Water and Sewer Rate increases approved for March 2026
February 11th, 2026Dear Shelby Water and Sewer Users,
The Village of Shelby remains committed to maintaining a safe, well-maintained, and appealing community. Among the most essential services we provide are water and sewer systems—services that must be safe, dependable, and sustainably funded for the long term.
Shelby has been fortunate to maintain consistently safe drinking water. Our system regularly passes all state‑required water quality tests, and we have not experienced a village‑wide boil water advisory in several years. The few localized advisories issued in recent years resulted from power outages that affected booster stations or isolated water main breaks.
Over the past several years, we have made important upgrades to portions of our water system, including a new well, a new booster station, and certain water lines. These improvements have strengthened our infrastructure, but substantial work still lies ahead.
To better understand the financial health of both the water and sewer systems, the Village requested a comprehensive rate study from the Michigan Rural Water Association (MRWA), conducted in November 2025 at no cost to the Village. Our staff reviewed the results later that month, followed by a full briefing to the Water and Sanitation Committee on January 12. A public presentation was then held for the Village Council and community members on January 29 at The Ladder.
On February 2, the Water and Sanitation Committee met again to evaluate the study, review public feedback, and discuss recommended actions. The Committee voted unanimously to recommend adoption of MRWA’s findings. The Village Council approved these recommendations at its February 9 meeting. The changes will take effect in March 2026.
MRWA’s recommendations included the following key actions:
- Adjust water and sewer rates (exact rates at a link towards the end of this post) to ensure long‑term financial stability.
- Implement a 3% rate increase in FY 2027–28, followed by a full rate reevaluation in November 2027 for FY 2028–29 and beyond.
- Fold the existing environmental charge into the Ready‑to‑Serve rate to improve clarity and transparency.
The bottom line: maintaining a safe, dependable water and sewer system is costly. Delaying necessary adjustments would only increase long‑term expenses.
Additional Points of Clarification
- We are not alone.
Communities across Michigan face similar infrastructure challenges. Many are raising rates—and in several cases at higher levels than Shelby—due to aging systems and rising costs of materials, labor, and regulatory requirements. - Growth is helping, not hurting.
Some residents have expressed concern that new homes or additional users are driving up costs. In fact, the opposite is true. More users spread expenses across a larger customer base, reducing the rate increase that would otherwise be needed. Without recent and ongoing growth, the rate adjustments would have been higher. - Water and sewer revenues cannot be used for downtown improvements or any other expense not related to water and sewer.
These funds are legally restricted to water and sewer operations, maintenance, and infrastructure. None of the approved rate changes will be used for the downtown renovation project or any other expense not related to water and sewer. - We pursue grants and low‑interest loans whenever possible.
However, funding availability varies and cannot be guaranteed. When opportunities arise and make financial sense, the Village actively pursues them.
Understanding Our Current Financial Position
- Water Fund balance: approximately $800,000
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- Upcoming replacement of water mains and service lines along S. Michigan and Bennett this summer/fall alone is estimated to cost upwards of $500,000.
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- Much more system work remains beyond that project.
- Sewer Fund balance: approximately $325,000
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- Lagoon dredging, expected within the next ten years, is anticipated to cost $600,000 or more.
These figures illustrate how quickly available funds are consumed and why sustainable, long‑term planning is essential.
I hope this letter provides clear and helpful information about the reasons behind the approved rate adjustments. These decisions were not made lightly. The Village Council recognizes our shared responsibility—not only to today’s residents, but also to future generations who will call Shelby home.
Thank you for your understanding, your engagement, and your continued trust as we work to maintain a safe and sustainable water and sewer system for our community.
More resources related to this matter are below:
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