Detroit water board OKs 2015-16 rate hikes

Charles E. Ramirez
The Detroit News

Detroit — Detroit Water and Sewerage officials Wednesday confirmed an average rate increase of 9.3 percent on water service for Detroit and suburban customers.

The department's Board of Water Commissioners unanimously approved the proposed rates for the 2015-16 fiscal year after a third and final public hearing. The water utility's board also approved a five-year, $1 billion capital improvement program.

Detroit City Council still has to sign off on the new rates, which would go into effect in July.

Customers in Detroit can expect to pay an average of 3.4 percent more for water and 16.7 percent more for sewer service, according to the water utility.

Suburban residents will see rates increased an average of 11.3 percent for water and 1.1 percent for sewer service. Their water bills can be even higher since many communities tack on additional charges to the Detroit water department's wholesale rate to cover their own infrastructure and operating costs.

Systemwide, the cost of sewer service will increase an average of 6 percent, officials said.

The average residential customer in Metro Detroit pays about $70 a month for water and sewer service.

Rates are based on several factors, including annual sales volume and maximum day and peak hour demands, as well as distance and elevation from water treatment plants.

Water costs have two components, which vary by community: a flat monthly amount, plus a charge for every 1,000 cubic feet, or 7,480 gallons, used.

Sue McCormick, the department's director, said the rate hikes are needed to recoup lost revenue.

"The proposed charges are not recovering additional costs of providing water and sewer service, but rather address a fundamental revenue shortfall in the DWSD system due to lower sales," she during Wednesday's meeting.

Michigan's cooler temperatures and wet weather over the past couple of years have resulted in a drop in sales. The department estimates it lost more than $26 million between July and December because of lower water usage, and officials project a $59 million shortfall this fiscal year.

Despite technical difficulties that forced Wednesday's meeting to be conducted without microphones, four water customers and activists called on water commissioners not to raise rates.

Sixto Rodriguez, the subject of the Oscar-winning documentary "Searching for Sugar Man," was one of them.

"I ask the commissioners to not raise the rates," he said. "There's so many people who live here who are below the poverty line and live on fixed incomes. Water is a right and there are industrialists who are making money selling what Mother Nature provides."

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