Water Rates Are Going Up

Just got the news rates are going up again folks God only knows why considering we pay the highest rates of any city around us. when I find out the reason why behind this lovely little water rate hike I will make sure to write it here on the blog. In the meantime I suggest that we write about it on our Facebook pages we call our city council members and we let them know that we’re not very happy about this and that we want them to answer to us as to why?

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42 thoughts on “Water Rates Are Going Up”

  1. grandmasuzanne610 , January 26, 2015 at 10:42 pm/, sorry I should’ve asked the following question: is the water and sewage rate include delivery and operations fees? You are correct about the rate itself, and indeed it’s a buyer/seller relation. The question will be about the needs to add the additional operational and delivery cost to the rates? Is that portion of the rate meets the three prongs as follows?

    “The Court noted that the fee failed all three prongs of the test for a valid user fee set forth in Bolt. Under Bolt, which also involved the validity of the City of Lansing’s storm water management fee, the Supreme Court noted that in order for a municipal fee to be considered a valid user fee and not an illegal tax, the fee must (1) serve a regulatory purpose rather than a means to raise revenue; (2) be reasonable and proportionate to the particularized benefit conferred to the user paying the fee and the costs to provide the service to that user; and (3) be voluntary.”

    The most important factor will be wither the need for the water fund reserve included the needs to use the reserve as a mean to provide loans to the general fund? And if in fact was a part of the calculations for the increase?

    Consultants assist municipalities to resolve situations and recommend solutions, but they don’t make policies. Elected officials make policies. If the city policy is making sure the water and sewage fund must be able to make loans to the general funds, than the consultant will recommend the rate increase to make sure the water reserve is funded.

    Elected officials should state the consultant’s recommendations including what they needed the reserve for.

    its very interesting to know, If Dearborn Heights general fund don’t need the water fund researve to borrow from what the water and sewage rate will be?

    The consultant should be able to study the correlation between the rate increase and the borrowing activities of the general fund from the water fund over the past 6 years.

    Sorry for the confusion?

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  2. Observer,

    No, I do not see the water rate as a fee. The Bolt article is talking about a fee that the city of Jackson wants to add to the water rate.

    Our water is a seller- buyer business transaction. The city buys water in bulk from Detroit and then turns around and sells it to us in smaller increments. Its like going to Kroger. Kroger buys a case of 12 bottles of Ragu Spaghetti Sauce for $12.00. Kroger turns around and sells it to us for $1.50 a bottle. We have the opportunity to either buy it at Kroger or go somewhere else where we can find it cheaper.

    However, since Dearborn Heights is the only one we can buy the water to our house from they can charge whatever they want and we either pay it or schlep 5 gallon buckets of water into our house to meet our water needs.

    However, some cities have been successful into getting their water rates reduced and even receiving refunds through legal action. When a city buries other charges in its water rate that are not directly related to the “delivery of water” this is considered an unconstitutional tax because it was not approved by a public vote. This is exactly what is happening in Dearborn Heights. If gas stations were doing this to us, the state would come down on them for price gouging. Remember after 911 how some gas stations were fined by the state for raising their prices so high?

    In January of 2014, Pleasant Ridge formed a 15 member – Citizen’s Advisory Committee to work with their City Commission to delve deeply into the city’s revenues and expenditures. This is what we need because of the lack of honesty, transparency and accountability from the mayor and some council members. Last year I asked the council to describe to me what the items were that they had just voted to pay for. They gave me the “deer in the headlights” look and Baron told me that they can’t be expected to know every little thing. One of the “little things” I asked them about was over $100,000.00.

    The purpose of having a council represent us has failed in Dearborn Heights and we either need to replace most of the council seats with people who will truly represent the citizens and not their special corps of idolizers or the mayor; or in addition create a Citizen’s Advisory Committee to make sure the council is doing what we elected them to do.

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  3. grandmasuzanne610, January 23, 2015 at 10:46 am, Do you think the water rate is a fee? And if its? Do you think it meets the three prongs as follows:

    “The Court noted that the fee failed all three prongs of the test for a valid user fee set forth in Bolt. Under Bolt, which also involved the validity of the City of Lansing’s storm water management fee, the Supreme Court noted that in order for a municipal fee to be considered a valid user fee and not an illegal tax, the fee must (1) serve a regulatory purpose rather than a means to raise revenue; (2) be reasonable and proportionate to the particularized benefit conferred to the user paying the fee and the costs to provide the service to that user; and (3) be voluntary.”

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  4. grandmasuzanne610, January 23, 2015 at 10:46 am, from the same artical:

    “The Court noted that the fee failed all three prongs of the test for a valid user fee set forth in Bolt. Under Bolt, which also involved the validity of the City of Lansing’s storm water management fee, the Supreme Court noted that in order for a municipal fee to be considered a valid user fee and not an illegal tax, the fee must (1) serve a regulatory purpose rather than a means to raise revenue; (2) be reasonable and proportionate to the particularized benefit conferred to the user paying the fee and the costs to provide the service to that user; and (3) be voluntary.”

    http://www.mmbjlaw.com/news/article/municipalities-must-continue-to-analyze-validity-of-user-fees-in-light-of-recent-michigan-court-of-appeals-cases

    The Headly Overide dos not change the needs for any “valid user fee” to meet the three prongs requirement. Pleease read, analyse and compare for similiraty.

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  5. Observer, we may have a problem in regards to the article you referenced. Here is the paragraph:


    In County of Jackson v City of Jackson, the Michigan Court of Appeals relied on the Michigan Supreme Court case of Bolt v City of Lansing, 459 Mich 152 (1998), to invalidate the City’s storm water management fee declaring the City-wide fee an illegal tax imposed by the City without an approving vote of City electors, in violation of the “Headlee Amendment” to the Michigan Constitution. The City charged the fee to all parcels within the City as a means to generate revenue to operate and maintain the City’s storm water system. Each parcel was charged a fee based upon the parcel’s pervious and impervious surface area, although residential parcels of less than two acres were charged a uniform flat fee irrespective of the parcel’s pervious and impervious surface area. Property owners could reduce the fee by gaining “credits” that would offset the fee, but could not eliminate the fee.


