Ann Arbor City Council gives initial approval to utility rate increases, budgets for wastewater upgrades

In terms of dollars, the changes are projected to increase revenues in water, sewer and stormwater by $664,993, $829,481 and $176,915, respectively. City officials say the increases are needed in order to finance capital improvements in all three systems.

According to data provided by the city, the impact on a typical residential customer is $18.92 per year, a net increase of 3.2 percent.

The typical residential customer pays close to $600 a year.

Mayor John Hieftje defended the increases at Monday's council meeting, saying they're "pretty close to inflationary" and less than increases proposed in many other communities.

"We're certainly, it sounds like, on the very low end," Hieftje said.

Sue McCormick, the city's public services administrator, backed up that claim with a report on what other communities in the state are doing with utility rates.

"We looked at a variety of sources, including some online sources and some information in the Associated Press," she said, noting that Plymouth is looking at a 40 percent increase in rates; Farmington, 15 percent; Detroit, 9.3 percent, and Canton, 7 percent.

She said the average increase for Southeast Michigan is 9 percent on a typical residential bill — nearly three times the level of increase being proposed in Ann Arbor.

Council Member Stephen Kunselman, D-3rd Ward, noted those municipalities are part of the Detroit Water and Sewerage Department. He asked McCormick if there was information available on other communities like Lansing and Grand Rapids.

McCormick said she'd try to dig up more information and present that to council members before the June 20 meeting.

The council also took action Monday night to approve a $2.4 million contract amendment with environmental consultant Malcolm Pirnie Inc. for engineering design services and bid work on the city's Wastewater Treatment Plant facilities renovation project.

The city is following through with renovations identified in the Wastewater Treatment Plant's Facilities Master Plan, a 25-year planning document. Construction of the project will take place over five fiscal years and is estimated to cost $80 million.

The west portion of the plant was constructed in the 1930s, and the east portion in the late 1970s. The west portion was taken out of service in 2006 due to its dilapidated condition and its replacement is seen as necessary to meet current and future wastewater treatment needs.

In addition to the complete demolition and replacement of the west portion, the project includes other renovations and improvements throughout the plant. Malcolm Pirnie Inc. is producing final bid drawings and specifications for securing permits and soliciting bids from contractors.

In March 2005, the City Council approved an original $3 million contract with Malcolm Pirnie Inc. for various services related to the project. That's been amended four times now.

The latest amendment involves completing the design, securing the necessary regulatory permits and applying to the Michigan Department of Environmental Quality for low-interest loans from its 2012 State Revolving Fund Program. Including the latest amendment to the contract, the total cost for design engineering services is $8.8 million.

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.