Ypsi to pay Detroit more for water

Residents of Ypsilanti were informed today that the price they pay for water could rise by 9% or more in the coming year. The following clip comes from AnnArbor.com:

…Water rates for customers of the Ypsilanti Community Utilities Authority could be going up as a result of a proposed 9 percent increase in rates from the Detroit Water and Sewerage Department.

The amount of any increase won’t be known for months though, YCUA director Larry Thomas said today. Increases in rates from Detroit usually have to be passed along in some fashion, Thomas said, but it all depends on YCUA’s budget. The budgeting process won’t begin until later this year.

The Detroit department supplies water for YCUA, which then distributes it to its customers in Ypsilanti and Ypsilanti Township and to water utilities in Augusta, Pittsfield, Superior and York townships. New rates would likely take effect Sept. 1, he said.

The Detroit Department is proposing a rate increase of 9.2 percent for YCUA, The Detroit News reported. The Detroit City Council and Board of Water Commissioner must approve the increase, article said…

Maybe, if this were an isolated instance, I might not have a problem with it. I don’t mind paying a fair price for clean drinking water. As I seem to recall, however, the amount that we’ve being charged for water has been rising steadily for the past several years, without much explanation. I’d love to give them the benefit of the doubt, and assume that these newly proposed increases are indeed necessary for the good of the water system, but it’s kind of hard to do that when we know for a fact that the Detroit Water Department has historically been one of the most corrupt municipal utilities in the nation. (Indictments against former Detroit Mayor Kwame Kilpatrick outlined no less than 13 instances in which Victor Mercado, the head of the the department, conspired to steer millions of dollars in contracts toward Bobby Ferguson, a longtime friend of Kilpatrick’s.)

Due to the corruption, and the perennial rate hikes, several communities that depend on the Detroit Water and Sewerage Department are fighting back. The following clip comes from a late December article in the Detroit Free Press:

…Warren mayor Jim Fouts wants to know if corruption in the Detroit Water and Sewer Department has left suburban residents paying more for water than they should have.

In a letter to Detroit mayor Dave Bing, Fouts asked for cooperation between the suburbs and the city from which they draw water through meetings and increased surbuban representation on the water board. He also suggested a public utilities commission for the region.

“People are pretty unhappy with what they’ve been reading,” he said in an interview…

Some, from what I can tell, see this as a power play on the part of the suburbs, who want to control the resources up until now owned and operated by the City of Detroit, but, given the history, it doesn’t seem to me unreasonable on the part of these communities to demand more oversight and transparency. Detroit Mayor Dave Bing, as you might expect, is against the idea. Here, with more on Bing’s position, is a clip from Crain’s Detroit Business:

…”The Water and Sewerage Department is owned and operated by the city of Detroit, and it is my intent on a going-forward basis that it will be owned and operated by the city of Detroit,” Bing said.

He said he’s open to suggestions for better management of the department.

“I don’t want to be close-minded,” Bing said, “but I’m not going to be whipsawed into doing something that’s not going to be to the benefit of the city of Detroit.”

The department serves the city and suburbs, but most customers are now outside of the city. Water rates are set by the water department, but municipalities can add additional charges.

Some suburban customers of the water system have said mismanagement has driven water rates up, while some inside the city fear a suburban takeover of the department.

A slate of recent federal indictments have alleged that former Mayor Kwame Kilpatrick and associates such as contractor Bobby Ferguson routinely inflated the cost of water department contracts for personal gain…

So, it would seem, the people of Ypsilanti, and those of other communities surrounding Detroit, have been paying the price for years. When a Ferguson company was given a lucrative deal, it was us who ultimately paid for it, whether the work was actually done or not. And, now they’re asking us for even more. (I believe the reason they’re claiming that they need to raise an additional $200 million for repairs, to a great extent, is due to the fact that maintenance hasn’t really been done these past several years, in spite of the fact that we paid for it to be done.) And, Oakland County has now asked a federal judge to intercede. The following comes from the Detroit News:

…Oakland County asked a federal judge Wednesday to create a five-member interim committee to run the corruption-plagued Detroit Water and Sewerage Department.