    In November of 2011 the residents of Dearborn Heights voted to override the Headlee Amendment so we no longer have it to protect us. We not only increased our property taxes but at the same time unknowingly gave our power to vote down the type of water increases that the city is flagrantly pushing down our throats now. We have been duped again by the crying of wolf. When will we ever learn.

    Also in figuring out how much the city is making off the water rates using my method of per unit of water. Your figure and mine are pretty much in line.

    The city is not taking a 25% but a 100% cut from our water bills (after the cost of water from DWS is figured in.

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  6. Councilwoman Lisa Hicks-Clayton, January 22, 2015 at 10:45 am, the fact that you continue this public dialog indicate your true genuinely as public servant, you earned the trust and the respect of your neighbors as I heard several stories about your height level of ethic and integrity, To me as much as its for them and other voters who casted their votes for you, you are so far the real deal in Dearborn Heights politics.
    Please ask the comptroller and Plante Moran if the 25% reserve is needed only to keep the water fund activities going during the fiscal as a working fund capital in addition to been a contingency for the fund responsibilities?
    The other question is: Did you voted yes/no on any loans from the water fund to the general fund? And how much was the latest loan? And why you voted either way?
    Please check out if providing loans to other city funds is an approved activity of the water fund? And if the water and sewage rate analysis by the analyzers factor out /include that variable in their analysis/study? Also, if the 25% reserve recommendations are accommodating for that variable?
    Please remember that the water fund created for specific and limited functions without voter’s approval for rates and fees, I found the following article to be helpful in understanding the related regulations.
    Please review the following article:
    http://www.mmbjlaw.com/news/article/municipalities-must-continue-to-analyze-validity-of-user-fees-in-light-of-recent-michigan-court-of-appeals-cases
    All city funds should be healthy, therefore addressing and resolving each fund issues separately is the best way to serve the residents and keep the city safe and solvent.
    Councilwoman, your transparency is amazing, and your diplomacy is dazzling, and you need both to accomplish your goals.

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  7. Hello bloggers, you can click and read the full article by “Mika Meyers Beckett & Jones Law Firm”
    Title:
    “Municipalities Must Continue to Analyze Validity of User Fees in Light of Recent Michigan Court Of Appeals’ Cases”
    The last paragraph of the article reads as follow:
    “Michigan municipalities must continually review municipal user fees and charges in light of the Bolt analysis and case law following to ensure that municipal user fees and charges comply with Bolt’s three-pronged test and are valid user fees and not invalid taxes.”

    http://www.mmbjlaw.com/news/article/municipalities-must-continue-to-analyze-validity-of-user-fees-in-light-of-recent-michigan-court-of-appeals-cases

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  8. Current Water Billing Period 20014/2015

    $3.76 what residents of Dearborn Heights pay for one unit of water.

    $0.77 what Dearborn Heights pays for one unit of water from DWS

    $2.99 left over after cost of water is deducted

    $2.99 x 25% (to maintain a healthy water fund) = $0.75

    $2.99 – $0.75 (maintain a healthy water fund) = $2.24 Extra

    Why are cities that are two and three times our size (with many more miles of pipelines, pumps etc.to maintain and repair, and the same fees/costs imposed by government agencies as Dearborn Heights is) can charge their residents so much less?

    Regardless of the reasons our comptroller lists – all cities have the same reasons, yet do not charge their residents the high rates DH charges us. I have heard from several people that Plante Moran say that in order to balance the budget we need to raise water rates; since I like to deal in facts can someone here post where this came from?

    If the above statement is true than is it okay with the citizens of this city to pay higher water bills in order to balance the mayor’s budget at the end of the fiscal year?

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  9. February Office hours for Councilwoman Lisa Hicks-Clayton :

    Monday, Feb. 2, 10:00 a.m. Berwyn Senior Center
    Tuesday, Feb. 3, 10:00 a.m. Eton Senior Center
    Saturday, Feb. 7, 1:00 p.m. Carolyn Kennedy Library
    Monday, Feb. 16, 10:00 a.m. Berwyn Senior Center (combined with State Rep. Julie Plawecki and Wayne County Commissioner Diane Webb)
    Monday, Feb. 16, 11:30 a.m., Eton Senior Center (
    combined)
    Tuesday, Feb. 17, 10:00 a.m., Eton Senior Center

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  10. Dear Observer,

    I would welcome a call or meeting with you, and any others, to further discuss this issue. I take into account past years numbers, as well as projected, future liabilities,bonds, etc. This information in provided by our comptroller with back up documentation. The “healthy” reserve of 25% of budget is a recommendation by the comptroller and Plante Moran. In addition, the City Council will offer a q&a study session for our residents. I hope you will be able to attend.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  11. Our water fund is so flush with money that last March council gave permission to the treasurer to borrow and transfer 4 million dollars to the general found to make ends meet for the end of the fiscal year in June 2014. Supposedly somewhere along the line the water fund is paid off with interest. My question is, when was this money paid back into the water fund?

    Its a shell game when it comes to the water fund. The mayor submits an unbalanced budget knowing the water fund will make up for the shortfall come the end of that fiscal year. This will keep the state off his back. Meanwhile the water fund budget takes a hit and on paper it looks like we do not have enough money in the water fund and then uses this to increase our water rate.

    Lets take a look at another city to compare water rates with;
    (2013-2014 Fiscal Year)

    Taylor paid $0.64 wholesale for 100 cubic feet/unit of water from DWS.
    Taylor charged their residents $2.46 for 100 cubic feet/unit of water.
    Taylor profited $1.82* per each unit of water
    Taylor is 23.64 square miles (twice the size of Dearborn Heights)

    Livonia water rates. For the 2013-2104 fiscal year.
    Livonia paid $1.07 wholesale for 100 cubic feet/unit of water from DWS.
    Livonia charged their residents $1.69 for 100 cubic feet/unit of water.
    Livonia profited $0.62* per each unit of water
    Livonia is 35.86 square miles (three times the size of Dearborn Heights)

    Dearborn Heights water rates for the 2013-2014 fiscal year.
    Dearborn Heights paid $0.73 for 100 cubic feet of water from DWS.
    Dearborn Heights charged their residents $3.46 per 100 cubic feet of water.
    Dearborn Heights profited $2.73*.”
    Dearborn Heights is 11.75 square miles.

