Water and Sewage Rates with 15% added for liability, maintenance and repair.

Via email an investigation by Suzanne Todd it’s come to light that the City of Dearborn Heights might just be charging the residents a wee too much. Here’s what she’s come up with.

Councilwoman Lisa Hicks Clayton writes  this,

The 10-15% is above the liabilities, for emergencies (unforeseen)- best practice in government and management.  You must add up all liabilities- set costs, infrastructure repairs, maintenance, equipment, labor, bonds, etc. Source: Email response from Councilwoman Lisa Hicks Clayton.

Suzzane Todd using  percentage given by the Councilwoman writes this,

Did a little more calculating and here is what I come up with.
If the water and sewage budget needs to have an additional 10-15% for liabilities, maintenance and repair, here is what we should be charged.  I have taken the higher percentage and will use 15% in my calculations.
Dearborn Heights buys water from Detroit for $.77 per 100 cubic feet or 1 unit.
15% of $0.77 = $0.12.   So we should only be charged $0.89 per 100 cubic feet of water or 1 unit.
Dearborn Heights is charged by Detroit $0.65 to process 100 cubic feet of sewage / 1 unit.
15% of $0.65 = $0.10.  So we should only be charged $0.75 to process 100 cubic feet of sewage / 1 unit Source: Email from Suzanne Todd

Here is a comparison City by City by Suzanne Todd look at what the City of Dearborn Heights charges residents for water.

screen shot water rates

 

#stoptheovercharge
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23 thoughts on “Water and Sewage Rates with 15% added for liability, maintenance and repair.”

  1. Sameoldstory says: April 16, 2015 at 3:48 pm, I’m very happy and greatfull for your ability to understand the water fund numbers, I’m also very happy that you follow the posting on this blog, plesae understand that if you have H/L of IQ in accounting or if you are a CPA, you are among very small group of the population. I understand your frustration about us who don’t comperhand accounting entries unless its very basic and at the general public accounting knowledge level, with all that said, please post your opinion about the water and sewage rate, I’m waiting to learn from your expertese about the subjet, at this time I thing the water rate is the heigh, but I will deffenetly chang my prospective with your assistance to help me understand the need to have such heigh rate. Remember that I’m for conserving natrural resourse, and love to see water comsuption go down.
    As popular thems say: Knowledge is waisted if its not published. Please don’t waist your heigh IQ level and your knowledge, you can energize us, the “lazy one” by extending your heigh energy and knowledge so you help us become as good as you are.
    Good bless your knowledge and continue to help you learning more.
    Please stop complanning about others, we are not “lazy”, simply we elect representatives to lead us with their knowledge, we just need basic and clear information.

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  2. SameOldStory – you are correct, once the information is obtained, individuals need to review it and form an opinion based on the facts, not just what they are told. If indeed you understand the documents provided, what are your thoughts on the 515% markup of the water rates in Dearborn Heights? You said you understood it? What do you understand?

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  3. Leadershipvacum—she basically hand fed the report to you. Quit being lazy and look it up. I did-I understand it. The time it took you to complain in your crybaby posts you could have looked it up for yourself. No wonder this city is the way it is….no body can do anything for themselves but cry. Way to be part of the problem!

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  4. It is not a matter of being “scared”, it is a simple matter of being effienct and using your time wisely. If, which I did, I provide all readers with the information via a legal document issued by an independent authority (Planet Moran) and approved by our City Council, submitted to the State of Michigan Treasury Department, as required by law, that document is the best means of accessing the information. I have even provided the page numbers and location of the answer question by question. I have read it, reviewed it, studied it- it is available for our resident to read the financial statements. It appears you wish for me to pull the information from the statements, found in the document and I have listed the page numbers you may find the financial statements, and manually type out the answers, which are already in print for your review. The answers are provided already. Question 1 was the beginning fund balance/budget amount for FY 2015. This amount may be found of page 14- year end 2014 (June 30, 2015) was $6,386.998. The year-end for 2014 would be your beginning for 2015 (July 1, 2015). Corporate funds liabilities and expenses, line item by line item is spelled out on page 14. Questions 2 and -4, see page 15-16, spelled out on the Statement of Net Position for the Water Budget. Example- current assets are $10,191,277. Restricted, capital and advances to other funds is $ $111,115,007. Total liabilities $27,208, 217. Water Fund operating revenue is $17,989,721. Water Budget operating expenses $17,868,178. Water Budget operating income is $ 121,543.

