Politics & Government

Hearing Set on Proposed Water Rate Hike

Declining population, fewer business and debt are driving Detroit Water and Sewerage Department to raise fees, officials say.

A public hearing has been set for Feb. 23 on water rate increases proposed by the Detroit Water and Sewerage Department earlier this week as tensions continue to  simmer between the city and suburban residents over the region's water supply.

While many blame a culture of corruption among Detroit's previous administration for the ballooning costs, local officials say the real reasons are even broader in scope. Among them: declining consumption, less industry, long-term debt and an uptick in conservation practices.

Because the costs of maintaining the water system are fixed, rates for the remaining consumers go up, officials said.

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"They're proposing, for us, a 17.9 percent increase," as of July 1, said Jeffrey McKeen, general manager of the Southeastern Oakland County Water Authority, of which Berkley and Huntington Woods are members.

McKeen said SOCWA is working to set rates for its member communities on the assumption the DWS proposal will be approved. He said the next steps in the approval process include:

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  • The proposal going before the Board of Water Commissioners, which oversees the Detroit Water and Sewerage Department, for approval.
  • A public hearing will be held at 11 a.m. Feb. 23 at the Water Board Building at 735 Randolph in Detroit.
  • The Detroit City Council, which has ultimate authority on the matter, will consider the water rate proposal at 5 p.m. March 10 at the Coleman Young Municipal Center at 2 Woodward Ave.

Berkley, Huntington Woods hikes expected to be lower

However, McKeen said, SOCWA member communities are expected to see a less-drastic rate increase than other suburbs come July 1.

SOCWA purchases water wholesale from Detroit and stores it at sites throughout its communities, which also include Beverly Hills, Bingham Farms, Birmingham, Clawson, Lathrup Village, Pleasant Ridge, Royal Oak, Southfield and Southfield Township.

"Because we've got the storage system, we can buy at an almost constant rate, taking out the swings that most communities have, resulting in a lower rate from Detroit," McKeen said.

In addition, he said, Bloomfield Township is set to begin purchasing water from SOCWA this summer and will absorb some of the increased costs.

Once SOCWA has set its rates for member communities, it will be up to the cities to set water rates for residents. Each community, just like SOCWA and the Detroit Water and Sewerage Department, must factor in costs associated with maintaining its part of the water system when rates are set.

"It's hard to say at this time what the rate increase will be, but it will probably be less than the Detroit increase, so stay tuned," Huntington Woods City Manager Alex Allie said. "The way we spread it out, the average cost to a customer per month is $30. So, even an 8 to 10 percent increase isn't a terrible increase. But, for people living on fixed incomes, it can be hard to manage.

"It's still disconcerting," he said.

Berkley also is working to set its rates, which likely will go to the City Council for approval in May, said Finance Director David Sabuda.

"It costs to maintain the system and equipment," Berkley City Manager Jane Bais-DiSessa said. "As (suburban) communities grow and the system ages, you have to pay to replace it.

"One of the things I would like to see is for outside communities that buy water and sewer services to have more of a voice. Not just a voice, but a part in the decision-making process," she said. "That doesn't mean the rates will go down."

Deep-seated issues drive rate increases

Allie acknowledged that residents are upset about the proposed rate increases, but said Detroit is facing significant challenges – chief among them declining consumption, less industry and federally mandated debt payments.

"Detroit has some pretty extensive long-term debt," related to changes to both the water and sewer systems that were required by the federal government, Allie said.

Sabuda explained that the changes were required under the 1972 Clean Water Act.

"Costs go up because people want a clean environment," he said. "That costs money and you have to pay to fund federal mandates."

In addition, fewer residents and less businesses mean fewer dollars flowing in to fund the system, which needs maintenance and repairs regardless.

"The vast majority of the increase is because they're selling less water than they anticipated," McKeen said. "And, unfortunately, most of Detroit's costs are fixed.

"When you have fixed costs, you have to raise rates to cover them," he said.

Changes in consumer habits also have played a part in the decline in consumption, McKeen said, including: More people using high-efficiency showers, fixtures and devices, along with less water being used on residential lawns.

Corruption is "probably a really, really small part of it," he said.


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