DWSD sewer and water rates move toward approval

A recent stipulated order handed down by a federal judge won’t impact current proposed changes in Detroit water and sewer system service rates now working their way toward final approval and implementation on July 1, according to an Oakland County official.

John P. McCulloch, Oakland County’s water resources commissioner, said although the judge’s recent order revises oversight of the Detroit Water and Sewerage Department (DWSD) and water and sewer system rate-setting, the order’s provisions won’t take effect until April 1.

“The (rate-setting) changes will take effect in the next rate cycle,” McCulloch said. “A lot of work goes into that, and it would be asking too much (to scrap current proposed rate changes and start over again), so the judge is letting the current process take its course.”

Work on developing proposed rates for the 2011-12 rate season began in late September.

Under provisions of the Detroit City Charter, the mayor of Detroit appoints a seven-member Board of Water Commissioners — with at least four members being Detroit residents — to select a DWSD director, oversee department operations, and set rates for water and sewer service. The water board includes a resident of Oakland, Wayne, and Macomb counties appointed by the city’s mayor.

Under a stipulated order issued early last month by federal Judge Sean F. Cox, the DWSD will be governed by a seven-member board similar to the one in place; however, the suburban counties will be able to choose their own representatives. All seven members of the water board must have at least seven years of experience in a regulated industry, a utility, engineering, finance or law.

Cox’s order calls for the water board to have a staff of three employees, including an attorney, an expert in finance, and a technical expert versed in engineering, water or wastewater operations.

In addition, the judge’s order states a super-majority vote (five of seven water board members) will be needed to set service rates.

Detroit’s existing Board of Water Commissioners met last week to review proposed water and sewer rates for the nearly 130 southeast Michigan communities served by the city’s water and sewer systems. The proposed rates, which would take effect on July 1, will be the subject of a Thursday, March 10 public hearing before the Detroit City Council, which is then expected to grant final approval for the new rates.

On average, suburban wholesale water rates are expected to rise by 8.9 percent, with suburban wholesale sewer rates increasing an average of 10.2 percent. Wholesale rates are those charged to customer municipalities, as opposed to retail rates charged to individual customers.

In the lakes area, Commerce Township’s wholesale fixed rate would rise from $23,158 per month to $62,043, and its commodity rate would fall from $28.61 per thousand cubic feet of water (MCF) to $27.88 per MCF. Walled Lake’s wholesale fixed rate would increase from $5,303 per month to $10,896, and its commodity rate would decline from $16.76 per MCF to $14.17. West Bloomfield Township and Orchard Lake Village’s wholesale fixed rate would move from $70,468 per month up to $188,357, and its commodity rate would fall from $22.05 per MCF to $21.28. Wixom’s wholesale fixed rate would increase from $13,765 per month to $37,485, and its commodity rate would drop from $14.83 per MCF to $13.38 per MCF.

Fixed monthly charges for wholesale sewer customers would rise from $714,069 per month to $1,418,021 for communities served by the Oakland Macomb Interceptor District, including Waterford Township; while commodity charges would fall from $12.30 per MCF to $11.68. Fixed monthly charges for wholesale customers served by the Evergreen-Farmington district, including West Bloomfield and Orchard Lake, would move up from $274,262 per month to $698,484; while commodity charges would drop from $11.54 per MCF to $10.67.