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  12. Councilwoman Lisa Hicks-Clayton , January 20, 2015 at 3:34 pm, I added all the proposed water fund expenditures between July 1, 2014 and June 30, 2015 minus the proposed water fund revenues for the period as you reported = $ 3.9 million + $4.3 million surplus at the end of FY 2013-14 as of June 30 2014, Therefore the projected surplus as of June 30, 2015 will be $8.2 millions not $ 1.6 million as you stated in your response on this blog on 1/20/2015 at 3:34 pm.

    $8.2 MILLIONS of projected water fund reserve! WOW. Unless I’m missing some figures, please correct me.

    Let’s assume the 5-6 years yearly average expenses of the water fund is $20 million, 25% of that is $4 Millions not $8.2 million?

    SO why, the city need rates increase? May be we needs rate decrease?

    Also, what and how you come up with the 25% the fund needs to maintain as surplus on yearly basis? The water fund retained earnings/surplus should be calculated to serve the water fund only.

    Furthermore, Please take in consideration that forecasting for adequate fund reserve/surplus/retain earning/rainy fund/safety net or whatever you wana name it, will be normally based on actual accounting historical last 5-6 years figures of the total amount of what needed above the budgeted figures plus any needed adjustments based on what is known professionally, Value analysis (VA) or Cost–benefit analysis (CBA), sometimes called benefit–cost analysis (BCA) that usually done for construction or manufacturing including the cost of the project/materials/labor/….

    In addition the Credit Quality Method may be used, normally its 10% of previous year budget.

    Also the Liquidity Method may be used to calculate the cash the city needs to carry the water fund operations on monthly basis, and that amount should be at hand as cash balance in the retained earning line item. The cost of the monthly operations is streamlined using VA/CBA/BCA.

    The municipality should adopt the higher figures of the two methods +/- any amount resulting from additional studies of unique characteristic of the municipalities, plus any fund operational contingencies.

    In short and sweet term, the water fund retained earnings/surplus is the fund “working Capital”. plus unforeseen expenses.

    The water fund can makes loan to other municipal funds to make ends-meat, but municipalities can’t raise rates/fees to boost the water fund surplus for non fund related activities.
    Again I’m not opposing to the 25% or whatever surplus the city needs, just explain what the 25% represent.

    Please check the following website

    http://www.mmbjlaw.com/news/article/municipalities-must-continue-to-analyze-validity-of-user-fees-in-light-of-recent-michigan-court-of-appeals-cases

    One more time, thank you councilwoman, and hopping the communication is mutually helpful,

    Like

  13. Please note, I need to make a correction on the posting below. I made a mistake and thought it came from Troy, This is incorrect, the following statement was sent to me to my by Jerry. I apologize for this error.

    Jerry not Troy asked me to post this on the Truth Page from January 19, 2014 at 4:57pm.

    There needs to be an outcry by the residents. No question in my mind we have taxation without representation. Worse than that the Nov. 2011 flood lawsuits were paid illegally and also attorney fees. Everyone knows this flood was caused by heavy rains.

    The sharing of sewers with water lines has nothing to with it. Plant & Moran is part of the problem. When I questioned Plant & Moran on this issue their answer to me was
    ” if we didn’t pay it from the water fund, the taxpayers would have to pay it from real estate taxes” . That’s where it should come from & is a huge difference. The water users should not foot the cost for anything other than the cost of clean water received from Detroit & used water returned for treatment .

    The water fund is being used for mismanagement of this city. For instance, whoever heard of dept. heads not having goals & reviewed at least yearly for their performance ? No, they do as they please. The city council accepts their word for everything. You know what that leads to. But shame on the so called mayor for not managing. But that would force him to work.

    The voters don’t know what bad leadership we have. This makes an oversight committee for the water budget very important. Suzzy , if u can transfer this to the truth pg please do so. By the way, there r severe penalties for misuse of water funds due to the city government can simply raise water rates without tax payer consent or water user consent.

    grandmasuzanne610 , January 19, 2015 at 4:57 pm

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  14. Water fund surplus/ reserves, at an optimal, healthy level would be 25% of operating expenses, or approx. $6 million. At the end of 2014, the balance was $4.3 million. By the end of June, 2015, it is projected to be $1.6 million. This reserve accounts for future liabilities. It is my goal to bring forward a public meeting, with Plante Moran, presenting and open for Q & A, regarding the water budget, expenses, liabilities and water rates, which are smoothed.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  15. Councilwoman Lisa Hicks-Clayton , January 20, 2015 at 9:36 am, Sorry councilwoman, May be I should ask the following question:

    What is the current $$$ of the water fund surplus?

    I can’t locate the figures. I just want to know if we have a healthy water fund reserve to be able to maintain our water and sewage pipelines, our homes values are related to the city financial strength, and funds reserves are indicators for healthy financial status. The city should have a target amount for the water fund surplus and should maintain that amount plus or minus any yearly adjustment needed.

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  16. Observer

    As I said before I think that some of these questions should be asked by you at a council meeting to the whole council and the head of the water department. All responses from the councilwoman are up here on the blog you can also go to her Facebook page and there are some of the links on the Truth Page Facebook Page. It’s important to note that the water rate increase was voted on in Septemeber with very little interest from the public. I for one didn’t know anything about it that isn’t a big surprise while they say it’s made public where it’s made public is key. Nothing was posted here I didn’t see a notice on any Facebook Page and I try my very best not to go to the City website I hate that site. So while they (the powers that be) ‘publicized’ the increase how hard did they try to really publicize it? It’s all relative something like an increase in our already very high rates I think would have gotten some people to the meetings. At the very least some calls and emails sent to council members.

