Ypsilanti City Council takes first step in approving water and sewer rate hikes
Ypsilanti residents will likely see an increase on their bi-monthly water and sewer bills.
If proposed new rates are approved, an average user’s combined bill from the Ypsilanti Community Utilities Authority would climb by $5.87 per bi-monthly bill, or 4.14-percent, including a surcharge for debt capital improvement costs that will decrease from 68-to 67-percent.
The average city of Ypsilanti user, which is typically a family of four, uses between 1600 and 2000 cubic feet bi-monthly.
At its Sept. 3 meeting, the Ypsilanti City Council approved the first reading of separate ordinances for each of the increases and decrease. A second reading is expected at the next regular meeting.
YCUA Executive Director Jeff Castro
Tom Perkins | For AnnArbor.com
YCUA executive director Jeff Castro said the rate increases are a result of the Detroit Water and Sewerage Department passing on a 6.3-percent increase in its fixed rate to the YCUA. No matter how little a consumer uses, they are automatically charged a minimum, or fixed, rate.
Castro said water usage in Michigan is dropping in general and the DWSD needs to make up for those lost revenues by increasing the fixed rate, though the YCUA was able to lessen the increase passed on to its customers.
“We were able to reduce to 5 percent due to containment of other costs,” Castro said. “The authority has been managed well over last several years and reduced costs and reduced staff through attrition.”
The city division of the YCUA is overwhelmingly residential and institutional, Castro said, and the authority expects stable water and sewer usage over the next two years. The city has seen a 7.9-percent decrease in water usage over the last five years.
Council Member Susan Moeller questioned why, if less water is used, rates continue to increase.
YCUA officials explained that there is a fixed cost to providing water and sewer, and spreading it over smaller base increases payments for each customer.
“Unfortunately when consumption decreases, costs go up. (DWSD) must recover that cost to pay for their debt,” Castro said.
“There’s no profit or trying to build or expand on people’s water rates,” added Mike Bodary, a former city council member who is now the city’s representative on the YCUA board.
Moeller also questioned what happens if City Council votes against the increase, to which Council Member Brian Robb responded "Then the YCUA looks like the bad guy because you voted against increasing water bills."
The city is required by a covenant in its bond agreement to pay its bond debt and operating and maintenance costs plus 25 percent, and failing to do so could put cause financial trouble for the city and YCUA.
Moeller subsequently voted against the water and sewer increases, but not the reduction in debt payments.
The last YCUA rate increase was in October of 2012.
Ypsilanti Township recently approved a first reading of slightly higher increases for customers there. Township and city governments will vote on a second reading of the ordinances at their upcoming meetings.
Comments
Shae
Mon, Sep 9, 2013 : 4:16 p.m.
Its going to be ashame when people get taxed out of their houses...
Michael Bodary
Sun, Sep 8, 2013 : 2 a.m.
This is a complicated situation and deserves a more complete answer. Actually the rates would not go up If a majority of council voted against the requested increase, but with more information cooler heads would prevail and they inevitably would. The City sets its own water rate. If they refuse to pass an increase there would be no increase. The City is obligated to increase the rate as needed. The City Bond to finance water and sewer projects contain language that requires the City to keep rates at a level to pay O&M and debt with a 25% coverage. The language is a covenant in which the City promised bond holders to do this. If the City failed the bonds could be called. What would happen if City council does not approve rates? The City would be violating its bond covenants putting both the City and YCUA in a serious financial position.
gus
Fri, Sep 6, 2013 : 2:30 a.m.
I have to comment on council member Moeller, she would be better served on the Kmart board for customers. It was quite embarrassing watching her body language as Ycua was providing what I thought was honest informative information. The City lighting assessment that will light up the top of tree's and not the sidewalks will cost me more than the water and sewer rate increase combined. I do not like increases in anything, however the Dwsd increased it rate to Yuca by more than 6.3% if I heard correctly. And Ycua is passing on only 5%? Thank you Ycua and please continue to keep us informed.
Ypsi Tax Payer
Thu, Sep 5, 2013 : 4:23 a.m.
Moeller gets 'giddy' and giggles when she asks questions, believing she is putting presenter on the hot seat. When others are speaking she likes to look at other council members and roll her eyes. Perhaps if meetings were video taped she could correct the unprofessional behavior and learn to at least appear respectful of other's points of view.