    You are invite to contact me directly with your questions. In addition, you are always welcome and encouraged to attend the water budget hearings and discussions. I have office hours the first and third Monday of each month at the Berwyn Senior Center. Office hours the first and third Tuesday at the Eton Senior Center. I am always available to meet with you at your convenience by appointment. I have been transparent and forthcoming. The questions and the back up documentation has been made available. In addition, this information is available via the City’s website or by request to the City Clerk’s Office.

    Serving Our Community,

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

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  5. Its halariouuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuus that the most respectable and honest and out spokin and open minded council member is kind scared to state the numbers that she know precisly were they are in a document. I guess she don’t want to be on record that she stated those numbers. what are the numbers Ms. councilwomen? Is the rates are wy heigh? Is the reserve is way above what needed in your opinion?
    Lets be clear about the utmost respect to the counselwomen, She is the most effective member on our council despite her un-ability to post the numbers.
    Thank you anyway for your best effort under watever restrections you may have.
    As for councilman Apigian, he is who he is, He don’t come to this blog and may be he don’t have a lawn to water every day or he don’t use any water for laundry. He may be pay less than $100.00 every 2 month that make him happy about the water bill. but when paying $400-500 during the warm days, than you feel the impact of the rates and if you are in Livonia you pay half your bill.

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  6. leadershipvacum

    You question has been answered the documentation has been provided to you it’s your turn to roll up your sleeves and find the answers for yourself. There will not be any further harassment of Councilwoman Hicks-Clayton allowed by you on the blog. To ask a question is one thing, but when the answer has been given more than once the documentation has been given to you to look at it. Instructions as to what page to find the answers on given there is nothing else that the councilwoman can do. This woman is an elected official so are the others sitting on that council. She has made herself available to us the only one who has. She meets with the residents provides her phone number here and on facebook to call her. She answers all emails sent to her. She looks into the concerns of residents and gets them the information they ask for. I’m sure others on the council in their own way do engage somewhat with the residents, but nothing like this woman does.
    If you think there is something SOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO special about those numbers please be plane and say it here. Why not just come out with ITTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT? The water rate issue isn’t a new one I wrote about it here a few years ago and nothing crickets I wrote about the service fee being charged. Crickets… How many showed up too the meetings to discuss the water rate increase? Was it publicised some place to make sure it got the most exposure? This subject is closed thank you for your understanding any further questions about water rates please Call Your Special councilman Ned Apigian. I’m sure because you said he’s so smart he will be able to give you all the answers you are looking for.

    Thank You
    Kathy Abdel-Hak

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  7. Page 14, 15 and 16 provide you with the information you had requested. It is clearly documented by the Plante Moran audit of the water budget. Balance sheets, assets liabilities, etc. I have answered your questions completely and provided back documentation.

    Statement of revenue and expenses on page 16.
    Reconciliation sheet page 15

    Everything is listed line item by line item. It is clear.

    Your questions:

    Q1- What was the Water fund balance at the beginig of FY 2015 on 7/1/15
    A1-page 18 (hint- year -end is the beginning for FY 2015)

    Q2- What is the total outstanding loans due to the water fund at the beginig of FY 2015 on 7/1/15
    A2-page 16

    Q3- What is the total expenses paid from the water fund in FY 2014 ended 6/30/2014?
    A3-page 15, age 17

    Q4-What was the total revenue for the water fund for FY 2014 ended 6/30/2014?page 14/17

    Let’s be more efficient and visit the statement pages. The answers are listed in the officials, City Council approved, and required by the State of Michigan Treasury Department document. Again, your answers have been provided, along with back up. It should be easy to read a balance sheet and statement. If not, please call me at (313) 633-1845.

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  8. Have no clue and very suprised why my 4 questions are very confusing and very scary to answer? So if the 4 questions been asked at city coucil meeting, I will be told to read the document and fishing for the 4 answers? Are you telling the readers of this blog that you know the answers but you shoose to teach us how to reaserch for ourself? I’m puseled by your judgement in this particular matter. The more you refuse to post the 4 answers the more mistery you surrownd this matter with. Please state throthfully why you don’t want to post the 4 answers?

