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Water, sewer rates increase in Clinton Township

By: Nick Mordowanec | Fraser - Clinton Township Chronicle | Published October 7, 2015

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CLINTON TOWNSHIP — Clinton Township residents might want to save a few more bucks every month to cover their water bills.

That’s because the Township board of trustees unanimously, yet reluctantly, approved a rate increase at the discretion of the township’s finance department.

Water usage charges will increase from $2.55 per unit to $2.87, while sewage usage charges will increase from $4.79 per unit to $5.35.

Excluding refuse, the minimum bill to residents is increasing from $45.31 per month to $50.63 per month — an overall 11.7 percent increase.

The Detroit Water and Sewerage Department’s fixed monthly cost is increasing from $3.34 to $3.76.

The cost to the township took effect in July, although residents will first see rate changes based on October usage on their November bills. In that three-month deferment period, Clinton Township customers will have saved $15.96.

At the township’s Sept. 21 board meeting, Assistant Finance Director Mary Hein explained that the cost of water purchased from the Detroit Water and Sewerage Department, or DWSD, increased by 11.9 percent.

The increase is in part an effort to absorb a revenue shortfall that resulted from the DWSD recently losing Flint as a wholesale customer, while other aspects include lower individual demand from customers who have used less water in recent years due to cool, wet summers.

The DWSD’s operating cost increases are also part of the equation.

“When we’re determining the rate increases to be proposed, we take into consideration a number of factors, including the increased cost of water and sewer treatment and operations, payments that are due and the capital needs of the water and sewer fund,” Hein said.

Numbers increased across the board, Hein explained.

For sewer treatment, the township will continue to be billed a fixed monthly charge to operate the system. That number will increase from $780,000 per month to $810,000 month, or 3.9 percent. A fixed charge for operations and maintenance will increase from $9,600 per month to $20,000 per month — a 108 percent increase primarily due to legal fees and improvements at the township’s northeast pump station.

The Macomb County Wastewater Disposal District operation and maintenance charge has risen from $94,590 per month to $152,000 per month — a 61 percent increase to make updates to the system and build an emergency reserve fund.

Sewer rates for the township have increased from $884,277 per month to $982,519 per month. It’s an overall 11 percent increase for sewer treatment, with a total yearly cost of $12.3 million that consists of all monthly costs.

“And that’s fixed (costs),” Hein said. “Whether nothing happens or we don’t use it all, we’re paying $12 million. There’s no variable component to that.”

The Water Department, which will experience a 3.4 percent increase, has annual operating expenses that include utilities, personnel costs, professional fees, insurance, repairs and maintenance. As of March 31, 2015, the total outstanding debt was $50.8 million: $14.6 million in township-issued debt and $36.2 million from Oakland and Macomb drainage districts. The current fiscal year’s debt payments total $4.5 million.

The township also approved a $5 million state revolving fund, or SRF, loan to make payments for the next round of administrative consent order, or ACO, projects that are currently in progress. Capital needs funds are about $11.5 million in the current fiscal year, including $11.2 million for maintenance and improvement projects and $350,000 for aging equipment.

SRF loans have partially funded $6.4 million worth of projects. It’s paramount that the township annually has money available for necessary projects.

Clerk Kim Meltzer asked how rates would be affected if Flint became a DWSD customer once again, and at this stage, nobody knows the answer.

“(Detroit) determines what the revenue is that they need to operate the system,” Hein said. “They look at all their customers and say what they think each person will use, and they allocate that cost. A big chunk they were expecting to get was from the city of Flint, and when that went away, everybody else has to absorb it.”

Public Services Director Mary Bednar said that about 60 percent of the township’s bill from Detroit is a fixed cost. Since Flint was part of that 60 percent total, it would make sense for them to take on part of that percentage. Still, it’s unknown.

Bednar said there are numerous unknowns floating around, including: how the Great Lakes Water Authority situation will unfold; rumors that Detroit, which runs on a 60 percent fixed, 40 percent consumption system, may ultimately go 80-20; and whether Macomb County will go 100 percent fixed itself.

Also factoring into the equation is another set of ACO projects scheduled for 2016, as well as a Detroit water contract based on peak demand that is experiencing decreased water consumption.

“For us to start making drastic changes to our billing, we need to have these bills in the air get better answers,” Bednar said.