It is the latest salvo in a decades-long fight between the city and suburbs — led by Oakland County — for control of the department, which played a key role in the racketeering conspiracy indictments last month of ex-Mayor Kwame Kilpatrick and the utility’s ex-director.

The committee would include the Detroit mayor, one official each from Wayne, Oakland and Macomb counties and a person appointed by the federal court that oversees the system under a 1977 consent judgment. That would replace a seven-person board whose members, including three from the suburbs, are chosen by the Detroit mayor.

The city-owned department is funded by more than 4 million water and sewerage customers across southeastern Michigan….

I don’t know the whole history, but, as this last clip states, there have been attempts on the part of the suburbs to take control of the Water Department in the past, which makes me think that it must be a profitable utility. Assuming that’s the case, it’s hard to know what the motivations truly are here… Personally, I’d like to stay out of it. I wonder how much it would cost for us to collect, treat and distribute our own water from the Huron River. If Ann Arbor can get 85% of their drinking water from the Huron, I wonder, why we can’t too.

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34 Comments

  1. Jennifer
    Posted February 3, 2011 at 8:22 am | Permalink

    Unbelievable. Is it common in other water utilities to pay 3 times for water? My YCUA bill has one charge for water coming into the house, another for sewage leaving the house, and a third “surcharge” : each is about 30% of the bill. (I think the surcharge is supposed to be for those repairs that now we are being asked to pay more for–in light of the shady history suggested here, I would love to know the full story of where & when the surcharge was added.) The weird thing is, though, that no matter how much water they say I used, the bill is almost always the same. I really don’t mind paying a fair price for a resource as precious as water, but it doesn’t seem like the charges have much to do with water at all.

    On the other hand, drinking from the Huron? Don’t sound so good.

  2. Knox
    Posted February 3, 2011 at 8:54 am | Permalink

    Does Ann Arbor’s system have capacity to include us, or would we have to build our own system?

  3. Edward
    Posted February 3, 2011 at 9:29 am | Permalink

    If Ferguson and others took money for work that wasn’t done, why can’t we go after him and his companies for those funds in court? If anything, our water bills should be falling under legitimate management of the DWSD, not rising.

  4. Edward
    Posted February 3, 2011 at 9:30 am | Permalink

    Where does Ypsi stand on this? Do our elected officials have a position?

  5. Ale Roka
    Posted February 3, 2011 at 9:49 am | Permalink

    Does anyone know if Ann Arbor water bills are even less lower than Ypsi’s?

    I can’t find any apples to apples comparisons.

  6. Andrew Jason Clock
    Posted February 3, 2011 at 9:52 am | Permalink

    We used to draw our water from wells, all of which became polluted over time. At the time that the wells became unusable, the Huron was far too dirty to consider drawing water from, so drawing water from Detroit was chosen. I could be off base, but I’m pretty sure the expense either building our own system or expanding A2’s to include us, would make the recent rate hikes look like chump change. After all, we’d have to pay for the water we’re getting and pay to try to expand the system as we go. I hate to say it, but our best option seems to be hoping Detroit gets their act together.

    Why do I feel like we had this same conversation last year. I feel like I’ve posted this same comment before…

    Also, I don’t want to drink whatever it is they put in the water in a2 that creates so many rude, conservative capitalists pretending to be nice, liberal communists.

  7. Emma
    Posted February 3, 2011 at 11:46 am | Permalink

    I also don’t understand the surcharge that basically doubles the bill. When I lived in the township it was much lower or non existant. YCUA installer even mentioned it to me when I had the water set up in the township, saying I was lucky I didn’t have to pay the city surcharge. I do believe the regular water charge is directly related to water use though because last year when we left the sprinkler on accidentally for two days there was a significant increase in the bill. YCUA does (well they did at least a couple of years ago) offer some sort of separate metering device so that you don’t have to pay the sewer charge on water used from an outside faucet but (when I checked on it a couple of years ago) it was $200.00 or so and didn’t seem worth it to me.

