On March 23, 2015 the Township Board of Trustees approved rate increases in water and sewer usage effective April 1, 2015. 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). Both of these agencies are wholesale customers of the former Detroit Water and Sewerage Department (DWSD) soon to be known as the Great Lakes Water Authority (GLWA).
The Township’s water and sewer system began with the construction of the County’s sewer system in 1958 and water was extended later by DWSD in 1964. The Township originally had 3,300 water customers in 1965. By 1995, there were over 14,000 customers and in 2015 there are now over 15,600 customers. In the early years, the system expanded rapidly with new developments and was supported largely by connection fees for new customers being added to the system. Development and system expansion has greatly decreased in the past twenty years and the system now largely is being funded by the customer usages. These usage charges have historically relied heavily on the customers with high water usages to generate the revenue needed for the system. In addition to a decline in development, water volumes have also shown historic declines. Water volumes are dependent on customer usage and seasonal precipitation. Since 2008, Bloomfield Township’s consumption has dropped nearly 25% and the volumes continued to drop in 2014. This decline mirrors the water use trends of all the customers on the DWSD regional system.
The water and sewer usage rates are billed per 1000 gallons based on the water volumes read on the customer’s water meters. These rates consist of four components: 1) commodity charges, 2) operating expenses, 3) depreciation, and 4) capital projects.
Commodity Charges - The commodity charges are the largest component,
making up 63% of the rates. These are the pass through costs from
SOCWA for water and from the OCWRC for the sewage treatment. Both
agencies are wholesale customers of DWSD and their costs consist
largely on what DWSD charges them.
In addition to the usage rate components, there are flat charges, billed per customer, per quarter. These are the Ready To Serve (RTS) and Debt Charges.
Ready To Serve - In
2009, DWSD began applying a monthly flat rate to their water and
sewer charges regardless of what water volumes were used. DWSD had
determined that 90% of their overall costs do not vary with the
water usage. This is known as the “Ready To Serve” (RTS) charge
which is widely used in the utility industry for charging customers
for the stationary cost of being connected to the system. This helps
to cover some of the costs of the Township’s operating expenses that
do not vary with water usage. This includes services such as service
appointments, utility staking, meter replacements, engineering,
system repairs (water main breaks) and after hour emergency calls.
It is a fair way to spread the costs to provide service to all of
our customers in an equitable manner.
In determining the 2015 water and sewer charges, changes in the
Township, such as the decrease in water volumes and a slowdown of
new development had to be considered. Also, in looking forward, a
mechanism for sustaining the sufficient revenue to cover the day to
day expenses of operating a water and sewer system, whether water is
used or not, needed to be established. Relying solely on water usage
would have placed the burden on the few customers with very high
water usage and would be largely dependent on the unpredictable,
Unfortunately, increasing the rates is necessary to best recover
the costs of the system expenses along with collecting sufficient
funds for ongoing and future capital system improvements. Should you
have any questions about these rate changes, please contact the
Department of Public Works at 248-594-2800.