Water and Sewer Rates
Update!
February 2008 Special Newsletter Edition: Water Rate Increase
Bloomfield Township is a community wholesale customer of
the City of Detroit's water supply and is a community member
of Oakland County's Evergreen-Farmington Sewage Disposal
System for sewage services.
Water Costs
The City of Detroit charges the Township for water at a
rate determined by the City of Detroit's cost to safely treat
and transport the water to the Township's water distribution
system. The water rate is based upon the following
criteria:
- The Township's average daily water use
- The Township's water use during high or peak demand
periods
- The distance and elevation that the water must be pumped
to reach the Township
- The number of Detroit's master metered connections to
the Township's water distribution system for maintenance
Components that determine the City of Detroit's cost to
meet the Township's criteria include the labor, equipment,
materials and utility costs for the system's maintenance and
operation. Additionally, the capital improvement costs
for system upgrades as well as costs associated to meet state
and federal mandates to assure the water is safe to drink are
included.
Sewer Costs
The Township is a second-tier customer of the City of
Detroit for sewer services and the sewer rate is established
by Oakland County. The County charges the Township for
sewer based upon the volume of metered water purchased.
Along with the standard operating and maintenance costs the
sewer rate also varies upon the cost associated to the
treating and disposing of water seepage during dry and wet
periods (rainfall). Capital costs necessary to implement
pollution prevention measures as mandated by the USEPA are
also included.
Customer Retail Rates
The retail rates for the Township customer include these
water and sewer costs as well as the operating expenses
necessary for the Township to maintain the system. In addition
to the annual operating expenses, the retail rate includes a
component for capital improvement and system replacement
costs. The sewer rate also includes the operating expenses for
the County's combined sewer overflow (CSO) retention basin and
the cost associated for the Township's sewer rehabilitation
program as mandated by State and Federal regulations.
The Water & Sewer Division annually reviews the department
operations to assure sufficient funds are collected to cover
these increasing costs. Historically, the Township adjusts the
retail rate proportionally with these rising water and sewer
costs.
Currently, the Township's portion of the retail rates for
department operation, maintenance and capital expenditures is
approximately 24% of the total retail rate. This means that 24
cents of every dollar of water purchased by a water and sewer
customer stays in the Township to meet these operational and
improvement expenses.
Residential Water and Sewer Rates
Water and sewer rates are established by Ordinances
approved by the Township Board. Public notice is given to the
Birmingham Eccentric prior to the final ordinance adoption. In
addition to the water and sewer rates, sewer customers are
charged for sewer debt based upon each residential equivalent
unit. This charge is applied towards the long-term debt of the
Township's sewer system.
The new rates as of October 1, 2008 for water and sewer
services are as follows:
- Water $3.90 per 1000 gal
- Water Debt $8.00 per quarter
- Sewer $3.27 per 1000 gal
- Sewer Only $120.99 per quarter
- (Sewer debt remains$ 5.00)
Bloomfield Township takes great strides to provide and
maintain quality services for our residents at the most
affordable costs possible. This is reflective with the
Township’s water rate. Bloomfield Township is a community
wholesale customer of the City of Detroit's water supply
whereas the City of Detroit charges the Township their cost
necessary to treat and transport the water to the Township's
water distribution system.
Subsequently, the Township
has expenditures, such as labor, material, utilities, fuel and
equipment costs, necessary to operate our own distribution
system to deliver drinking water safely to our residents. The
retail water rate for the Township customer includes these
operating costs as well as a component for the system's
capital improvement and replacement costs. The long-term
capital improvement program involves replacing the system's
aging water pipes and improving the system for reliability.
Below is the breakdown of Township's Water Rate for the
last several years:
| RATE COMPONENT |
July 1, 2006 |
April 1,
2007 |
Oct. 1, 2008 |
| Detroit Water Supply |
$2.41 |
$2.66 |
$2.98 |
| System Operations |
$0.74 |
$0.79 |
$0.92 |
| Capital Improvement |
$0.15 |
$0.15 |
$0.00. |
| RETAIL WATER RATE |
$3.30 |
$3.60 |
$3.90 |
The retail water rate is reviewed annually to assure
sufficient funds are collected to cover all of the Township’s
expenses. Historically, the Township adjusts the retail rate
proportionally with these rising water costs from the City of
Detroit. Presently, the portion of the retail rate for the
Township’s operation, maintenance and capital expenditures is
less than 24% of the total retail rate. This means that
approximately 24 cents of every dollar of water purchased by
our customer stays in the Township to meet these operational
and capital improvement expenses.
The Bloomfield Township’s share of the retail rate is one
of the lowest in the region of the communities on the City of
Detroit’s water supply. This shows how prudent the Township
Administration and Board of Trustees has been in managing the
water funds for the community.