  8. Posted February 3, 2011 at 12:52 pm | Permalink

    If you work through the vague numbers in yesterday’s Detroit News article, rates will have gone up at least (vague numbers) 25% in three years, despite (according to the DWSD deputy director) the operations and maintenance budget being “pretty much flat for five years”.

  9. Ypsiosaurus Wrecks
    Posted February 3, 2011 at 1:32 pm | Permalink

    Any input city council….?

  10. Andy1313
    Posted February 3, 2011 at 2:17 pm | Permalink

    I suggest that the puppet interview Larry Thomas at Dreamland.

  11. T Timmons
    Posted February 3, 2011 at 4:38 pm | Permalink

    I know that a good number of our City Council members read this site, as I’ve seen their comments before. I’m not sure why they aren’t commenting on this. You would think that they’d have an opinion, as this involves everyone in the community. Shouldn’t they respond, as the elected officials of Warren and other cities have? Is it that they don’t want to offend the leadership at YCUA who make their money by adding fees to those of the the corrupt Detroit department? I wish to God we had a real investigative newspaper in this town.

  12. Posted February 3, 2011 at 11:21 pm | Permalink

    The surcharge pays for the new water mains that were installed when the local roads were repaired in 2004. Water main breaks were on the rise until the new mains were installed. As far as I know, no breakdowns of the new water mains have occurred since.

    If the city were to change it’s water source, funding for the new infrastructure in the form of something like an extra surcharge would be required.

    The YCUA board (http://www.ycua.org/boardmembers.htm) has two Ypsilanti city representatives: Mark Namatevs and Deedra Climer Bass. They are trying to keep the cost of providing water and sewer service to Ypsilanti as low as possible. For example, the Ypsilanti water towers are filled during off-peak hours when the water is cheaper.

    Paul Schreiber
    734-277-5446

  13. Edward
    Posted February 4, 2011 at 8:58 am | Permalink

    Thank you, Paul. I’m assuming the YCUA budget exists somewhere on-line. I’ll look for it. As for Detroit Water and Sewer, do you have an opinion? Have we protested the rate increase? Is there anything that we can do? Do we costed out our other options?

  14. Posted February 4, 2011 at 11:35 am | Permalink

    City council votes on the YCUA rates every year. Many of the questions that were asked in this thread are asked at that time. The Detroit Water system seems to be the best alternative currently. Any change to the status quo would occur through YCUA, since Ypsilanti city and Ypsilanti township set up a water and sewer authority that is a separate governmental unit.

    YCUA is an example of regional collaboration where costs and overhead are reduced, but local control is also reduced because the city has two seats on the five-member YCUA board.

    Paul Schreiber
    734-277-5446

  15. Posted February 4, 2011 at 12:19 pm | Permalink

    The expense of running a water/sewer utility has both variable and fixed components. Part of the expense is on a per-volume basis: what amount of chemicals, energy, etc, do you need to pump and treat each unit of water? A large part of the expense, though, is fixed – the treatment plants, the pipe maintenance, etc.

    If demand for water goes down (let’s say, purely hypothetically, you have a bunch of industrial plants close or downsize, because industrial plants are huge water customers), then the variable cost goes down, but the fixed cost stays the same. The fixed cost is now spread over fewer units of water, though, so the per-unit cost goes up. It’s hard to get around this – you can’t exactly pull out all the pipes and install new ones in the “right” size every year.

    This is the major factor behind increases in water rates, and would remain the case no matter who owned or controlled the system: physics doesn’t change, just by booting Detroit out of the picture. Sure, there are allegation of wrongdoing by Detroit in past years, and some of them may turn out to be true – while this gives a great opportunity for sturm und drang, it’s not actually going to change the realities of the fixed costs of the system relative to the customer base. (And, remember, more sprawl = more infrastructure per person – as we continue to drain people from Detroit and the older suburbs into new-growth areas, the total fixed costs to run water lines will go up, even though population is merely being rearranged, not growing.)