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  17. Dear Observer,

    I have answered your questions, including the amount of water budget on Friday, January 16th and Saturday, January 17th. I have posted links which will take anyone directly to the on-line budget document. I have posted additional information regarding rate comparisons with local municipalities and provided links with back up documentation. In addition, I have stated, as a Council, we are working to establish a study session to answer all questions in a public meeting. In addition, I have explained the fundamentals of establishing rates, they why’s, due to existing liabilities, bonds commitments, water / sewer line maintenance, assets management, etc. Please review the previous postings including 1/16/15:

    Question 1-The Water Department budget, 26 pages in total, features several elements or categories/ accounts. These include:

    Revenue: $24,904,493
    Expenses/ admin/general: $3,734,832
    Expenses/ water trans/ distrib: $ 16,567,418
    Expenses/ water tapping/ install: $ 102,118
    Expenses/ meter reading: $ 28,969
    Expenses/ sewer maintenance: $ 529,467
    Expenses/ Water Dept. retirement which includes W.C. Basin SRF Interest & principle, Upper Rouge Tunnel Interest & principle, etc.

    I would be happy to sit down and share this information in detail or can e-mail. It is public information and may be requested. The previous information and links provided, share provide pertinent information regarding water rates. I have listed by phone number for your convenience.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  18. grandmasuzanne610 , January 19, 2015 at 4:48 pm, Do you know if the city have a job qulifications for the water department director. Troy raised a valid question about performance review that in the private sector is done yearly.

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  19. Councilwoman Lisa Hicks-Clayton , January 19, 2015 at 6:14 pm, I respect your unability to answer some of the questions. So, you don’t know or can’t disclose the $$$ of the water fund balance? Is the figures are not public information?

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  20. Please note, Plante Moran completes an audit every year. Plante Moran is an independent auditor of Michigan municipal governments and other states, as well. The City of Dearborn Heights audit results were shared in a study session- open to the public. Civic engagement is the key to being informed and of great value to our elected officials. We will work at organizing a public meeting to answer all your questions and concerns with the water budget. In addition, the flood meeting is still in the works, Possibly, Feb. 3 or 17th. I will post as soon as this information is confirmed. I will share a date for water budget/ fund questions, as soon as it made available.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  21. Troy asked me to post this on the Truth Page.

    There needs to be an outcry by the residents. No question in my mind we have taxation without representation. Worse than that the Nov. 2011 flood lawsuits were paid illegally and also attorney fees. Everyone knows this flood was caused by heavy rains.

    The sharing of sewers with water lines has nothing to with it. Plant & Moran is part of the problem. When I questioned Plant & Moran on this issue their answer to me was
    ” if we didn’t pay it from the water fund, the taxpayers would have to pay it from real estate taxes” . That’s where it should come from & is a huge difference. The water users should not foot the cost for anything other than the cost of clean water received from Detroit & used water returned for treatment .

    The water fund is being used for mismanagement of this city. For instance, whoever heard of dept. heads not having goals & reviewed at least yearly for their performance ? No, they do as they please. The city council accepts their word for everything. You know what that leads to. But shame on the so called mayor for not managing. But that would force him to work.

    The voters don’t know what bad leadership we have. This makes an oversight committee for the water budget very important. Suzzy , if u can transfer this to the truth pg please do so. By the way, there r severe penalties for misuse of water funds due to the city government can simply raise water rates without tax payer consent or water user consent.

    Like

  22. I completely understand what goes into the water rates besides just providing water.
    I read several articles on the subject when I was exploring the water rate issue last spring. All the fees/expenses that Dearborn Heights has is the same for every other city. My issue is why can these other cities charge their residents less for water while Dearborn Heights charges their residents the enormous rates they do. What other fees/expenses does Dearborn Heights have that all these other cities don’t to justify our high rates?

    Here are some more rates from my last years research.

                Cost of Water       They Charge                         Square
    

    City From Detroit Their Residents Profit Miles
    Dearborn Heights $0.73 $3.46 $2.73 11.75
    Romulus $0.76 $2.64 $1.88 35.96
    Taylor $0.64 $2.46 $1.82 23.64

    Remembers DWS sells it’s wholesale customers in increments of 1,000 cubic feet and Dearborn Heights sells it to us in 100 cubic feet increments. The above is also from the DWS 2013/2014 DWS Wholesale Rates.

    When I looked up how much DWS charges us for water (This Does Not Include the Sewer Charge) for the current year 2014/2015 the wholesale cost of water that Dearborn Heights is paying to the DWS for 100 cubic feet has gone up to 77 cents. That is just a 4 cent increase from last year!!!! However, to hear some on the council spin it, the DWS is charging an exuberant amount and is the reason Dearborn Heights has to increase their water fees so much to their customers.

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  23. Oh Troy, I am really showing my age. Lucy is from the 1950’s comedy ” I Love Lucy”. Lucy was always getting into some kind of hilarious trouble and a famous line in the show was when her husband Desi (they were married in real life) with his Cuban accent would pronounce “explaining” as “splaining”.

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  24. Livonia residential customers are charged $3.63 for every 100 cubic feet (750 gallons) of water purchased. This is comprised of $1.56 for sewage related expenses and $2.07 for potable water expenses. These rates are established based upon the service fees Livonia pays to the Detroit Water and Sewerage Department for providing our water and sewage treatment.

    http://www.ci.livonia.mi.us/Departments/WaterandSewerDPWandFinanceWaterAccounting/WaterandSewerRates.aspx
    Another example:

    Novi’s retail customers currently pay $4.13 for water and $4.30 for sewer (per
    1,000 gallons of metered water). This revenue covers the following costs.

    Water and sewer rates will frequently change from year to year for different reasons. The current year water rate increases are largely the result in an increase in operating costs such as operating supplies, equipment rental, depreciation expense, and personnel benefits such as medical insurance and retiree health care costs.

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  25. drheights48127 , January 18, 2015 at 10:43 am, were I find the water fund budget on city website? I see only the general fund budget on the man page and under the water payment department no rate or budget is listed. If the other council members cares to answer, they can post publically anywere they want or adress the subject during the council meetings, or publish their point of view on the pages of the press and guide.

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  26. Suzanne:

    This is great work:

     "Regarding Livonia water rates. For the 2013-2104 fiscal year.
      Livonia paid $1.07 wholesale for 100 cubic feet/unit of water from DWS.
      Livonia charged their residents $1.69 for 100 cubic feet/unit of water.
      Livonia profited $0.62* per each unit of water
    
     Dearborn Heights water rates for the 2013-2014 fiscal year.
     Dearborn Heights paid $0.73 for 100 cubic feet of water from DWS.
     Dearborn Heights charged their residents $3.46 per 100 cubic feet of water.
     Dearborn Heights profited $2.73*."
    

