Trustees to study water and sewer rate plans

By Lisa Brody

Bloomfield Township Trustees, at their meeting on Monday, February 14, reviewed and discussed a new water and sewer financial plan and considered rate options and impacts following a study session, which will next be presented to residents at a town hall on March 9, and further discussed and voted on by trustees at their meeting on April 11.

Olivia Olsztyn-Budry, engineering and environmental services director, explained that over the past several months, Raftelis has been working with the township in developing the water and sewer financial plan and considering rate options and impacts. She said operating expenses include the costs for the purchase of water from Southeast Oakland County Water Authority (SOCWA) and the purchase of sewage conveyance and treatment in the Evergreen Farmington Sewage Drain (EFSD) by the Oakland County Water Resource Commissioner's Office (WRC). Operating expenses also include the local township costs such as personnel costs, repair and maintenance, and many others. Water usage in the township has declining.

Collin Drat of Raftelis said the financial plan includes determining the revenue needed by considering projected operating expenses, capital needs, cash flow forecasts and reserves for financial sustainability. Previous to the water and and sewer rate study, the township considered the financial requirements for calculating the rates on an annual basis. The plan also considers the estimated water purchase from SOCWA.

“The objective is to determine the level of revenue needed, and to look at all revenue forms as the basis for rate calculation for fiscal year 23,” he said.

Drat explained the township currently has fixed charges: there is the debt charge per residential equivalent unit, called REU based on usage; and the readiness to serve (RTS) per customer, which is a flat rate charged regardless of size. There is also a volume charge, which is the same charge per 1,000 gallons. Eighty-seven percent of the water and sewer customers are single family residential. About 51 percent of the total residential and commercial water and sewer customers use 20 units (20,000 gallons) or less per quarter. About 79 percent of the total residential and commercial water and sewer customers use 40 units (40,000 gallons) per quarter or less.

The choices before trustees are one, to consolidate RTS and Debt Charges (REU) into a single charge based on customer meter size; two, apply fixed charges to secondary irrigation meters, of which about 3,000 water customers currently have. The current rate structure does not apply any fixed charges to the secondary irrigation meter;. The third option is to maintain uniform volume charges for the quarterly billing schedule rather than to switch to monthly billing.

Trustee Neal Barnett said he was looking for “stability for the system, and to have money in case we have emergencies, as well as equitable charges for our residents. Adding a secondary meter charge is probably a good idea. Down the road, it's probably a good idea to consider a monthly bill.”

Treasurer Brian Kepes said he felt plan 1B “provides the best for everyone, funds the system and provides the consistency we need.”

“This is really a discussion about equity versus predictability and stability,” said trustee Michael Schostak. “Currently, 75 percent of our costs are fixed. Equity comes from usage.”

“This is drastic. We are not going to make everyone happy, but we don't want to hurt anyone,” said supervisor Dani Walsh.