    Mayor Schreiber covered the local surcharge – that is used to cover the bond costs of utility main repairs/replacements locally (within the city, not even across YCUA’s whole territory). By doing this during the local street reconstruction process, we save the future costs of having to tear up new streets every year to fix water main breaks. The surcharge should begin ratcheting downwards as those bonds are paid off, but I can’t remember the timelines on them.

  16. Ted
    Posted February 4, 2011 at 1:01 pm | Permalink

    Does Ann Arbor have capacity for us on their system? And, if so, why not at least consider it, assuming that rates would be in the same ballpark?

  17. mark
    Posted February 4, 2011 at 2:51 pm | Permalink

    I have had friends in Ann Arbor for nearly 30 years, and none, I repeat none have used the water for drinking or cooking, only bathing and laundry etc.. So add the cost of bottled water to your monthly bill. It seems like along with the surcharge for the water mains, we are also paying a surcharge for the new incinerator for our solid waste. A project, that given Michigan declining population, will never be cost efficient (let alone the health and environmental problems. )
    Perhaps we should look at our water system as a potential energy source. They are installing hydro turbines in the 2000 year old auquaducts in Italy. We have two water towers that could be used to for power

  18. karen
    Posted February 4, 2011 at 5:53 pm | Permalink

    Why won’t the mayor share his opinion on this? He’s been asked a direct question. What good is a mayor that doesn’t have an opinion? What a waste.

  19. Emma
    Posted February 4, 2011 at 6:33 pm | Permalink

    Is the surcharge something that will eventually come off the bills and is it based on water consumption, the cost of water or something else? The water in Ypsilanti tastes much better to me than the water in Ann Arbor even if it often smells like chlorine. Plus, after reading articles like this:
    http://www.annarbor.com/news/impact-of-hexavalent-chromium-detected-in-ann-arbor-uncertain/
    I really do not want to plug into their supply.

  20. Water Logged
    Posted February 4, 2011 at 10:42 pm | Permalink

    Murph,

    Very clear, accurate and helpful comment. Thank you.

    Karen,

    Your comment adds nothing of value but a thinly veiled attack which is made all the more bizarre given that the rest of council, apparently, has nothing at all to say? Your useless comment is a perfect example of why most others on council avoid commenting. It simply opens them up to sniping that has nothing to do with constructive discussion. What a waste, indeed.

  21. lorie thom
    Posted February 5, 2011 at 10:56 am | Permalink

    I appreciate Murph’s explanation and Mayor Schrieber’s thoughts.

    That being said, Detriot has used their monopoly over water delivery to screw its neighbors for generations. They claim they built the system but they did it with our money that they unilaterally charged us.

    I think a regional authority would be appropriate and fair. There is far too much corruption and far too much incompetency to let that single Detroit-run entity have control over something so vital as our water.

    It is clear that the money WE have sent to Detroit has been badly mis-spent on bribes, work not done, and poor work that needs to be re-done. All of it with a lack of transparency that is unacceptable.

    I appreciate the local issues. However, the foundation of this system, the Detroit supply is much more fragile than anyone is willing to admit AND for the money, way too expensive because it has been corrupted – physically and financially for far too long.

    I would like to see our elected city officials take a close look at and discuss what a regional authority would look like and see how that might work for Ypsilanti’s situation.

    I lived in Ann Arbor for 14 or so years and I had means to independently test the water at the time. It was fine save for the bits that Andrew has concern about. I have yet to test the water as it comes out of my pipes here. I think some of us would benefit from those independent tests.

