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2016-2017 Water & Sewer FAQ & Rates

Recently, summer water bills were sent out and you may notice that your bills may be higher than normal.  The reason for this is generally attributed to an increase in water and sewer rates and summer utilitization. 

First, water and sewer rates have increased effective July 1, 2016 to reflect the rising cost of water.  The overall increase in water and sewer rates is 7.3%.  The water rate increased 4% as a result of an increase in the cost of water from the Great Lakes Water Authority, an increase in the cost of maintenance and a decrease in the amount of water consumed by the City in total, which increases the rate.  The sewer rate increased 9% as a result of an increase in sanitary sewage disposal costs, an increase in storm water costs, an increase in capital improvement costs, as well as, a decrease in the amount of water consumed by the City (water consumption is the basis used to bill sewer charges).

The second reason why your summer water bill may be higher is due to the weather and utilization.  This past summer was a hot and dry season.  We have not experience this kind of weather since the summer of 2012.  As a result some homeowners may have used their sprinklers more than they have the in past three summers.  Homeowners are often shocked at how much water is used to irrigate their lawns.  Additionally, other reasons for a high bill could be a leak.  A common water leak problem is a running toilet.  The City’s Department of Public Services has prepared a self-diagnostic guide to help homeowners determine whether they have a leak. 

If you believe your meter was read in error, please contact the utility billing phone number at 248-530-1830.

Water & Sewer FAQs

I just got my bill and it was more than I anticipated. Did water and sewer rates increase?

Water and sewer rates changed for all water billed on or after July 1, 2016.  Water rates increased 4% from $4.21 to $4.36 for every 1,000 gallons used.  Sewer rates increased 9% from $8.88 to $9.68 for every 1,000 gallons of water used.  That’s an overall increase of 7% from last year.  The average homeowner using 90,000 gallons per year would see an annual increase in their water and sewer bill of $85.50.

Why did rates increase this year?

Water and sewer rates will frequently change from year to year for different reasons.  The current year rate increases are explained below.

Water Rate

Treated Water - Birmingham purchases its water from the Southeastern Oakland County Water Authority (SOCWA) which in turn purchases the water from the Great Lakes Water Authority (GLWA).  SOCWA maintains the water mains that connect the 11 communities that make up SOCWA to GLWA’s water mains.  The cost of treated water from SOCWA increased 2% from last year. 

City maintenance costs increased approximately 4% as result of an increase in personnel costs, supplies, and contractual services.

Another factor increasing the water rate is the overall decrease in water consumption by the City.  As water consumption decreases, the cost of the providing this service has to be spread over fewer units of water which has the effect of increasing the rate.

Sewer Rate

The increase in the sewer rate is the result of several factors.  First, sewage disposal costs from GLWA and the Oakland County Resources Commissioner (OCWRC) increased 4%.  Second, storm water costs charged by OCWRC are anticipated to increase 7% mainly the result of increase in costs and a change in policy at the OCWRC to not allocate operating surpluses back to the communities.  Third, the decrease in water consumption of 2% increased the rate.  Last, an increase in funding for capital improvements.

If we are using less water, shouldn’t the costs be going down too?

Yes and no.  There are some costs that have a direct relationship to the amount of water used, for example, cost of treated water.  However, there are other costs that don’t change based on the amount of water used by the City.  These costs include sewage disposal costs (GLWA switched to a fixed cost method for sewage treatment in 2014-2015), City water and sewage maintenance, billing and depreciation.

How are rates determined?

Every year, City staff develops budgets for the following fiscal year.  These budgets are used to determine projected water and sewage disposal costs.  The costs are reduced by other revenue generated by the respective systems (interest income, charges for services, etc.).  The net cost is divided by the projected number of units of water to be sold during the year to arrive at a rate per unit of water sold.   Below is a summary of the calculation for water and sewer rates for this year:

 

WATER RATE

 

 

 

SEWER RATE

 

Treated Water

             $2,001,050

 

Sewage Disposal

          $3,322,620

Maintenance Costs

               1,673,460

 

Stormwater Disposal

            2,470,420

Depreciation

                  810,580

 

Maintenance Costs

               864,400

Total Costs

            $4,485,090

 

Depreciation

               884,300

Less:  Other Revenue

                (828,360)

 

Total Costs

          $7,541,740

Net Costs

            $3,656,730

 

Additional Capital Funding

               675,000

Est. Units Sold (water)

                 839,400

 

Less:  Other Revenue

               (92,130)

Rate

                     $4.36

 

Net Costs

          $8,124,610

 

 

 

Est. Units Sold (water)

               839,400

 

 

 

Rate

                    $9.68

 

Does anyone review the rates?

Yes, the City Manager reviews the department budgets which form the basis of the respective system costs.  The budgets along with the rates are presented to the City Commission at the annual budget hearing conducted in April.  The City Commission gives feedback to the City Manager on the budgets/rates.  Any changes to the budgets/rates are presented to the City Commission at a regular schedule meeting (usually in May) where they are approved.

What is the City doing to keep rates down?

The portion of the water and sewer rate that the City controls is approximately 45% and 29% respectively.  Unfortunately, there is not much we can do about costs outside of the City’s control (GLWA charges and OCWRC charges).  We do communicate our concerns over rate increases with the various responsible agencies.   

The City is constantly reviewing the way we maintain our systems and look for efficiency gains whenever possible.  Recently, we have implemented an automated meter reading system which nearly eliminates the need for human meter reading externally or internally.  Another way the City is reducing costs is by switching newly hired employees to a defined contribution retirement and retiree health savings plan.  These new retirement benefits will keep costs lower and more predictable from year-to-year.

