Detroit City Council rejects water, sewer rate hikes
The City Council rejected water and sewer rate hikes proposed by the water department after learning the average city consumer would pay about $64 more a year.
Residential customers in the city would have seen an overall average increase of 7.5 percent, said Gary Brown, the city's chief operating officer. That amounts to an increase of $5.33 per month, according to average consumption.
Now, water officials are expected to meet Wednesday to figure out how to address an estimated $27 million shortfall, Brown said. The council must approve rate hikes.
Despite assurances from Detroit Water and Sewerage Department leaders that its budget has held the line and a rate hike was needed to compensate for revenue shortfall tied to shifts in water use, council members said they worried how the move, touted as modest, would affect some residents already having trouble paying water bills.
"If people can't pay what it is now, without the ... increase, then what do we expect is going to happen going forward?" Councilwoman Janee Ayers asked. "I'm not seeing anything that is making me feel comfortable in saying: 'Yeah, let's hike the rates up.' "
Currently, the average Detroit resident purchases 600 cubic feet — or 4,500 gallons of water — each month. The total water and sewer bill for the average customer is $70.67 per month, or $848 per year.
"We know that this city is full of people who just cannot afford to pay a $90 water bill, unfortunately, every month," Council President Brenda Jones said before the 6-2 vote.
Members voted after hearing mostly negative comments from residents and activists about the increases.
Tawana Petty said some Detroiters already are facing shutoffs. "Water is a human right. You can't live without water," she told the council. "Raising the water rates right now is inhumane and we can't do it."
The city was set to resume water shutoffs in late May for delinquent residential account holders in Detroit. DWSD has estimated the city has 20,000 to 25,000 delinquent residential accounts. Shut-off comes into play for accounts at least 60 days late or owe $150 or more.
Shutoffs in the city last year spurred protests that drew international attention. The city was set to resume water shutoffs in late May for delinquent Detroit residential accounts. DWSD has estimated the city has 20,000 to 25,000 delinquent residential accounts. Shut-off comes into play for accounts at least 60 days late or owe $150 or more.
Meeko Williams, chief director of the Detroit Water Brigade, a group working to bring emergency relief to families facing water shutoffs, said Tuesday night that the city faces "extreme poverty where people are going without water." . "We have heard a lot of things from the Detroit water department with no proof, data or even statistics to show ... how these rates increase affect our city," he said.
Tuesday's hearing and vote was for city rates, not suburban water rates.
In March, DWSD's Board of Water commissioners approved proposed rates that included an average hike for suburban customers of 11.3 percent for water and 1.1 percent for sewer services.
Detroit's proposed rate increases, as well as increases proposed for suburban wholesale customers, are designed to address a revenue shortfall resulting from a decline in sales and certain cost allocation changes.
Sue McCormick, director of DWSD, said the situation "is not unique to Detroit." She also noted that service, including addressing main breaks faster, has improved.
Brown said a rate hike was needed since with lower volumes, "the only way to react to that is either to reduce staff or reduce costs." Water officials were not committed to cutting staff, he added.
Karl Sturdivant was among the Detroiters attending the meeting who supported rejecting a rising rate. "I don't think I should have to have a rate increase at all," he said. "The water (bill) is high enough as it is."
Approximately 3 percent of the water increase reflects each community's share of making up the shortfall created by Flint's departure from the Detroit water department, according to documents outlining the rate increase plan.
The rate decision was expected after the board for the new regional Great Lakes Water Authority voted earlier this month to lease the system from the city for $50 million a year.
The board passed two leases — one for Detroit's water system and one for its sewer system — after months of federal mediation.
Customers still will receive water and sewer bills from their communities, but those municipalities will buy water from the authority, not Detroit.
As soon as Jan. 1, the Detroit water department, the region's main service provider for more than 100 years, will be run by the new entity.
Under the lease terms, the department — as one of the authority's wholesale customers — will serve Detroit residents. The authority will provide service to about 3 million customers in the suburbs, officials have said.
The deal also establishes a $4.5 million fund for residential customers who have trouble paying their water bills. The fund is expected to replace several others, including the newly revised Detroit Water Fund.
The way water rates are calculated are expected to change, officials have said.
Now, officials say, the amount communities pay the authority will be based on the 24-month average of the two most recent years' volume of actual use and a greater fixed-cost element than in the past.