News photo by Josh Jambor A vehicle exits Clearview Car Wash on Ripley Avenue after getting a wash on Tuesday morning. Businesses in Alpena that utilize water are going to see their water and sewer bills climb as rate increases were part of the city’s new proposed budget.

ALPENA – The Alpena Municipal Council approved its annual budget for the fiscal year that begins July 1, with that comes new water and sewer rates that amounts to a 5% overall increase that breaks down to 3% for water and 7% for sewer rates.

Alpena’s budget year runs from July 1 through June 30.

The increases, recommended by City of Alpena Engineer Steve Shultz in an April 15 memorandum, were adopted to strengthen fund balances, support ongoing operations and maintenance, and fund critical capital improvement projects. The sewer fund is in particular need of additional revenue, according to Shultz.

“With usages proposed at 302,800 1,000-gallon units of water and 283,700 1,000-gallon units of sewer, these proposed rates would generate approximately $2,467,000 in the water fund and $2,283,785 in the sewer fund,” Shultz said in the memo. “Approximately 60% of which supports the operations and maintenance of the system, but the remainder will be used for capital projects and fund balance.”

The new rates come as the city nears completion of the Clearwell project and prepares for other large water and sewer initiatives outlined in the Capitol Improvement Program (CIP). Over the past five years, combined water and sewer rates have seen modest increases ranging from roughly 2% to 5%.

“There is nothing out of the ordinary about this year’s rate increase, we must raise our rates each year because it costs more every year to take care of the system, and that’s not including the capital improvement program,” Shultz said. “That’s the reason behind it, we are trying to minimize the increases the best we can, while at the same time putting some money in the fund balances.”

Shultz believes the rate increases will continue over the next few years as expenses to maintain the water and sewer systems rise.

“I think it would be short sighted of us to not consider rate increases each year and I think the users would expect that,” Shultz said. “Much like other utilities, you see rate increases and it’s not because we are necessarily doing anything particular at that moment but the maintenance dollars to take care of the system increases each year.”

Under the new rates, the combined commodity charge will be $16.20 per 1,000 gallons, consisting of $8.15 per 1,000 gallons for water and $8.05 per 1,000 gallons for sewer.

The quarterly “Ready to Serve” flat charges by meter size are as follows: customers with a one-inch meter or smaller will pay $15.00 for water and $15.00 for sewer, for a total of $30.00. Those with meters greater than one inch but less than two inches will pay $90.00 each for water and sewer, totaling $180.00. For two inch to less than three-inch meters, the charge is $225.00 per service, or $450.00 total. A three-inch meter carries a $270.00 charge per service or $540.00 total, a four-inch meter would be $375.00 per service ($750.00 total), and six inch or larger meters will be $750.00 per service or $1,500.00 total.

Most homes have a one inch or smaller water meter size.

For a typical residential user, these changes will result in the following quarterly bill increases depending on consumption: a customer using 10,000 gallons will see an increase of $15.40; 15,000 gallons will see a $23.10 increase; 20,000 gallons a $30.80 increase; and 25,000 gallons a $38.50 increase.

The new rates are expected to generate approximately $2.467 million in the water fund and $2.284 million in the sewer fund based on projected usage of 302,800 thousand-gallon units of water and 283,700 thousand-gallon units of sewer. Roughly 60% of the revenue will support day-to-day operations and maintenance, with the balance dedicated to capital projects and rebuilding fund reserves.

The rate adjustments will take effect with the 2026-27 fiscal year budget that goes into effect July 1. Residents should watch their next quarterly utility bills for the specific impact based on their meter size and actual water usage.