OWOSSO — A sweeping $207 million investment in Owosso's aging water and sewer infrastructure will reshape the city's utilities for decades — but it comes at a steep cost for every household and business on the system. Water and sewer user fees are expected to triple in the years ahead to fund the project, a reality city officials say is unavoidable given the condition of pipes and treatment facilities that in some cases date back more than a century.

The overhaul encompasses upgrades to the wastewater treatment plant, replacement of aging water mains throughout the city, and improvements to lift stations. City officials have been candid that the system was built for a different era, and that continued deferred maintenance is no longer a viable option.

'These are not optional upgrades,' City Manager Nathan Henne told the city council. 'We are talking about systems that protect public health and the environment. The cost of not acting is ultimately higher than the cost of acting now.'

But the projected rate increases have generated significant friction. In May 2024, the Home Builders Association of Michigan filed a lawsuit in Shiawassee County Circuit Court challenging the city's new water and sewer tap-in fee structure, arguing the new fees — which increased new connection costs dramatically — represent an unconstitutional tax under Michigan's Headlee Amendment rather than a proportional cost-recovery fee.

'Fees for these connections have to be proportional to the impact and cost of bringing new users onto their system,' said Bob Filka, CEO of the Home Builders Association of Michigan. 'Anything more than that is a tax and unlawful.'

The lawsuit adds legal uncertainty to what is already one of the most significant infrastructure decisions in Owosso's recent history. City officials say the project is moving forward regardless, but the litigation could affect how costs are allocated between new development and existing ratepayers. Public comment sessions are expected in early 2025 to walk residents through the specifics before a final financing vote.

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