2023-2024 Water, Sewer, and Storm Water Rates Frequently Asked Questions (FAQ)
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
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.
|WATER RATE||SEWER RATE|
|Treated Water||$2,260,890||Sewage Disposal||$4,777,660|
|Maintenance Costs||1,956,610||Maintenance Costs||1,381,360|
|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|
For fiscal year 2023-2024, the rates do not include any allocation of Highland Park's debt to the GLWA.
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.
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.
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.
City of Birmingham
Water Resources Commissioner
Great Lakes Water Authority