News Photo by Steve Schulwitz Alpena Department of Public Works employee Declan Higgins works on a fire hydrant on Tuesday. Water rates in the area have slowly increased to address system repairs and improvements, but, on average, they are lower here than in many parts of the country.

ALPENA — The average American uses 80 to 100 gallons of water each day, and they pay significantly for it each year, according to the U.S. Geological Survey.

However, water in Northeast Michigan appears to be more affordable.

The average water customers in Alpena, Harrisville, and Rogers City — the three Northeast Michigan communities with municipal water systems — use less than 2% of their annual household income toward water, according to a News analysis of data provided by the municipalities.

According to a recent report by The Guardian, water bills exceeding 4% of household income are considered unaffordable, and growing numbers of residents in American cities make too little to keep water flowing in their house.

Municipalities have to spend more to fix and replace aging systems, and, with federal funding for water systems down 77% since its peak in the 1970s, cities are left to increase rates to cover those costs, The Guardian reported.

Despite incremental rate hikes, there still isn’t enough revenue to replace aging water systems without steeper increases, local officials said.

Water rates haven’t climbed as high in Northeast Michigan as in major cities, but they have edged higher, according to The News’ analysis.

In Alpena, where the annual median household income is $37,706, the city’s 4,283 residential customers pay an average of $576 per year for water. That means the typical water customer pays about 1.5% of their household income for water — about 2% for a family of four living at the federal poverty line.

In Alpena, 21.5% of people live in poverty.

Rates climbed from $6.04 per 1,000 gallons of water and $6.11 per 1,000 gallons for sewer in 2019 to $6.52 per 1,000 gallons for water and $6.62 per 1,000 gallons for sewer this year.

The city also adds a ready-to-serve charge, a debt charge, and administrative fees.

Earlier this year, city staff requested a 10% increase for water and sewer to help cover the cost of infrastructure needs. The Alpena Municipal Council rejected that hike and later approved a 5% increase.

“In order to keep an eye on rates, you have to keep an eye on costs, and I do that,” Councilman Mike Nowak said. “I also consider citizens’ ability to pay. You always have to do that. Sometimes, I think the numbers get a little out of whack.”

Nowak said the city sets its rates based on current expenses at the water and sewer plant, as well as projections for the next two years. Other municipalities use five-year averages to establish rates. Nowak said he hopes Alpena will do the same.

“It is easier to see established trends that way,” he said.

Alpena Township, which buys water and sewer services from the city, did not respond to The News’ request for data for this story.

In Harrisville, in Alcona County, the average water bill is $496 a year for the city’s 250 residential customers. Residents in Alcona County had an average household income of $39,735, meaning about 1.2% of the typical resident’s house income went toward water.

Harrisville Mayor Jeff Gerhing said the city has been able to keep a lid on water rates and every effort will be made to keep them in check for as long as possible. He said he believes small increases can be digested by residents, as long as they are getting quality infrastructure upgrades and service improvements.

“We have extremely low rates right now, and it is a part of people’s budget, but not a big part of it,” he said. “If we were to raise rates some, I don’t think it would be a deal breaker with people, as long as they have a quality system to serve them and they can count on.”

Rogers City has 1,302 residential customers who have an average water bill of $290 a year, about 1% of the city’s median household income of $46,439.

According to City Manager Joe Hefele, Rogers City’s rates are comparable to or lower than many similar communities in the state, but he said city officials will consider raising them soon.

Hefele said the city needs to do two large water main projects — one on First Street, and another on Lake Street — and Hefele is unsure the projects can move forward without rate increases.

“The pipes we have in the ground don’t last forever, and, if the rates don’t cover the cost to replace them, then you have to consider increasing rates,” Hefele said. “My expectation is we’ll be taking a long look at rates if we have any chance to do these projects. You also need to have money set aside for unexpected or costly projects, or everything will start to fall apart.”

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The cost of water

A look at the share of household income the average resident in each community paid toward water bills in 2019.

Alpena: 1.5%

Rogers City: 0.62%

Harrisville: 1.2%

Alpena Township: N/A

Sources: Local governments.