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  9. The document s answer all questions. Please read pages 14-16. The information is made available to our residents. In addition, these questions were answered on previous post, same questions, same topic a few months back. Please review for your information. Our residents should be encouraged to seek the information, which is available via the city’s web site. I have asked the administrator to post the reports directly for YOUR convenience. If you chose to read , your will find your answers. Be empowered and knowledgeable.

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  10. Councilwoman, Why all those lenthy documents? Only 4 questions the water fund administrator should answer them in few minutes call by you! Why jamming the issue with tooooooooooooooooooooooooooooooooomuch information? When you can get them in few? why is sooooooooooooooooooooooooooooooooo difficult to just state those numbers? What is the hold? What is soooooooooooooooooooooooooooooooooo special about those number? Just curious councilwoman about the fact that you can’t get those numbers yourself, or they are not available, or they don’t exist on record? Or only availble for officials in close-sessions? What its?
    Please get the numbers and post them in answer lines without salt and halapino if possible, those numbers are self seasoned. Thank you.

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  11. I have forwarded the information and documents for the City of Dearborn Heights Water Budget Audit 2014 and the Water Budget 2015. I have asked the Truth Page Administrator to post. The documents should answer your questions and enable our residents to become more familiar with the water budget expenditures and liabilities.

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  12. The information is public to anyone that would include you too leadershipvacum however, I’m sure the councilwoman would have an easier time getting it. If the councilwoman wants to add some “salt and jalapeno” to her answer after spending the time getting the information I believe she’s entitled to do so. I understand councilwoman Hicks-Clayton is the one that gets the answers when needed, but I would like you to email your questions to councilman Ned Apigian and see what answer you get from him. Just for the heck of it lets see if he would even bother answering the question. What about councilman Bob Constan would he take the time? I think it’s time as residents that we start exposing some on the council. Councilman Ned Apigian is up for re-election do you want him back? What has he done for us?

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  13. Sorry, Livonia rate is 50% less the Dearborn Heights rate.

    Cost of Water They Charged Square
    City From Detroit Their Residents Profit Miles
    Based on 1 unit of water or 100 cubic feet of water (748gallons)

    Dearborn Heights $0.73 $3.46 $2.73 11.75
    Livonia $1.07 $1.69 $0.62 35.86
    Romulus $0.76 $2.64 $1.88 35.96
    Taylor $0.64 $2.46 $1.82 23.64
    Garden City $0.90 $2.90 $2.00 5.90
    Allen Park $0.70 $2.63 $1.93 7.05

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  14. Councilwoman, Please fill in short answers if you can:

    Q1- What was the Water fund balance at the beginig of FY 2015 on 7/1/15
    A1-

    Q2- What is the total outstanding loans due to the water fund at the beginig of FY 2015 on 7/1/15
    A2-

    Q3- What is the total expenses paid from the water fund in FY 2014 ended 6/30/2014?
    A3-

    Q4-What was the total revenue for the water fund for FY 2014 ended 6/30/2014?
    A4-

    Please, just respond with quantitative answers/numbers. Short and sweet, no salt and Halapino. The information I guess is public, and should be available to you with no problem, just a call to city administrators and you are able to fill the 4 answers in few minutes, Please the 4 questions and answers will help all residents understand this water fund financial delema and dramatic rate increase in the past 7 years, when the rate for Livonia residents is double our rate and Livonia pay about 40% more for the water. (see the post shart).

    I hope you can answer the above questions. Please don’t analyse them, just answer them. Thank you

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  15. It is not the intent to collect additional funds in the water fund for the specific use of covering or subsidizing another deficiency. ( Question 2-“supporting other city funds ability to carry-on non related water and sewage municipal activities”.) The 10-15% is not built in to purposefully be extend or be borrowed, covering any general fund liabilities and/ or expenses, by design . However, it can be used in cases of deficit. i.e. 2008-2010 economic down turn created a cash flow problem for the City due to a decrease in revenue from property taxes., i.e. see State of Michigan Department of Treasury guidelines. (Question 2- is it OK to charge them the cost of keeping millions of cash reserve to be available for other funds to borrow to support other funds activities?)

