$1.8M in water and sewer rate hikes get initial OK from Ann Arbor City Council

The rate adjustments will provide revenue increases of 3.25 percent in water, 4.25 percent in sewer and 4 percent in stormwater, according to Praschan's memo.

That's projected to increase revenues in water, sewer, and stormwater by $664,834, $916,577 and $184,064 respectively.

The impact of the increases on the average single-family customer is $19.40 per year, a net increase of 3.21 percent if consumption is unchanged from last year, Praschan said.

A public hearing on the rate increases will be held on June 4 before the council votes to give final approval at second reading that night.

The city's drinking water rates for most residential customers are tiered based on usage. The city measures usage in units equal to 100 cubic feet of water or 748 gallons.

• Download a more detailed look at the rate changes

A typical single family bill is calculated with 21 units per quarter, is in the second tier for stormwater and receives a 10 percent discount for payment on or before the due date.

But even at the highest rate, the city's charges for drinking water are still significantly less than a penny a gallon.

The city is undertaking one of the largest capital improvement projects in its history: a complete rebuild of half the city's wastewater treatment plant.

City officials say the fact that the city is embarking on such a major project is one reason why utility rates have steadily increased, and why the city's utility funds show surpluses year after year. That money is being stockpiled for projects like this.