative but to pass that increase on to my communities, and they’re going to be forced to pass those increases to their residents,” Griffin said. “So the bottom line is … that is where the increase is going to hit, and 7.5% is a big increase.”

Jim Breuckman, the city manager of Pleasant Ridge, one of SOCWA’s member communities, was not surprised at the rate increases.

“Water systems are contending with secular declines in water usage, while infrastructure ages and requires costly maintenance and upkeep,” Breuckman said.

‘I hate to burden people further’

Ken Siver, the mayor of Southfield, which is part of SOCWA, said “nobody wants to pay more” and noted that for some people, the current rates “have been a challenge.” They have cut back on their water use.

“On the other hand, I know that it’s not the water — it’s the system, and for years, the system … had been neglected,” he said.

Siver said his city used to have water main breaks “constantly,” but the city has been doing a major overhaul of its water mains. He said he is “kind of torn” about the GLWA rate increases.

“We have to invest, and at the same time, I hate to burden people further,” he said, “but … you just can’t keep ignoring the needs of the system.”

Rates to be determined

From Grosse Pointe Woods to Plymouth Township, several local officials said even though the wholesale rates are higher than they would’ve liked, they still have to set their own rates.

Grosse Pointe Woods Mayor Arthur Bryant said his community hasn’t increased rates in five years because it had built up surplus water and sewer funds. But he thinks the city will have to enact a raise this time.

“Nobody likes an increase,” he said. “I don’t personally like an increase because I have to pay the same thing everyone else does, but I think we’ll work our way through it OK.”

In Plymouth Township — which gets its water from GLWA, but it doesn’t use the authority’s sewer services; it instead uses Ypsilanti Community Utilities Authority — Supervisor Charles Curmi said the amount that the township raises its water rates partly depends on the financial position of its water department.

“And it does not always reflect exactly what Great Lakes Water Authority has increased,” he said. For each of the last six years, Plymouth Township has either not raised rates or increased them by less than GLWA’s hikes.