Council to vote Tuesday on higher water rates

Christine Ferretti
The Detroit News
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Detroit — The City Council on Tuesday is expected to take another vote on a proposed water rate increase for city residents.

The body initially voted down the plan in June, a move the city’s administration says left a $27 million hole in the water department’s budget for the current fiscal year.

Under the proposal, the department’s average residential customers would see their water bill rise 7.5 percent, which amounts to an increase of about $5.33 per month, or $64 a year.

On Monday, Detroit’s Chief Operating Officer Gary Brown made a stronger commitment to studying ways to bolster a new water assistance fund and honor the council’s request of evaluating the feasibility of a water affordability plan for Detroit.

But Brown warned a council subcommittee that staffing in the Detroit Water and Sewerage Department will suffer greatly without the rate bump.

“Without this increase, there will be layoffs for sure,” Brown said during Monday’s Public Health and Safety committee. “Without a doubt, I can’t make up $27 million out of a $79 million operating budget.”

Since July 1, the water department has been losing out on $75,000 in revenue each day without the rate increase being unapproved, Brown said after the meeting.

The subcommittee voted to move the request to the full council Tuesday without a recommendation to deny or support it.

Along with the proposal, Brown said, will be a signed letter of intent to bring on Massachusetts-based utility expert, Roger Colton, who formerly worked on an affordability concept for the city, to serve as a consultant for council members. Colton would be one of several on a “blue ribbon” panel being assembled to study the prospect of a water affordability plan and avenues to sustain the water assistance fund for low-income residents in Detroit and the suburbs, Brown said.

“I think working together we can find a way to make the (assistance) program more sustainable and more robust and put it in a position to be able to help more people,” he said. “We know the dollars that are there now are not enough.”

Brown said his office is engaging potential panelists from across the country for the working group. He expects it would begin to convene in September.

Councilman Scott Benson, who chairs the Public Health and Safety committee, asked Monday that the group turn over an implementable plan within nine months.

“I wanted to give them a drop-dead date that they have to have something to this body,” Benson said. “It’s less than a year; it’s more than six months. It actually gives them time to put something together.”

Brown says he’s hopeful the council will approve the new rates and begin immediately helping the city’s poor.

The city’s bankruptcy plan directed Detroit to lease its water and sewer department’s assets to a regional authority by June 14.

Under the 40-year lease, the authority will spend roughly $50 million per year toward pension costs and a $4.5 million fund to help struggling customers pay their bills.

There are a number of conditions that have to be met for the authority to be fully executed, including bond holder consent, Brown says.

“If this City Council wants to have an immediate effect on helping poor people then they will approve the rate increase, because the rate increase will assure bond holders a level of comfort to approve the authority,” Brown said.

Without the authority, he added, you don’t have the assistance fund, $2 million of which would be immediately dedicated to help the city’s most vulnerable population.

The council voted 8-1 earlier this month to reconsider the rate proposal. President Brenda Jones voted no.

Council members initially voted 6-2 against the hikes in June. Mainly over concerns that residents already having trouble paying their bills would be affected.

Brown has said that no vote went against the council’s unanimous support in March of the city’s fiscal year budget. That budget included revenue for the water department, he said.

Rejecting the new rates could trigger an extension of the city’s state oversight or result in other sanctions, officials say.

Officials have said the increase is tied to declining water usage and sales and the departure of Flint as a wholesale customer in the DWSD system.

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