    This is incredibly important and I think this needs to be emphasized and as you noted “some splaining” needs to happen (not sure who Lucy is though LOL)

    Let’s FLOOD (pun intended) the meeting with follow up questions since you already asked some questions last week that were not answered or Re-directed to Mr. Brooks. (Mr. Brooks does not sit on the boards and committees nor does he set the rates to our water bill).

    PRESS ON!

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  27. Not all lawsuits are paid for from the ‘water fund’ only suits related to water. Anything, that’s related to water is paid for from this fund. If DPW trucks have to fill up on gas and they are used in any way for water related use that fuel is paid out of the water fund. When they fill up that tank at the DPW yard with fuel a portion of the cost is paid for by the water fund. Trucks do go out and repair water main breaks and so on the fuel the truck used isn’t paid for from the DPW department budget.

    Now the question is how do they keep track? I have no idea how they do or even if they do. I would think that if the ‘water fund’ is going to pay let’s say $10,00.00 of a $20,000.00 fuel invoice. I would think that they do have some way of showing that the DPW trucks used that amount of fuel for water related issues.

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  28. Observer

    I think some of your questions are good ones to ask at a council meeting for the whole council to have to respond to along with the person in charge of the water department/water fund. The budget is on the City website for the public to look at. councilwoman Hicks-Clayton has put in her E-letter that she will be posting the date of the meeting. She is one person on that council I think it’s time to start calling or emailing and hope for a reply from the rest of the council members. Time to start asking all of them the same questions is what I’m trying to say, see how they feel about adding more money to our taxes. Let’s find out how they feel about raising our water rates and why? How did the rest of them vote on this and why?
    I agree with Grandmasuzanne610 that this is outrageous and I’ve had my own theories on this for a very long time. When you look at cities smaller than our own paying far less you have to question the why?

    Here is what Grandmasuzanne610 said,

    Regarding Livonia water rates. For the 2013-2104 fiscal year.
    Livonia paid $1.07 wholesale for 100 cubic feet/unit of water from DWS.
    Livonia charged their residents $1.69 for 100 cubic feet/unit of water.
    Livonia profited $0.62* per each unit of water

    Dearborn Heights water rates for the 2013-2014 fiscal year.
    Dearborn Heights paid $0.73 for 100 cubic feet of water from DWS.
    Dearborn Heights charged their residents $3.46 per 100 cubic feet of water.
    Dearborn Heights profited $2.73*.

    *Understandably, some of the profit has to go towards maintenance and repair.

    However, Livonia is 35.86 square miles, Dearborn Heights is 11.75 square miles. Livonia is three times larger than Dearborn Heights and as such has 3X the amount of pipes, pumps etc. that need to be maintained and repaired; their water infrastructure is almost as old as Dearborn Heights.

    Can someone tell me why does our city have so many lawsuits against our water department that this factor needs to be weighed in on our water rates? OR are all city lawsuits paid for through the water fund since we are self-insured? If so, I have been advised that this is illegal.

    How does the distribution of our water affect the environment? In my 50 years of living in this city I have never heard of water from our water system impacting the environment in such a way that it would also factor in our water rates. Storm water and sewage water – Oh yeah! That not only impacts the environment but the health and welfare of our citizens. Is the water fund paying to clean up the mess caused by the flooding? We pay sewer rates to have our wastewater taken away and yet it comes back to us every time the rainfall is over 1/4 inch. Are the damages and claims caused by flooding coming from the water fund? This would be not only wrong but sounds illegal to me.

    Fact: In March of 2014 the council was asked to approve a request that would give our treasurer the power to borrow several million dollars from the water fund (and the library fund) in order to meet the end of year shortfall for the mayor’s budget. Is the water fund being used every year to bolster the unbalanced budget? Why not give us reasonable water rates and balance the budget?!

    The sewer charge is a whole “nother” ball of wax. I have done some preliminary investigation regarding sewer rates. I have found that Dearborn Heights charges us a lot more for our sewage than they have to pay to DWS and that extra also adds to the water fund coffers.

    We have no control over our water/sewer rates; unlike taxes where we can yea or nay them. You figure with the huge profits (accounting for repair and maintenance) that is being made with our water/sewer rates and the 3 million plus dollars that flows into the city coffers every year via the Headlee Override; our city hall should be open 5 days a week, our streets should be cleaned once a week and our first responders should have the newest and best equipment out there. Just where the heck is all this money going? “Lucy, you have some splaining to do”

    How I got the information on water rates.
    DWS has what it charges its wholesale customers (suburbs, townships, etc.) posted on their site. However, I think the new rates for 2014-2015 are up there now. Councilwoman Hicks-Clayton posted the old rates (2013-2014) here on the Truth Page a few days ago.

    Check a past water bill from 2014 for what Dearborn Heights charged us for a unit of water. Note, Dearborn Heights buys water from DWS in increments of 1,000 cubic feet and charges us in increments of 100 cubic feet so the rate listed on the DWS form is for 1,000 cubic feet-since 100 goes into 1,000 ten times, divide the number on the DWS form by 10 to get how much each unit of water is costing wholesale. Next look at your bill, divide the total you are paying for water by the number of units the city is charging you for water. Do the math and you have the answer.

    You can do a current water rate check by using the above formula (family, work and health issues have prevented me from putting together a 2014-2015 rate sheet). Some cities post their water rates on their websites (like Livonia and Romulus); however, you will have to either call or email the water departments of other cities to find out how much they are currently charging their residents.

    Let the numbers and facts speak for themselves.

