Cleveland City Council Considers Water Rate Hike For 2024

Cleveland City Council is considering a rate increase for city water department customers. If approved, the proposed 3.5 percent increase wouldn’t take effect until 2024.

The rate hike would be to cover operations and maintenance, as well as some capital improvements, as recommended in an analysis of the water department’s financial stability and improvement plans by global architecture and engineering firm Stantec.

Cleveland’s water department has not raised rates in six of the last nine years.

Council members requested more data and time to review the information before approving the proposed changes. Other utility providers also are planning to raise rates, said Councilman Michael Polensek, including the Northeast Ohio Regional Sewer District. Those additional costs can add up for consumers, he said.

“Cleveland Water has been a tool to keep family and businesses [in the city]. But there are too many other factors today that we’re dealing with that affect them,” Polensek said.

Looking to other cities to see what they’re paying overall could inform how to approach the need for increased revenue, Polensek said.

The proposed rate increase would have a larger impact for residents living at higher altitudes outside of Downtown Cleveland, as rates increase based on location.

Councilman Charles Slife suggested a smaller rate hike for Cleveland residents could help attract people to those neighborhoods.

“Having a zero percent increase or a smaller increase for the City of Cleveland,” Slife said, “and then a larger increase in outlying suburban areas, where knowing the region, there does tend to be higher incomes, but also based on the map, higher water usage.”

But the consultants recommended a consistent raise for all residents.

“We want to facilitate the financial plan through the implementation of water rates that fully recover the cost of providing service,” said Stantec’s David Hyder. “We want to equitably allocate those costs based on the users of the system, and then we want to provide affordability assistance as appropriate.”

Revenue requirements for the year 2021 amount to around $339 million, Hyder said, and will increase to $347 million by 2024. The analysis also projects a drop of about 1 percent in usage per year through 2024.

“We would start eating into the cash balance, and that would continue through 2024, ’25 and ’26,” Hyder said.

Raising rates starting in 2024 would prevent any one-time spikes and account for changes in usage revenue requirements, Hyder said.

This story has been updated to clarify Councilman Slife's remarks.