Water Rates FAQs
Water rates for Bloomfield Township residents will increase
in 2008. The rate increase is largely due to rising costs
passed on by the Detroit Water and Sewerage Department (DWSD).
In an effort to help residents understand the circumstances
behind this, the Township administration wrote a four-page
newsletter and mailed it to each residence in February 2008.
The newsletter:
summarizes the background of the Township’s water
system,
explains and evaluates possible alternatives for sources
of water (other than the DWSD),
breaks down the Township’s water rate charges,
describes the Township’s efforts to contain costs, and
give tips for what residents can do to economize.
You may link to that newsletter by clicking the following:
February 2008 Special Newsletter Edition: Water Rate Increase
This section of the website will summarize some of the
above information and present additional information about
this subject.
1. What is the process for entering into an agreement
with the DWSD?
Township officials, engineers and legal counsel have been
in discussions with the DWSD since the DWSD proposed its first
draft of a new contract in March 2006. Township
representatives, along with some of the other 86 communities
that buy water from DWSD, developed and submitted many counter
proposals to the DWSD’s proposed contract language. While the
DWSD considered and responded to them, it must be noted that
the DWSD has always retained final authority on all matters.
Once the proposed contract is found to be acceptable by
staff, the Bloomfield Township Board of Trustees will vote to
enter into a 30-year contract with the DWSD. This will provide
potable water to Bloomfield Township’s water system until
2038. Sewer services are not included in the DWSD agreement
since our sewer system is part of the Oakland County system.
The Board of Trustees has full authority to authorize such an
agreement, the same as it has for all other contracted
services the Township provides.
2. What other alternatives were considered?
Since 1963, when Bloomfield Township’s Trustees realized
that the existing wells could no longer provide the quality
and quantity of water to meet the needs of its growing
population, the Township has continually researched the
viability of other potential water sources. The most seriously
considered options were using Lake St. Clair as a water
source, joining the Southeastern Oakland County Water
Authority (SOCWA), and creating our own water system. You may
see the
February 2008 Special Newsletter Edition: Water Rate Increase
for details about these options. Unfortunately, none of them
will supply the quantity and quality of water our residents
need at a more competitive price.
3. Why is Bloomfield Township’s rate increase higher
than some other communities’?
The DWSD is using a different rate calculation methodology
in the proposed contract from the methodology previously used.
Water usage during peak times (those days and times of day
that water demand is highest) is a major factor in the new
calculation of water rates. The previous method calculated
rates based on the Township’s water usage during Detroit’s
peak hours. This did not necessarily capture the Township’s
highest usage.
The new method calculates rates based on the Township’s
estimated peak hour, considering the Township’s historical
usage on Detroit’s maximum day. While the Township’s overall
water usage increased just 1% over the usage of a year before,
the usage during times of peak demand increased 38%. The peak
hour demand represents more than 54% of the total 2008
proposed water rate.
Bloomfield Township officials have strenuously objected to
DWSD’s choice of methodology because it is unfavorable to our
residents. DWSD, however, has sole discretion in making this
determination. The criteria used in developing rates meets
accepted standards established by the American Waterworks
Association and is used in other parts of the United States.
4. If Bloomfield Township residents and businesses
decrease their water usage during peak hours, will DWSD lower
its rates?
Under the new rate method for 2008 the Township’s rate most
likely wouldn’t decrease unless all the other DWSD customers’
flow volumes and peak hour demands remain the same or
increase, and DWSD’s operating costs decrease. The proposed
new contract specifies these peak hour demands and flow
volumes for the rate calculation. It allows renegotiation
intervals at two years, three years and five years. Bloomfield
Township would have to demonstrate that its peak hour usage
and flow volumes decreased during those times.
5. What is Bloomfield Township doing to encourage
residents to decrease their water usage?
The Bloomfield Township Board of Trustees believes that
making its residents and business owners aware of the
implications of using water during typically peak demand times
is the best way to encourage more responsible water usage. In
recent years, there have been multiple messages about this in
Township newsletters and special mailings. The Township
website has always posted detailed information about the
topic.
Some communities have passed ordinances regulating outdoor
water usage. Bloomfield Township officials are reviewing such
ordinances to determine their potential for effectiveness in
this community.
6. What is the Township doing to lower its own water
usage?
The Township has a capital improvement program to replace
the older water main pipes and install new pressure valves
that will reduce water losses and provide better control of
the system operations during periods of high demands.
Additionally, Bloomfield Township has shifted its sprinkling
patterns to avoid peak hours. The Township now sprinkles the
lawns of all public buildings beginning at midnight.
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Charter Township of Bloomfield
4200 Telegraph Road
P.O. Box 489
Bloomfield Hills, MI 48303-0489
248.433.7700
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