    Like

  29. Councilwoman Lisa Hicks-Clayton, January 17, 2015 at 2:08 pm, Good job, given that you are part time elected official. I can’t find the info so please post them if they are public:
    1- What is the total $$$$ of the water fund balance, it should be an easy one for a council member!
    2- Did you voted yes/no in the past to approve the city general fund to borrow millions from the water fund? Please explain the reason either way.
    3- 5 residents attended the public hearing? Do you call that participation? Your meeting attracted 5 times that number??
    4- Can you include if possible an invitation to the promised future flooding study session in the water and sewage statements? Let’s test a new informative way to increase taxpayer’s participation.
    5- Can you please state in $$$$ how much the city need to maintain as “Water Fund Balance” again it should be an easy one for a council member to answer or to get an answer from the department director.
    6- Do you know if the city has on record job qualifications for the director of that huge operation with an annual budget of $24,904,493.00?
    Again, your leadership and accounting knowledge is evident, but accounting is about numbers and dollars, if you know the figures, just post them if they are public info. Most people understand how to balance an account, and what an account balance is, and when they spend more then what they have in their account, or what they anticipated/forecasted will have in their account based on their historical income.
    Councilwoman Hicks-Clayton, I’m very happy that I voted for you. I support healthy water fund balance and healthy general fund balance to ensure adequate city services comparable or better than our neighboring cities to keep our city clean and safe.
    Councilwoman Lisa Hicks-Clayton, transparency lead to trust and trust lead to cooperation and cooperation lead to more options and more options lead to better decisions and better decisions lead to better results and better results lead to confidence and confidence lead to better leaders and better leaders lead to better operation and better operation needs transparency to stay that way. It’s a complete leadership circles that keep circling around transparency.
    Practicing the art of transparency is effortless and is the magic key to public services, and you are trying to be as transparent as possible.

    Like

  30. Regarding Livonia water rates. For the 2013-2104 fiscal year.
    Livonia paid $1.07 wholesale for 100 cubic feet/unit of water from DWS.
    Livonia charged their residents $1.69 for 100 cubic feet/unit of water.
    Livonia profited $0.62* per each unit of water

    Dearborn Heights water rates for the 2013-2014 fiscal year.
    Dearborn Heights paid $0.73 for 100 cubic feet of water from DWS.
    Dearborn Heights charged their residents $3.46 per 100 cubic feet of water.
    Dearborn Heights profited $2.73*.

    *Understandably, some of the profit has to go towards maintenance and repair.

    However, Livonia is 35.86 square miles, Dearborn Heights is 11.75 square miles. Livonia is three times larger than Dearborn Heights and as such has 3X the amount of pipes, pumps etc. that need to be maintained and repaired; their water infrastructure is almost as old as Dearborn Heights.

    Can someone tell me why does our city have so many lawsuits against our water department that this factor needs to be weighed in on our water rates? OR are all city lawsuits paid for through the water fund since we are self-insured? If so, I have been advised that this is illegal.

    How does the distribution of our water affect the environment? In my 50 years of living in this city I have never heard of water from our water system impacting the environment in such a way that it would also factor in our water rates. Storm water and sewage water – Oh yeah! That not only impacts the environment but the health and welfare of our citizens. Is the water fund paying to clean up the mess caused by the flooding? We pay sewer rates to have our wastewater taken away and yet it comes back to us every time the rainfall is over 1/4 inch. Are the damages and claims caused by flooding coming from the water fund? This would be not only wrong but sounds illegal to me.

    Fact: In March of 2014 the council was asked to approve a request that would give our treasurer the power to borrow several million dollars from the water fund (and the library fund) in order to meet the end of year shortfall for the mayor’s budget. Is the water fund being used every year to bolster the unbalanced budget? Why not give us reasonable water rates and balance the budget?!

    The sewer charge is a whole “nother” ball of wax. I have done some preliminary investigation regarding sewer rates. I have found that Dearborn Heights charges us a lot more for our sewage than they have to pay to DWS and that extra also adds to the water fund coffers.

    We have no control over our water/sewer rates; unlike taxes where we can yea or nay them. You figure with the huge profits (accounting for repair and maintenance) that is being made with our water/sewer rates and the 3 million plus dollars that flows into the city coffers every year via the Headlee Override; our city hall should be open 5 days a week, our streets should be cleaned once a week and our first responders should have the newest and best equipment out there. Just where the heck is all this money going? “Lucy, you have some splaining to do”


                                  How I got the information on water rates.  
    

    DWS has what it charges its wholesale customers (suburbs, townships, etc.) posted on their site. However, I think the new rates for 2014-2015 are up there now. Councilwoman Hicks-Clayton posted the old rates (2013-2014) here on the Truth Page a few days ago.

    Check a past water bill from 2014 for what Dearborn Heights charged us for a unit of water. Note, Dearborn Heights buys water from DWS in increments of 1,000 cubic feet and charges us in increments of 100 cubic feet so the rate listed on the DWS form is for 1,000 cubic feet-since 100 goes into 1,000 ten times, divide the number on the DWS form by 10 to get how much each unit of water is costing wholesale. Next look at your bill, divide the total you are paying for water by the number of units the city is charging you for water. Do the math and you have the answer.

    You can do a current water rate check by using the above formula (family, work and health issues have prevented me from putting together a 2014-2015 rate sheet). Some cities post their water rates on their websites (like Livonia and Romulus); however, you will have to either call or email the water departments of other cities to find out how much they are currently charging their residents.

    Let the numbers and facts speak for themselves.


    Like

  31. Questions 1,2, and 5 may be found by accessing the city’s website at http://www.egovlink.com/dearbornheights/docs/search/search.asp

    Question #4- less than five residents were in attendance, in addition, Department Heads, City Council Members, Administration and support staff.

    Question # 5- I will have to research to get this answer. I will follow up on Tuesday, Jan 21st, as Monday is a holiday.

    Question #6- the information, including City Council cover pages (announcements ofr study sessions/ meetings), City Council minutes, budgets, minutes from boards and commissions, etc. may all be found on the city’s website, Assessor/ Ergovink. Please visit : http://www.egovlink.com/dearbornheights/docs/menu/home_ada.asp

    Question #7- Director of the Dearborn Heights Department of Public Works is William Zimmer, (313) 791-6000

    Question #8- I voted yes. After careful consideration of trends (water main breaks, repairs, expenses, bond payments), consideration of the independent accountant report and analysis, as well, as understanding the smoothing of previous, current and projected rate increase. I support the smoothing of rates versus hitting out residents with double digit rate increases. There are many factors which must be considered, including lawsuits, as the City of Dearborn Heights is self insured, and environmental issues which impact water rates. I have previously provided the documents utilized in the decision making process. In addition, via my office hours, I discussed the water rate proposals with attending residents ( 23 total). The City Council vote on the Water Budget FY 2014/2015 was 7 supports, 0 nays.

