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2023-2024 RATES

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2023-2024 Water, Sewer, and Storm Water Rates  Frequently Asked Questions (FAQ)

Did water, sewer and storm water rates increase?
Water, sewer and storm water rates are updated annually.  The new rates are effective for all bills where the meter read date was on or after July 1, 2023.  Water rates increased 8.1% from $5.67 to $6.13 for every 1,000 gallons used.  Sewer rates increased 5.3% from $9.30 to $9.79 for every 1,000 gallons of water used.  Storm water rates increased from $62.00/quarter/ESWU to $70.50/quarter/ESWU for water accounts in the Evergreen-Farmington Sewage Disposal District and from $68.25/quarter/ESWU to $73.25/quarter/ESWU for water accounts in the Southeast Oakland County Sewage Disposal District. The average homeowner using 90,000 gallons per year and living on a property with an ESWU factor of 1 would see an annual increase in their water and sewer bill of approximately $113.
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

Approximately 55% of the rate increase is the result of transitioning funding for water infrastructure improvements from property taxes to water rates.  Prior to fiscal year 2021-2022, a million dollars of the property taxes generated by the operating millage was used for infrastructures improvements to the water system.  Over a period of 5 years, this will gradually be shifted to the water rate in order to sustain water system improvements throughout the City.

Approximately 20% of the rate increase is the result of the cost of water.  The City 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.  This portion of the rate increase is determined by entities outside the control of the City.  

Approximately 15% of the rate increase is the result of a decrease in the City’s water consumption.  As explained in the “How are rates determined?” section of this FAQ, the total costs of the water system are divided by the anticipated number of units of water sold.  As water consumption decreases, it increases the rates the City must charge to cover its costs.

The remaining 10% of the increase is related to City maintenance costs which increased approximately 5% as a result of normal personnel and contractual increases and an increase in depreciation costs associated with infrastructure improvements

Sewer Rate

Approximately 70% of the rate increase is related to an increase in sewage disposal costs from GLWA and the Oakland County Resources Commissioner (OCWRC).  This portion of the rate is determined by entities outside the control of the City. 

Approximately 25% of the rate increase is for funding infrastructure improvements.  The cost of replacing sewer lines is continuing to increase at a significant pace.  In order for the City to continue to make necessary improvements, the amount of funds generated from rates needs to increase.

Approximately 20% of the rate increase is the result of a decrease in the City’s water consumption.  Sewage disposal charges to customers are determined based on the amount of water used.  As the City’s water consumption declines, it increases the rate which is necessary to generate the same level of revenue.

The City’s maintenance costs decreased the rate by 15%.  The decrease is the result of lower operating costs and higher miscellaneous revenue.

Storm Water Rates
Storm water rates for the Evergreen-Farmington Sewage Disposal District increased 14% and the Southeast Oakland County Sewage Disposal District increased 7% as a result of an increase in storm water disposal costs from GLWA and OCWRC.
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:

Treated Water $2,260,890 Sewage Disposal           $4,777,660
Maintenance Costs   1,956,610 Maintenance Costs             1,381,360
Depreciation   1,070,070 Depreciation             1,223,040
Total Costs $5,287,570 Total Costs           $7,382,060
Additional Capital Funding      600,000 Additional Capital Funding                 800,000
Less:  Other Revenue    (877,000) Less:  Other Revenue               (175,190)
Net Costs $5,010,570 Net Costs           $8,006,870
Est. Units Sold (water)      817,900 Est. Units Sold (water)                 817,900
Rate          $6.13 Rate                      $9.79
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 May. 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 June) where they are approved.
Are we paying for Highland Park's unpaid water and sewer bill in our rates?

For fiscal year 2023-2024, the rates do not include any allocation of Highland Park's debt to the GLWA.
What is the City doing to keep rates down?
The portion of the water and sewer rate that the City controls is approximately 55% and 40% 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. 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.

* Represents cost outside of the City’s control

** City Maintenance net of other revenue

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 some communities because of various factors: 1) we are a combined sewer /storm water sewer system (which means we have to pay to dispose of the storm water), 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.
Water chart
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.  In addition, water customers can monitor their own water usage by registering their water account with Aquahawk. To sign-up for this service please go to https://birmmi.aquahawk.us.

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 1.7% for 2023-2024.
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.

Contact List

City of Birmingham
Water Department
Phone:  248-530-1830
Fax: 248-530-1070
e-mail:  water@bhamgov.org
website:  www.bhamgov.org

Water Resources Commissioner
Phone:  248-858-0958
email:  wrc@oakgov.com
website: www.oakgov.com/drain

Great Lakes Water Authority
Phone:  844-455-4592
email:  info@glwater.org
website:  www.glwater.org