Water Rates to Increase for Berkley, Huntington Woods residents

Drip. Drip. Drip...

No, it’s not that leaky faucet in the half-bath. For some 850,000 Oakland County residents who rely on city of Detroit water and sewer service, it’s the sound of increased rates they will pay later this year.

“Forty-five of 61 communities in this county have some service, water or sewer or both, from Detroit Water and Sewerage Department,” Oakland County Water Resources Commissioner John P. McCulloch said Jan. 11, “and they’re going to see dramatic increases in their rates.”

When new rates go into effect July 1, local residents who get Detroit’s water will pay, on average, a rate of 7.5 percent more than they did in 2010-2011. Those who are customers of the Detroit sewer system will see an average 11.5 percent rate increase.

That said, Berkley and Huntington Woods, along with nine other member communities of the Southeastern Oakland County Water Authority, are at somewhat of an advantage. SOCWA purchases water 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.

The storage sites can hold up to 30,000,000 gallons of water, SOCWA general manager Jeffrey McKeen said, which is more than the member communities use in an average day.

"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," he said.

However, the member communities still will see some kind of a rate hike.

"We don't know when we're going to get a final number from Detroit, but we do expect to see an increase," McKeen said. "... My hope is that we'll have enough information to do an estimate for our board by mid-February."

The rate increases for Detroit's municipal customers were set to be published at a Tuesday meeting of the Detroit Water and Sewerage Department (DWSD), which was postponed.

Long-standing tensions

The scheduled meeting Tuesday followed by just a week the arraignment of ex- Mayor Kwame Kilpatrick and four co-defendants. The men are charged in a 38-count indictment from a years-long investigation into corruption – much of it centered on the Water and Sewerage Department.

Among Kilpatrick’s co-defendants are Victor Mercado, former head of DWSD, and Kilpatrick’s longtime friend Bobby Ferguson, a contractor whom the government alleges got tens of millions of dollars in rigged contracts for city work – including sewers. Mercardo is charged with forcing legitimate contractors to pay Ferguson as if Ferguson had done work.

McCulloch and other suburban officials have long been at odds with DWSD over sewer and water rates. While Detroit owns the lines and treatment plants that bring water to millions of southeastern Michigan households, most of the system’s customers live in the suburbs. McCulloch and others have for years called for a new, regional authority to oversee the water system.

And though the troubled Detroit department has been overseen for 30 years by a federal judge, the major questions and differences between the city and suburbs over the Detroit system and its charges for waste and water service have gone unresolved. The state Legislature attempted in 2003 to create a new authority with more suburban say over the DWSD rates, but that was vetoed by then-Gov. Jennifer Granholm.

Why the price increases?

Of course, not all water and sewer increases can be blamed on corruption and mismanagement.

Many factors go into how the prices are set, said Director Bruce Jerome, including distance and elevation from the treatment plant, annual water consumption and time of water use.

"People look at, 'We're all customers of the same supplier, so why are the rates different?', " Jerome said. "Well, if they pump it higher and pump it farther, it's very reasonable you would pay more than the guy right next door."

And, McCulloch notes that industry is typically a huge consumer of water. When so many factories have shut down, it means that less water is being paid for, just as population loss means fewer customers. Yet the fixed costs for maintaining that water system do not go down, so those customers who remain must pay a higher rate.

Still, increases instituted by DWSD over the past years, when the U.S. government now alleges corruption was running amok, gives impetus for serious reform, he said.

“The immediate issues that need to be dealt with would be best handled in the federal court,” McCulloch said. “It’s been a huge battle in the courts and the Legislature and now it’s time for a meaningful solution. With the suburbs paying the majority of the bills for this system, these communities have a right to have a voice in the operation.”

But, Detroit City Council president pro-tem Gary Brown, who spoke Tuesday at the Huntington Woods City Commission, stood firm.

"People are making a leap that the recent indictments (of ex-Mayor Kwame Kilpatrick and four co-defendants) are driving rate increases, but that is not the case," said Brown, who went to Lansing this week to lobby against efforts to wrest control of the region's water and sewerage system from the city.

"The Constitution says we have the right to run the system," he said. "That doesn't mean we're not open to dialogue or compromise. We're willing to compromise, but we're not willing to give up the system."

Berkley Patch editor Leslie Ellis contributed to this report.