    Needed cash flow is projected and prepared by our City Treasurer. A report is provided to City Council members and is public information at City Council meetings, as well as by request to the City Treasurer’s Office. Inter-fund transfers are permitted , as outlined in the document I have provided (see previous post for the link). ( Question 1-I don’t know why calculating the needed cash flow for the water fund is that difficult? It should be spelled-out item by item and made public).

    In closing, water funds are restricted to work, equipment, labor, etc. that is related to this budget item. The Michigan Municipal League has referenced many legal opinions which support this subject., as well as Michigan constitution. https://www.mml.org/resources/publications/one_pagers/municipal_expenditures.pdf (Question #1-Is the city of Dearborn Heights included the needs to have sufficient cash reserve for the water fund to make sure cash is available to be borrowed by other city funds? )

    Please feel free to contact me at (313) 633-1845 with any additional questions. I greatly appreciate the opportunity to address your concerns and be an advocate for transparency in local government.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member

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  16. Let’s see – the city pays @ $1.22 a unit and makes @ $8.62 a Unit. (Overall with Water and Sewage combined)

    10 to 15 % mark up would be reasonable.

    But this is off of the charts! That is a 607% mark up!

    If this is a best practice what would be worse, from a residents perspective?

    There is one statement that needs to be remembered in all of this: The Water and Waste-water issue is a business. Let’s follow the money. That will tell us the real story.

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  17. Councilwoman Lisa Hicks-Clayton says: April 11, 2015 at 9:43 am, Councilwomen, please, please and please, answer the questions directly without traying to sell yourself, and repeating what you do. I’m sold! and so many others, we respect you and trust you for your oppeness and transperancy. I continue to engage with you in open-public-dialog about municipal activities because you are an honest public official. I beleive and so many others do, that you adding value to the disscussion every time post and I thank you for trying your best.
    Remember, you may have no answer to some questions, you can state I don’t konw! I will find out! I can’t get an answer! That is OK councilwomwen. Please don’t try to answer a specific question with general descreptive answer. No answer is the best responce when you don’t know.

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  18. Responding to: Councilwoman Lisa Hicks-Clayton says: April 11, 2015 at 9:43 am, Counciwoman: As I stated, the inne-borrowing is allawoble, but thank you for afferming that.
    Councilwoman, you failed to unswer the very specific questions that I asked you
    1) Is the city of dearborn heights included the needs to have suffecient cash researve for the water fund to make sure cash is available to be borrowed by other city funds? That mean the city needs for cash researve in the water fund is not only collected for directly related water and sewage activities, but also charging and collecting fees to support other funds cash flow deffeciency , in other word “supporting other city funds ability to carry-on non related water and sewage municipal activities”.
    2) Is the state regulations allow the municipalities to add “non direct related fund operational cost to be charged to the customer sreved by that fund activities? ” water and sewage customers charged for those services and related activities” is’t OK to charge them the cost of keeping millions of cash researve to be available for other funds to borrow to support other funds activities?
    You can check how much cash-flow the city water fund needs for water and sewage activities by reviewing the payments logs sequensing history, or just call the city tresurer for history of water fund payments for operational water and sewage activities not “LOANS”. That will give an idea how much cash researve you need to keep flooting in the water fund.
    I don’t know why calculating the needed cash flow for the water fund is that difficult? It should be spelled-out item by item and made puplic.

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  19. In the past, I had addressed this issue and provided resources and support details from the municipalities of Northville, Canton, Plymouth and Garden City. (nothing from Mars or the Sahara, since that is not a fair comparison for analysis). By working, serving on tasks forces, and networking with government officials from local, county, state and federal levels of government through the Southeast Michigan Council of Governments and the Michigan Municipal League, seeking and advocating for best practices in government has been a main focus (WALK the talk). In addition, yes, I work with and utilize resources from the Michigan Department of Treasury. I will include a valuable link, which provides wonderful insights to Government Accounting Standards Board (GASB) which includes :

    (Article 9, Section 13) Public bodies corporate
    shall have power to borrow money and to issue
    their securities evidencing debt, subject to this constitution and law.