    Many many of us have degraded old pipes carrying water inside our homes. Detroit’s water supply ain’t that great to begin with and the system, based on the court documents, has not been properly maintained but YCCA seems to have a handle on the water quality – would be worth checking it for ourselves. Data being better than what seems like some unfounded concerns. (eg. Bottled water isn’t any better than tap – most of it comes from a tap)

  22. Tom Perkins
    Posted February 5, 2011 at 11:11 am | Permalink

    Some more background here. Losing every industry in town apparently doesn’t help the situation.

    http://www.annarbor.com/news/industrial-decline-cotributes-to-increase-in-residents-water-bills/

  23. Posted February 5, 2011 at 11:15 am | Permalink

    Emma – generally, “yes” to all of that, in my understanding. (Which is purely second-hand, and I encourage anyone with direct knowledge to step in with corrections…)

    The bulk of the surcharge pays for the bonds taken out to replace the aging underground infrastructure over the last decade, at the same time that the streets above them were reconstructed. Benefits to this include prevention of water main breaks & costly replacement, as noted above, as well as fewer leaks – I think I’ve heard that, prior to the main replacement program, only about 80% of the water YCUA bought from Detroit for Ypsi customers ever made it to us; the rest leaked out of the old pipes en route, so essentially we were already paying a surcharge built into the rates, for the wasted water.

    As to whether the surcharge ever comes off of our bills – I doubt it will ever hit 0, because we’ll probably not run out of capital repairs on the system for some time. The value will fluctuate, though, as we pay off various bonds and/or our total water usage varies.

    That latter part “total water usage varies” answers your question on how the surcharge rate is calculated – it’s a lot like the part about “fixed costs” and usage in the DWSD discussion. The total revenue coming from the surcharge has to hit a certain target every year: the cost of the bond payments for the year. That total amount is divided across everybody’s bills, based on your share of total usage. If we, in total, use more water in a year, then the amount needed per-unit to make the bond payments goes down. Just one more reason to support new residents and businesses in Ypsi, as if you needed another one: the more water customers we have, the lower the surcharge rate.

    It’s a pretty good system – lots of older cities have either undertaken similar efforts (Ferndale, for example, undertook a $45m bond-funded road+water program in the mid-90s), and the ones that haven’t are gulping at this point, because financing something like this is going to be that much harder, but that doesn’t mean they don’t need to do it. As far as I know, though, we’re the only case of both making it a user fee (per-unit on the water bill, as opposed to a millage) and also making it transparent as a separate line item (as opposed to just rolling it into the per-unit charge transparently).

  24. Posted February 5, 2011 at 3:44 pm | Permalink

    Given all of this, I think it’s pretty clear that, at the very least, it would be in our best interest to push for more regional control of DWSD. And, if that doesn’t happen, I think it would be the responsible thing to do to look for other alternatives, such as working with Ann Arbor or building our own. It might be that doing either would be cost prohibitive, but we should at least know our alternatives so that we can make informed decisions.

  25. Pete Murdock
    Posted February 5, 2011 at 11:48 pm | Permalink

    Why Detroit Water?

    During the eighties the City was faced with upgrading/replacing our fifty year old Water Treatment Plant on Catherine Street in order to modernize and meet newer EPA Water quality standards. At the same time the City’s wells, the primary source of water, were becoming contaminated with vinyl chloride and salt. The secondary source of water was the Huron River. The city was faced with constructing a very expensive new treatment plant and utilizing the Huron River for its total water supply. Although the Huron River was used to supplement the City wells, mostly in the summer months, it was not desirable as a sole source because it took more chemicals, process and expense to treat and the end product, frankly, didn’t taste very good.

    The other option was to purchase water from some one else. The City of Ann Arbor’s water treatment facility is on the other side of Ann Arbor and would have required an expansion of their plant and the construction of a large water main to connect from their system to ours the City of Ypsilanti’s expense. If I recall, they expressed little interest in expanding their system to Ypsilanti for a variety of reasons.. On the other hand, YCUA was already a customer of the Detroit Water Department which was already supplying the Township Division of YCUA with water. A connection to Detroit already existed in Ypsilanti that the City could easily tap into. In addition Detroit had the capacity to serve Ypsilanti with their existing system and no costly expansion was necessary. The cost analysis that was done at the time showed that abandoning the City’s water treatment facility and purchasing water from Detroit was by far the most cost effective way to provide a clean water supply to City residents.

