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Detroit City Council approves water rate hike

Christine Ferretti
The Detroit News

Detroit — A divided City Council on Tuesday narrowly approved an overall 7.5 percent increase in water rates for city residents.

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

President Pro Tem George Cushingberry Jr. and members Scott Benson, Gabe Leland, Andre Spivey and James Tate voted for the rate plan. But President Brenda Jones and members Janee Ayers, Raquel Castaneda-Lopez and Mary Sheffield said no.

Under the approved rates, the department’s average residential customers will see bills rise by about $5.33 per month. It will apply to all bills rendered on or after Aug. 1.

During a discussion at the table earlier Tuesday, some council members said they aren’t convinced that the department has done all it can to bring in more money or ensure that future rate increases wouldn’t continue to climb.

“Every year, we say the water rate increase is necessary,” Jones said. “I am not convinced that the water department is doing everything they can to bring in the revenue...”

“Until I see a change, I cannot continue to hit people on increases,” she added. “I’m sorry. We have to do our part as a city.”

Jones made the comments after the council’s legal staff presented findings from a report it generated Monday.

The Legislative Policy Division concluded that the rate increase “appears to be necessary to mitigate recent structural revenue shortfalls, and help provide sufficient revenue for a highly capital intensive operation.”

Detroit’s Chief Operating Officer Gary Brown has said without the increase, the Detroit Water and Sewerage Department would surely face layoffs.

Brown said that since July 1, the water department has been losing out on $75,000 in revenue each day without the rate increase being approved.

Brown also reiterated Tuesday the administration’s stronger commitment to studying ways to bolster a new water assistance fund for the city’s low-income residents and to honor the council’s request of evaluating the feasibility of a water affordability plan for Detroit.

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

A “blue ribbon” panel will also be assembled to study avenues to sustain the water assistance fund for low-income residents in Detroit and the suburbs, Brown said.

But Ayers said she doesn’t think that an elite group of consultants will be able to achieve anything substantial.

The water department, she noted, has talked about the potential for job cuts, layoffs and infrastructure needs. Also, water usage could drop even further going forward and future rate increases could be even higher, she said.

“We are talking about putting a Band-Aid on the Grand Canyon,” she told Brown. “There’s nothing solidly presented that says we’re on the road to fixing it. I don’t feel we are doing our best at really putting a solution forward. It’s just revolving bad debt and the same problems...that’s where I am.”

Castaneda-Lopez on Tuesday added that she’s concerned about the administration’s stance on affordability.

“If there’s not a willingness to have a conversation around affordability, than it’s difficult to discuss rates,” she told Brown.

Brown countered that he’s open to discussions on affordability and to improving the assistance fund.

“I hope you believe that I’m sincere and genuine in working with this body to find a more robust (assistance) program to help more people than we help today,” he said. “I haven’t ruled out anything.”

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

Brown told council members Tuesday that many things need to be accomplished by Jan. 1 before new Great Lakes Water Authority is fully stood up. The lease has been signed, but it doesn’t take effect until they have bond holder consent and other terms satisfied.

“If it doesn’t get done by Jan. 1, it all falls apart,” Brown said.

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.

Rejecting the new rates could have triggered an extension of state oversight or result in other sanctions, officials said.