New Water and Sewer Rates Effective April 1, 2014

Release Date: March 31, 2014

Bloomfield Township currently purchases water from the Southeast Oakland County Water Authority (SOCWA) and sewage disposal services through the Oakland County Water Resources Commissioner (OCWRC). Detroit Water and Sewerage Department (DWSD) sells water and sewer services to both of these entities. Costs for these services are solely controlled by those entities and their cost increases are passed directly along to the communities that they serve. We take their rates and add the Township’s cost to operate our water and sewer systems to determine the rate to be charged for our customers based on the volume of water that is estimated to be consumed.

On July 1, 2011, Bloomfield Township became a customer of the Southeast Oakland County Water Authority (SOCWA). Since that time we have been able to avoid costs of $5.4 million for our customers as opposed to staying directly with DWSD and passing on their increases to our customers.

However, the 2014-15 fiscal year water and sewer operations budget is slightly more than fiscal year 2013-14 due to increase costs from SOCWA (4%), OCWRC (6.5%) and the department’s operations (3%). Additionally there has been an increase to meet the debt obligations and depreciation costs for the overall water and sewer systems. Following are the new water and sewer rates that will become effective on April 1, 2014.

WATER CHARGES

Water Retail Rate:
SOCWA has passed along a 4% increase to the Township. In figuring our total overall cost, including operation and maintenance as well as depreciation, the retail water rate was increased by 3.29% or $0.15 per 1,000 gallons. This is an increase from the current rate of $4.56 per 1,000 gallons to $4.71 per 1,000 gallons. Overall, the variable water rate consists of 76% for water paid directly to SOCWA, 17% of the rate is paid directly to the Township for operations and 7% of the rate will be dedicated to the depreciation of the Township’s water system.

Water - Ready to Serve Charge:
The fixed rate will continue to be applied to the Township’s operation and maintenance costs. It is a “ready to serve” charge that all water customers connected to the water system will pay regardless of how much water they use per quarter. This includes the maintenance and installation of the pipes, hydrants, valves, pressure reducing valves, tank and pumps that provide the water to each customer in the system. These costs exist independent of the volume of water sold to the Township customers. These costs have increased approximately 3% due to system improvements of valve and fire hydrant replacements. The fixed cost was increased by $3.00/quarter, from $14.00/quarter/customer to $17.00/quarter/customer. This increase is necessary to sustain the monthly operating expense in lieu of raising the variable rate.

Water Debt:
The debt charge was increased by $3.00/quarter, from $8.00/quarter to $11.00/quarter, to cover the 2014 annual debt payments for the bonds that finance the capital improvement projects.

SEWER CHARGES

Sewer Retail Rate:
The Township bills its customers for sewer based on their water consumption. Historically, sewage flows reach a maximum of over two times the water usage during the winter season, and then drop to about half the water usage during the summer season. The three-year average annual sewage flow represents approximately 15% more than the water usage. The new OCWRC sewer rate is 6.5% higher than the current rate. This new OCWRC rate is based only on the projected sewage flow volumes and is not related to the rate that Township customers are billed based on their metered water volumes. After incorporating the differential flow volumes from water meter readings, our sewer rate will increase by 3.9%. This rate will be charged based on water consumption. The 2014 rate was increased by $0.24/1,000 gallons to $6.35/1,000 gallons with 73% of the cost for sewerage paid directly to OCWRC, 16% of the rate paid directly to the Township for operations and 11% of the rate dedicated for the depreciation of the Township’s sewer system.

Sewer - Ready to Serve Charge:
The fixed rate is to continue to be applied to the Township’s operation and maintenance costs. It is a “ready to serve” charge that all sewer customers connected to the sewer system will pay regardless of how much they use the sewer per quarter. This includes the maintenance of the pipes and pumps that transport the sewage from each customer into the OCWRC system. These costs exist independent of the volume of sewage that is generated by Township customers. The fixed cost was increased to $20.00/quarter/customer, an increase of $3.00/quarter. Continuing this fixed charge for sewer customers is necessary to sustain the monthly operating expenses in lieu of raising the variable rate.

Sewer Debt:
The debt charge remained the same, $8.00/quarter to meet the annual payback of bonds.

Sewer Only Customers:
Over two hundred properties in the Township have well systems, but are connected to the sanitary sewer system for means of sewage disposal. These properties pay a flat rate based on the average cost for all Township sewer customers per quarter. The charge for an unmetered sewer connection is proposed to also increase 3.9%, from $208.00 per quarter to $216.00 per quarter, plus the $20.00 fixed charge for a total of $236.00. These sewer only customers are also allowed the option of placing a water meter on their well connection and paying for sewer based on water consumption, at $6.35/1000gal, just like other customers connected to the Township’s water supply.

Overall, the average residential water and sewer customer, that uses 140,000 gallons a year, will be paying $90.60 a year more, a 4.63% increase, for water and sewer services.