    Question #10- Municipal governments exist to provide a wide range of basic services on which we all depend: police and fire protection, streets and sidewalks, water and sewer systems, libraries and parks, to name a few. The ability of cities to provide this wide range of services rests on their financial decisions. In recognition of that fact, local government decision makers, citizens, and the media focus a lot of attention on how much money a city spends and how it raises that money. Put another way, expenditures, taxes, and debt occupy the public’s attention. But the attention of municipal finance officials is also focused upon another aspect of government finance–their city’s general fund balance and the water fund budget. .

    The very term “fund balance,” however, is often misunderstood. Some common misconceptions are that fund balance is a “savings account,” an amount of surplus cash, or in less kind terms, a “slush fund.” In fact, fund balance is nothing more than an accounting construct. It is the difference between a governmental fund’s current assets—cash, short-term investments, inventories, receivables, and other unrestricted assets expected to be available to finance operations in the immediate future—and its current liabilities. A positive difference of current assets over current liabilities gives an indication of the resources immediately available to finance ongoing operations. We are anticipating the future health of the City’s funds, general and water, to preserve and maintain services for the residents of Dearborn Heights.

    As an elected official, we are sworn by oath and City Charter, to do what is in the best interest of the City and our residents.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member

    Like

  32. Councilwoman Lisa Hicks-Clayton , January 16, 2015 at 4:16 pm, You are one of the few real-deals elected officials, and without further promotion to a shining and emerging political local star, bellow are my comments:
    1- I’m assuming that the water budget is for fiscal year 2014-15, and based on the posted budgetary figures, the estimated surplus for this one fiscal year of the water fund will be $3,941,689.00, plus whatever fund reserve we have at the end of fiscal year 2013-14!
    2- What is the water fund reserve we have at the end of fiscal year 2013-14?
    3- How much in $$ the city water fund reserve should be? “A healthy water fund reserve”?
    4- How many property owners attended the water budget public hearing? Why not sending a notice in the mail with the water and sewage statements informing the payers about the proposed water and sewage rate and ask for their input? No added cost, but empowering and encouraging public participation.
    5- What is the difference between the Dearborn Heights water and sewage rates and the city of Livonia rates?
    6- Why the water and sewage budget is not posted under the city Water Payment Department? Including the rate analysis similar to Livonia Model?
    7- Who is the director of the city huge (about 60% the city general fund budget) water department? And what educational and municipal experience the city requires for that highly technical and very important post?
    8- Did you voted yes/no on the rate increase? And why?
    9- Sorry didn’t know about the public hearing. I noticed the rate increase as most payers did! But that after the deal is done. If I was alerted to that fact with a notice with the water statement, then I could’ve had an opportunity to discuss the rate before the vote and all the above questions ahead of the vote. that may at that time helped you making your voting decision.
    10- What is the city definition and statement of purpose for the “Water Fund Reserve”

    My respect to you and my trust that you will represent the best interest of the city residents is established regardless of wither you follow-up on my comments and post the facts.

    Like

  33. Question 1-The Water Department budget, 26 pages in total, features several elements or categories/ accounts. These include:

    Revenue: $24,904,493
    Expenses/ admin/general: $3,734,832
    Expenses/ water trans/ distrib: $ 16,567,418
    Expenses/ water tapping/ install: $ 102,118
    Expenses/ meter reading: $ 28,969
    Expenses/ sewer maintenance: $ 529,467
    Expenses/ Water Dept. retirement which includes W.C. Basin SRF Interest & principle, Upper Rouge Tunnel Interest & principle, etc.

    I would be happy to sit down and share this information in detail or can e-mail. It is public information and may be requested. The previous information and links provided, share provide pertinent information regarding water rates.

    Questions 2 & 3: There was a public hearing and study session on September 16, 2014. All public hearings and study sessions are posted at City Hall, via the city’s website, and in the Press & Guide. In addition, I post the information on my Facebook Lisa Hicks-Clayton City Council Member page. The study session and hearing, including the budget analysis, was presented to the City Council, the Administration , and attendees (open meeting to the public), The information is available when requested, as well. The budget analysis was conducted by an independent accountant report. Do I support resident engagement and input? Absolutely! I advocated for our residents to have input at our study sessions. This was adopted by our City Council in 2012. Residents may ask or voice their opinions on a study session topic during study sessions.

    Question 4- I support networking with local municipalities. As an active member of the Southeast Michigan Council of Governments and the Michigan Municipal League, I have the opportunity to work with, problems solve and hear many great ideas and practices in local government. My goal is to bring these ideas to our city, as we continue to work together improving government services and increased efficiencies. I am very receptive of reviewing, considering and applying other local governments’ best practices.

    If you would like to further discuss, I would be more than happy to schedule an appointment and meet with you at your convenience. In addition, I have office hours each month. My next office hours will be Tuesday, January 20th, 10:00 a.m. at the Eton Senior Center.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  34. Councilwoman Lisa Hicks-Clayton , January 15, 2015 at 9:02 am, Thank you for posting great information about the Detroit Water Department. Please do the same and provide similar information about our city as follow:
    1- What is the current fiscal year 2014-15 water fund balance?
    2- Did the administration submit to the council a budget analysis for the water fund? That budget should contain the total expenditures and revenues specifically for the water fund.
    3- Why you did not request a public hearing to discuss publically the water and sewage increase? Don’t you think it’s a good public policy to seek the voters input about this subject?
    4- Why not looking at what our neighboring municipalities are doing regarding this subject, for example: city of Livonia website?
    http://www.ci.livonia.mi.us/Departments/WaterandSewerDPWandFinanceWaterAccounting/WaterandSewerRates.aspx
    Compared to our city “Water Billing Department”
    http://ci.dearborn-heights.mi.us/water.cfm
    5- What the city of Livonia have that we don’t, for them to be able to push-out all the information about the rate?
    If you care to answer, please be specific and respond to each question. And it’s OK to say “I don’t know “or “I will find out and report later”.
    It s very understandable that you are part time elected official, and you may not have all the answer.