To help put in perspective what has happened to water and sewer rates over the past 10 years, the following chart will demonstrate where the costs have increased:

 

 

2006-2007

 

2016-2017

% Increase (Decrease)

Annual % Increase (Decrease)

Water System

 

 

 

 

     Cost of Water*

         $  1,505,000

          $  2,001,050

33%

3.3%

    City Maintenance

             1,328,350

              1,673,460

26%

2.6%

    Depreciation

                437,030

                 810,580

85%

8.5%

 

 

 

 

 

Sewer System

 

 

 

 

     Sewage Disposal*

             3,038,740

              5,793,040

91%

9.1%

     City Maintenance

             1,198,790

                 964,400

(20%)

(2%)

     Depreciation

                524,810

                 884,300

68%

6.8%

* Represents cost outside of the City’s control

As the chart above shows, the main increases in costs for the water and sewer system have come from rate setting agencies outside of the City’s control and depreciation.  The depreciation charge represents the cost recovery of assets placed into service.  Water and sewer lines are depreciated over a 40 year life expectancy.

Does Birmingham have the highest water and sewer rates?

Birmingham’s water and sewer rates are higher than many communities because of various factors:  1) we are a combined sewer /storm water sewer system, 2) our infrastructure is older, 3) smaller population, and 4) we participate in the maintenance of 3 CSO retention basins. 

Even with those factors, Birmingham’s rates are not out of line with other surrounding communities as shown for below.  The following chart illustrates an average quarterly bill for a customer using 30,000 gallons.

Comparison of Water Bills 2015-2016

What can I do to lower my bill?

Residents can lower their bill by checking for leaking toilets and sinks, adjusting lawn sprinkling times and days, and purchasing water conserving shower heads and toilets.

What is an Industrial Waste Control (IWC) charge?

The Industrial Waste Control charge is an additional fixed fee charged to commercial properties by the GLWA for additional sewage treatment costs associated with commercial properties.  The fixed fee is based on the size of the water meter.  These fees are collected by the City of Birmingham and remitted to the GLWA.  The GLWA has increased this fee by 3% for 2016-2017.

ADDITIONAL QUESTIONS AND ANSWERS REGARDING YOUR WATER BILL

How are water and sewer services provided?

WATER

Water is collected from Lake Huron and Lake St. Clair where is it treated and pumped through water distribution mains by the Great Lakes Water Authority (GLWA), formerly the Detroit Sewer and Water Department, to meters at the City border managed by the Southeast Oakland Water Authority (SOCWA).  The City purchases treated water from SOCWA who in turn purchases the water from GLWA and the City distributes it through over 100 miles of City owned water pipes to each property. 

SEWER

A majority of the City’s sewage system was built before 1930 and was designed to collect both sewage and rainwater into the same pipe, where it must be treated collectively before it is released into the Detroit River.  Given the City’s history with a combined sewer system, the City participates in the maintenance of four sewer retention treatment basins.   These basins are designed to eliminate untreated sewage overflows during storm events as mandated by the federal government.   Treating stormwater greatly increases the annual maintenance and treatment costs.  A comprehensive study was conducted prior to the construction of these basins in the early 1990s as to whether a change to a separated system would have been more advantageous.  It was concluded that separating the entire system was cost prohibitive. 

Not unlike the water system, the sewer system also has over 100 miles of City pipes to maintain and includes transportation to the Oakland County Water Resources Commission(OCWRC) who in turn transports sewage to GLWA for final treatment.   Sewage treatment costs are apportioned to each city by sewage meters measuring flow from each city.  The combined sewage and rainwater that is managed by this system creates higher volumes than the water system and charges proportionately.

How does decreased water consumption result in increased rates?

Fixed costs for operating the water and sewage systems that are similar among GLWA, SOCWA, OCWRC and the City are not directly related to the amount of water used.  In fact, water consumption within the region has gone down, which in turn, increases the per unit rates to all users in the system. 

Did the stormwater lawsuit affect my current water bill? 

The stormwater lawsuit has not affected your water and sewer bill.  No costs incurred because of that lawsuit have been reflected on your water and sewer bill.

When will the requirement to change the billing methodology for stormwater go into effect?  

A new methodology is currently being studied and is expected to be implemented effective January of 2017.

What will this mean for billing purposes?

Currently, your sewer charge contains both sanitary and stormwater disposal charges.  Beginning in January of 2017, these charges will be shown separately on your water and sewer bill.  This is not a new charge, simply a recalculation of the current charges to reflect a water charge, a sewer charge and a stormwater charge. 

Why would my bill be the same as my neighbors?

You could have the same bill as your neighbor’s based on similar consumption.  You can contact the City Treasurer’s Office if you would like them to review your consumption.  Please call (248) 530-1830.

Can I get a separate water meter for outdoor watering?

Historically, the City has been billed for its sewage and treatment costs based on how much treated water is used.  Allowing some customers to avoid sewage treatment costs would result in raising the rates for the remainder of the City’s customers.  As new methodologies for billing are analyzed, this may be an option in the future.

Do homeowners who pay a special assessment for an improved road get billed twice for new water and sewer infrastructure on their water bill?  

No, new water and sewer infrastructure as part of installing an improved road is not charged to the individual homeowners on that street.

Who can I contact if I have a question about my water bill and the actual read included on it?

Please contact the City Treasurer’s office at (248) 530-1830.

Who can I call if I have additional questions?

If you have additional questions, please call the telephone numbers listed below or feel free to send an e-mail to water@bhamgov.org. You will need to provide your address, and Treasury staff can review your account and provide additional information.

Contact List

City of Birmingham                                                                         Water Resources Commissioner

Water Department                                                                            Phone:  248-858-0958

Phone:  248-530-1830                                                                     email:  wrc@oakgov.com

Fax:  248-530-1070                                                                           website:  www.oakgov.com/water

e-mail:  water@bhamgov.org

website:  www.bhamgov.org