Water rates could jump by 20-percent in Flint if financial problems aren’t fixed
FLINT, Mich. - People living in the Vehicle City are already paying some of the highest water rates in the country, and the situation could get worse.
City Council members listened to the grim news from consultants during a committee meeting on Wednesday.
The good news is that there is $200 Million coming to the city over the next two years for upgrades at the water treatment plant, replacing lead service lines, replacing water meters, and other projects around town.
The bad news is that for the city to meet state and federal guidelines, it needs to spend $300 Million over the next 20 years, or approximately $15 Million a month for capital improvements like replacing water mains and fixing leaks in the distribution system.
There’s a bigger problem which could hit water customers pockets books much sooner though.
The city is currently billing customers for only 50-percent of the water that it purchases in a year.
The other 50-percent is either lost through leaks, not billed correctly because of faulty meters, or official believe the majority is being stolen.
City officials are now forced to increase revenue coming into the water fund or else it could trigger an emergency manager if the fund becomes insolvent.
Officials will be focusing on increasing collection rates from 70-percent to 95-percent, correct the faulty meters which will solve some billing issues, and crack down on theft. If those benchmarks are met, the water fund will be stable and the city could in the future continue to make major and much needed upgrades to the system.
However, according to City of Flint Consultant John Young, water rates will see a steep increase.
“If we do not improve anything with collections, or the water theft rate, analysis shows us that we need three rate increases over the next three years. They would be 20-percent, 16-percent, and 10-percent. IF we get the collection rate up to 95-percent, but don’t address the water theft and metering issues, the increase would be 10-percent per year for three years. These are large rate increases,” Young explained.
The city must also come into compliance with requirement from the Michigan Department of Environmental Quality and the Environmental Protection Agency. Officials plan to present this plan to those agencies in the next few weeks.