Scott Straley
Wed, Sep 4, 2013 : 5:02 p.m.
So, let me understand this. YCUA is being charged more for their water supply. YCUA is a non-profit entity, so there is no profit margin to absorb the increase. YCUA is required to pass that increase on to customers. The Ypsilanti City Council then decides to waste time debating and voting on an issue even though they don't really have a say. And, sadly, some of the councilmembers are incapable of understanding the simple math of the equation. I wonder if Moeller thinks that if she drives less to conserve gasoline, that her monthly car payments should go down, too?
ypsiresident
Wed, Sep 4, 2013 : 4:10 p.m.
So the last increase was October 2012....and here we are - not even a year later - faced with ANOTHER increase?
Mike
Wed, Sep 4, 2013 : 4:09 p.m.
It seems that the downturn in water usage is from the reduction in Southeastern Michigan's population. (using Detroit water system. ) The cost of purifying and transporting this water to customers continue to rise. Many of the business that are part of the Detroit area continue to move out of the area, and the prices will continue to increase over the years. Detroit seems to have some of the purist water around though, and the costs are still much lower than in other Michigan communities. Wishing that I was back receiving Detroit water and paying the costs that you pay. I pay about $100.00 per month (includes sewage) and still I buy drinking water at the store about $15.00 per month. I need a water softener that costs about $12.00 per month as well.
PattyinYpsi
Wed, Sep 4, 2013 : 1:16 p.m.
OK. Let me see if I have this right. If we use more water, our costs go up--because we're using more water. If we use LESS water, our costs go up--because the utilities operate so inefficiently that a drop in consumer use of water means they can no longer sustain their operations. City Council conducts a number of readings of the increases the utilities say they need. There's no in-depth consideration of whether the proposed increases are necessary or fair. The increases will go into effect regardless of whether council votes yes or no. We've fallen down the rabbit hole in a big way if this is how our local government operates.
YpsiGreen
Wed, Sep 4, 2013 : 1:51 p.m.
If you're not busy enough to fund your out of whack business model (DWSD), then cut your own costs instead of gouging others to fund your "habit." Outrageous!
glennsha
Wed, Sep 4, 2013 : 12:36 p.m.
And the number of houses for sale in Ypsilanti continues to rise, hum wonder why? Look around no jobs, highest tax base of anywhere around, street lighting assessment, now this, drive around city council and see all the for sale signs.
Duc d'Escargot
Wed, Sep 4, 2013 : 1:05 p.m.
In case you missed it, the Detroit Water and Sewerage Department provides water to YCUA (and to most of the suburbs.) When DWSD raises their rates the local water departments usually must pass the cost along to their customers. City councils and township boards don't have a lot of options for controlling rate increases. And where are "all the for sale signs"? I don't see that many of them when I'm driving around Ypsilanti, and I think a realtor will tell you that the inventory of houses for sale is still low. I know of two nice houses in my area that were sold within days of being put on the market.
TK2013
Wed, Sep 4, 2013 : 11:59 a.m.
Moeller should stop pandering and start thinking boldly. How about a little leadership?
RUKiddingMe
Wed, Sep 4, 2013 : 10:53 a.m.
So if water usage increases, I take it the rate would be lowered again? Riiiigggghhhttt.
CroseW
Wed, Sep 4, 2013 : 1:09 p.m.
If we had enough volume provided by industrial use of water; I understand that it could bring down the cost for everyone. Something like Meijers can buy product for less because of their volume purchase so we can buy from them for less. If YCUA can reduce their cost of doing business; so can Detroit. The continual increases, especially in the minimum charge per meter needs to be scrutinized and negotiated. If you have your outdoor water metered separately; sewer costs do not apply but, the minimum charge covers it anyway. I would like to see that a customer with a separate meter who uses less than 6 units per watering season, be charged the minimum only once per season. How many times and how many ways are we paying for water service infrastructure? Water rate increases because of cost, sewer rate increases, surcharge, plus minimum rate increase. BTW just the increase is almost the actual cost of the water I use for the entire season from my "sprinkle" meter. It would also cost me to have it removed.