GLWA HONORS 4% PROMISE FY 2024 & FY 2025 BIENNIAL BUDGET DESPITE HISTORIC OPERATIONAL COST INCREASES & INFLATIONARY PRESSURE
DETROIT— The Great Lakes Water Authority (GLWA) Board of Directors, at its meeting on Wednesday, February 22, 2023, approved the organization’s Fiscal Year 2024 and FY 2025 biennial budget, as well as the corresponding FY 2024 water and wastewater charges for its member partner communities.
The system-wide charge increase for both the water and wastewater systems is 2.75 percent. This is the result of an overall FY 2024 budget increase of four percent, offset by increased investment earnings. The charge increase is well below the current rate of inflation in the United State, which is 6.5 percent. Highland Park bad debt expense is not included in the FY 2024 charges.
“Given historic operational cost increases and inflationary pressures on our capital programming, this year it was incredibly challenging to remain committed to the promise we made at our founding to keep our annual budget increase to no more than four percent in each of our first 10 years of operations,” said Suzanne Coffey, Chief Executive Officer, GLWA. “Thanks not only to increased investment earnings, but also to the hard work and commitment of our GLWA team to the principal of affordability, we achieved our goal. I am grateful for everyone involved, including our team members, our member partners and our Board of Directors for their ongoing collaboration.”
GLWA’s seven-year annual average system charge adjustment for the water system is 2.2 percent, and 0.9 percent for the wastewater system. It is important to note that GLWA’s average annual charge adjustment, over a seven-year period, is lower than the Consumer Price Index for Utilities (CPI-U).
The water and wastewater charges set by GLWA cover all the Authority’s costs of providing water and wastewater services. This includes pumping stations, transmission pipes, and treatment plant maintenance and renewal, as well as paying debt service on outstanding bonds issued to fund ongoing capital improvements to the system’s vast infrastructure.
Individual member partner communities will see wastewater system charge adjustments consistent with the system average of 2.75 percent. Water system charge adjustments for most member partner communities will be different from the system average of 2.75 percent. This is because, for the first time, water contract demands for nearly all 88 member partner communities were renegotiated in the same year. This process, which is called the Contract Alignment Process (CAP), aims to get all members on the same four-year update cycle for water demands. The previous approach resulted in variability every year, even for those member partners whose demands had not been updated. Member partner communities found variability challenging and sought greater stability. The FY 2024 water system charges reflect the every-four-year “reset” in shares based on the contract alignment process for nearly all water member partner communities, effectively concentrating the variability in a single year.
“We worked closely with our member partners to identify a solution to maximize stability and contain the variability to a single year in order to enjoy relative stability over four years,” said Nicolette Bateson, Chief Financial Officer and Treasurer, GLWA. “We value our member partners’ collaboration and will continue to be transparent and engaged with our members in navigating budgets and charges.”
It is important to note that GLWA charges are only one element of what local residents and business owners see on their bill. Each municipality has its own added costs associated with maintaining its local system, which can mean that GLWA’s charges may be a larger or smaller percentage of the total cost of a local community’s water expenses. Ultimately, each individual member partner community sets the end cost, or local rates, passed along to residents and businesses. More information on how charges are set can be found here.
For more information on GLWA, please visit www.glwater.org.
About the Great Lakes Water Authority (GLWA)
The Great Lakes Water Authority (GLWA) is the provider-of-choice for drinking water services to nearly 40 percent, and efficient and effective wastewater services to nearly 30 percent, of Michigan’s population. With the Great Lakes as source water, GLWA is uniquely positioned to provide those it serves with water of unquestionable quality. GLWA also has the capacity to extend its services beyond its 88 member partner communities. As part of its commitment to water affordability, the Authority offers a Water Residential Assistance Program to assist low-income households in participating member communities throughout the system. GLWA’s board includes one representative each from Oakland, Macomb, and Wayne counties, two representatives from the city of Detroit, and one appointed by the Michigan governor to represent member partner communities outside of the tri-county area.