    GASB Pronouncements, exposure drafts, discussion memorandums and technical bulletins may be ordered from the GASB website:
    https://www.gasb.org/store
    or from:
    Governmental Accounting Standards Board
    Order Department
    401 Merritt 7
    P.O. Box 5116
    Norwalk, CT 06856-5116
    Telephone: (203) 847-0700

    Inter-fund budget transfers are allowed under the Michigan law. Inter-funds borrowed are paid back with interest. Please visit:

    https://www.michigan.gov/documents/treasury/Audit_Manual_for_LUG_in_Michigan_383593_7.pdf

    This document will clarify the provisions for municipalities, with deficits and how funds may be utilized, reporting mechanisms, and audits. This includes local governments with deficits due to economic down turn, i.e. 2008-2010. Budget requirements, as well.

    (Article 9, Section 21) The legislature shall
    provide by law for the maintenance of uniform
    accounting systems by units of
    local government and the auditing of county accounts by
    competent state authority and other units of government as provided by law.

    I am available to meet with you and further discuss your concerns. I may be reached at (313) 633-1845.

    Respectfully,

    Lisa Hicks-Clayton
    Dearborn Heights City Council Member
    Dearborn Heights City Council Member

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  20. Ms. councilwoman, with all the respect and admiration to your sound judgements and voting records, are you just talking for the talk? were are those sourrounding communities, cities, towns and municipalities that you are refering to? were they are? In Nevada, Sahara Africa? Or on Mars? The city you represent charge the most if you look at Ms Tod report. Unless you have different figures you are not releasing. The city you represent charge over the cost of Detroit cost for water and sewage services way more then any sourrounding municiplalities with similar geography and inf. stru. age. What are those liabilities and extra cost above and beyond similar cost by other cities? List them please. What are the Unforseen emergencies you are talking about that are above and beyond other cities contengecies? Please read and review the state of Michigan regulations about what is allowable to be charged to the water and sewage bill, how mutch cash reserve in the water fund the city needs? In case you don’t know how to calculate that please follow this common 101 accounting formula evry student taking municipal acciunting will end mastering after finishing the cource:
    Total yearly cost of previews year “moving average” fund operation for the last 5 years /6
    6 is equal to 2 month/60 days cycle payments for operational cost. You adjust the cycle payment lower or heigher depending on the city payments mode. this methode separate the specific fund operation from the other non related fund liabilities IE. using the fund as cash flow pot to overcome cash shortage in other municipal fund. ( This practice is Ok. if the fund is not calculating the borrowing liability as part of the total fund related operational cost and charge that as direct and related charges to the specific services that the fund is inteded for ” Water and Sewage ” fund was intended to be used as a cash pot therefore the cost of that use should not be included in the calculation of the cash reserve the fund needs to maintain. Therefore It will be Very OK to use the reserve to assist other cities funds with cash if that will effect the fund ability to support its operation. I hope you understand better how the calculation for cash reserve is done. But and million but, you have to rememeber that the cash reserve can be way, way , way heigher if you include the inner-fund borrowing in the formula above. I don’t know if calculating the inner-fund borrowing factor for fund cash reserve is OK by the state, and don’t know if the state allow municipaltities to add the cost of that factor to the water and sewage rates. Please check with the state of michigan treasury dept. to clerify that. It will a good public service to Dearborn Heights residents to report back on this issue in any way you think its approperiate, news paper, this blog, during council metting, on your facebook, in your E news or during your city community meetings.
    Lets be transperant about this issue, and if its OK to charge what the city chrging for water and sewage service to keep the city functioning than state that fact and move on and keep the city running in the black ink, as a place to live save and healty.

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  21. The full response, as provided in the original e-mail, was defining the water rate as smoothed over 5 years based on costs, outstanding liabilities, infrastructure liabilities, bonds, interest, repairs, cleaning, maintenance of equipment, and labor related to sewers & water department. The smoothing of the rate increase prevents “sticker shock” to our residents, as many municipalities have passed on double digit increases. The 10-15% is above these costs items, set aside for unforeseen emergencies. Similar to a business, you must plan for controllable and uncontrollable liabilities, as well as unforeseen emergencies.

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