    Like

  35. I apologize Councilwoman Hicks-Clayton when I think of the city council I forget to exclude you from the group as a whole because your work and energy outdoes all of the other 6 council members together.

    This report you referenced states the reasons for water rates and I concur whole heartily with these reasons. However, the question to answer is not what effects water rates but why Dearborn Heights charges the highest water rates in the Rouge Valley system to its residents. This answer is not found in any report out there. It takes digging and research.

    First, one needs to go city by city in the Rouge Valley System. Find out what each city pays for their water from DWS. This will vary for reasons described in the above report. Some cities post how much they pay for water from DWS on their websites and for some cities its like pulling a chicken’s tooth to get that information. Unlike taxes which need to be voted on, water rates can go as high as each city administration wants them. This provides a nifty little sum of money and is probably the reason some city’s don’t want to give out this information. There have been some cities caught increasing their coffers via the water fund and they have had to reduce their water rates.

    Second, because each city uses different terminology for a unit of water you need to find the common denominator.

    Third, Find out what residents pay for their water in each city according to the common denominator.

    Fourth, Subtract the amount each city pays for a unit water (common denominator- from DWS) from the amount residents pay to their cities per unit (common denominator) of water to see how much more they charge their residents.

    Interesting to note, after the above research, Dearborn Heights charges is residents the highest water rate in all the Rouge Valley District. So why is it the other cities can maintain and repair their water lines for way less than our city administration claims they need. Also to note, there are cities in the Rouge Valley that are much larger and older than Dearborn Heights who have more miles of water lines to repair and maintain yet don’t come close to charging their residents what Dearborn Heights charges its residents. .

    I and others would like to see an independent audit (not from the usual group of suspects either) of our water fund. I think our residents would be amazed and pretty angry at the results.

    Like

  36. Sharing the 2013/2014 Detroit Water and Sewage report. The water and sewage revenue requirements for suburban wholesale customers estimated at 3.5% increase for water and 3.7% increase for sewage. Page 10 illustrates the wholesale water rates listed by communities. Dearborn Heights at 7.32%.

    http://www.dwsd.org/downloads_n/about_dwsd/bowc/presentations/2014_public_hearing_booklet.pdf

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    Like

  37. This subject has several layers and points of interest for clarification and justification of any water rate voted and approved by City Council. Since being elected in 2012, I have reviewed statistics from local municipalities throughout Southeast Michigan. Many local municipalities, including Garden City, Plymouth and Canton, have experienced increase/decreases in water rates. For example, Plymouth had a double digit increase in previous years. Dearborn Heights has chosen to use a 5 year projection of anticipated rates from Detroit Water and Sewage. That amount is smoothed over the specified period. We must take into account the rates passed along by Detroit Water and Sewage, as well as consider sewer line breaks & cost, which are ever increasing, number of breaks, as well as repair costs, and consider other expenses which are allowed under the water fund. In addition, when water sales go down, utilities usually have to raise rates, and DWSD is no exception. Last year the average rate increase for a suburban community was 8.7%. More than 50 cents of every dollar received by DWSD is used to pay principal and interest on its debt. With gross revenue of $285 million in fiscal year 2010, this meant DWSD paid
    bondholders approximately $158 million. This debt is long term and totals more than $2 billion. Similar to a mortgage, DWSD has already refinanced the debt at the lowest interest rates currently available. When DWSD gets less revenue, it has to raise your
    rates to continue paying off the debt. I have included a link to a document (2010/2011) which provides some great information and perspective. The document includes the average of rates among metropolitan areas throughout the nation.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    (313) 633-1845

    http://ycua.org/PDFs/PuttingRateIncreasesIntoPerspective.pdf

    Like

  38. Up until the flooding of August 11, 2014 I was working on how outrageously high our water rates were compared with the cities around us. However, I got side-tracked with the flooding issue. I hope to have the water statistics ready in about a month.

    The Headlee Override got us out of debt and has provided a nice “extra” of at least 3 million dollars a year for the budget. However, it seems that isn’t enough and now they are trying to squeeze even more out of the residents by charging us more for water.

    I am willing to bet that not one council member did their homework on just how much this city is charging its residents for water compared to the cities around us (Rouge Valley System). If they had, they would have never voted to increase the water rates and would have decreased them instead. Yeah, who am I kidding they don’t care and would go with what the mayor wanted anyway despite what they would have found out.

    The sewage rates are another matter too. I think everyone who got flooded should have their sewage rates cut in half. As one resident put it, he was charged to have his sewage taken away only to find it in his basement and they are still charging him for sewage disposal.

    Like

  39. Yes, Council voted for this back in October or November. I think there was a study session on this too. Also don’t forget about the tax increase of $42.47 a year FOR 20 YEARS that starts January 2015.. That is a direct result of the 180 Million Dollar “loan to no where” that the county took out for the DSDS repairs.

    Like

  40. Lets not forget the bills coming im from the lawyers for the flooding ate coming out of the water fund. Anything else related to water or sewage is coming out of the water fund. Frankly this has gone unchecked for years. If the communities around us are using the same resourse for water and sewage and they are much less then us.

    Like

  41. Dearborn Heights government invoices properties owners in the city for water and sewage together, to the best of my knowledge the use the water usage as a base to charge for sewage discharge for the same property.
    Therefore, grass water and other outdoor water usage are included in the cost calculation on the properties owner’s bills. The more you water your lovely grass the more you pay. Greening your grass unfortunately costing you a lot of green’s $$$$$$, especially in Dearborn Heights since the water and sewage rate have gone up and kept going up without any public explanation. We should be happy the gas prices going down, so we can use some of that saving to pay for the water and sewage height rates. The high rate in comparison to neighboring municipalities may be a good environmental policy to conserve water and help save our natural resource.
    May be each neighborhood should get together and check with several lawn service contractors to see if it’s cheaper to water their lawns? That will save them time and some green’s!
    It’s very important to know the water fund reserve and if that comparable to neighboring municipalities? The city must have healthy water fund reserve, but not outrageous fatty one.

    Like

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