  26. Water Logged
    Posted February 6, 2011 at 1:03 am | Permalink

    Before you get too gung-ho on this, I suggest you read the bill (HB 4112). Note who qualifies for representation on this “regional authority.” It excludes us in every way, shape, form. If you’re not in a county with more than 500,000 people (i,e., Wayne, Oakland, Macomb) then your not eligible for representation.

    Then, pause, and think about the corruption that has been reported in said counties. Then, pause, and think about the development/sustainability values of said counties. Then, pause, and ask whether this isn’t really about Macomb and Oakland being able to fuel their thirst for sprawl and prioritize funding for their new projects.

    I’ll state this as clearly as I can: A regional authority will give Ypsilanti absolutely zero more say on the DWSD. It will transfer power from Detroit to Brooks Patterson. Period.

    This is about Oakland County (and a few other comparatively minor players) wanting to be able to prioritize spending to their benefit for price and development.

    If you want a picture of corruption, look at this bill. Look at how its representatives are elected. It is theft on a grand scale.

  27. Posted February 6, 2011 at 1:54 am | Permalink

    It has occurred to me, Water Logged, that we’re a relatively small player in this whole thing. And, like you, I don’t like the prospect of our water being controlled by Oakland County. I think, however, that broadening the representation on the board would likely help our cause, if only marginally. Even if Ypsi doesn’t have a seat, I think it’s more likely that our interests would be addressed if there were a greater number of communities at the table. Neither solution, however, is perfect, which is why I think we need to cost out all the options.

    And thanks for the background, Pete. It makes sense that we did that in the 80’s. As that was 25 years ago, however, I suspect some of the facts may have changed… Again, I’m not saying that we should leave DSWD. I’m just saying that I’d like to know what options exist, and what the associated costs would be. And, for what it’s worth, I know this probably isn’t a priority right now, what with our current financial crisis.

  28. KTT
    Posted February 7, 2011 at 3:52 pm | Permalink

    So where do our city council members stand on this? Do they want a regional board or not?

  29. Pete Murdock
    Posted February 11, 2011 at 12:52 pm | Permalink

    From, Deedra Climer Bass, one of our City representative on YCUA
    She can be contacted through Facebook

    “YCUA will be discussing the Detroit Water & Sewage Department control issues at the next board meeting on February 22nd @ 9:00 in the YCUA board room. As always, meetings are open to the public and anyone interested in hearing the discussion or making public comments can do so at this time. If you have specific questions or input you’d like for me to bring up, please PM me.”

  30. Pete Murdock
    Posted February 14, 2011 at 8:28 am | Permalink

    Agreement reached between Detroit Water and Sewer and Suburbs – Detroit maintains ownership and four Board seats, Macomb, Oakland and Wayne each get one seat on the seven member board. Rate increases and “major” capital projects need a super majority of five. Washtenaw County and YCUA left out.
    http://www.freep.com/article/20110212/NEWS05/102120346/1001/news/Deal-gives-suburbs-more-say-Detroit-water-system

  31. Edward
    Posted February 14, 2011 at 9:49 am | Permalink

    Do yo find this solution agreeable for the people of Ypsilanti, Pete? Will our interests be looked out for?

  32. karen
    Posted February 14, 2011 at 12:45 pm | Permalink

    I agree with Mr. Murdoch. I think we should connect to the Ann Arbor water system even if it costs us seventy five million dollars to build a pipe to the other side of Ann Arbor.

    Mr. Murdoch, can you tell us if the system would be able to absorb those infrastructure costs so my bill doesn’t go up?

  33. kjc
    Posted February 14, 2011 at 12:54 pm | Permalink

    i’ll pay more to NOT connect to A2’s system. that water tastes like shit.

  34. Delores Giulino
    Posted March 26, 2011 at 7:23 am | Permalink

    The next time I read your blog, I hope that it doesn’t disappoint me as much as this time. This post seems to be all about municipal water. There’s not even a single mention of how good Kirstie Alley is doing on Dancing with the Stars.

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