August 20, 2014 - Effective Oct. 1, water and sewer customers in Oxford Village will experience a large increase in their monthly bills as the municipality seeks to stop losing money and start covering its costs for those utilities.
That glass of water is going
to cost Oxford Village
residents more money beginning
Oct. 1. (click for larger version)
Last week, council voted 4-1 to adopt ordinance amendments that charge water and sewer users a flat, monthly base rate that's determined by meter size, plus an increased rate for the amount of water and sewer that's actually consumed and produced.
This decision came after months of committee-level and council-level discussion that began last November.
"I think we've beat this one to death," said Councilman Elgin Nichols.
Village attorney Bob Davis explained the municipality is doing this in order to cover the water and sewer systems' operating expenses and meet their debt obligations.
"For years, the village has been operating at a deficit with respect to the water and sewer (funds), and we've been covering those expenses with other funds," he said. "The village needs to cover its costs."
"(The village) probably should have done this a while ago," Davis noted. "And we probably should have done this incrementally over the years, but that didn't happen."
Under the proposed rates, an average household that uses 4,000 gallons of water per month and has a ¾-inch meter would go from paying $47.77 to $68.29 on its monthly water/sewer bill. That's an increase of $20.52 (or 43 percent).
An average household that uses 4,000 gallons of water each month and has a 1-inch meter would go from paying $47.77 to $72.11 on its monthly water/sewer bill. That's an increase of $24.34 (or 51 percent).
Davis acknowledged "it's a significant increase," but he also assured the audience "it's not designed (to), nor will it, provide any profit or excess funds (for) the village."
"It's just meeting the cost of the service," he said. "By law, the village should be charging to recoup its cost for the services rendered."
Had council not raised rates, the village's water and sewer funds were projected by Manager Joe Young to lose $195,190 and $208,863, respectively, for the current 2014-15 fiscal year, which began July 1.
The water and sewer funds had previously lost $436,807 and $204,696, respectively, between 2010 and 2013, according to figures supplied by Young.
"We can't continue to lose this money," Nichols said. "It's hemorrhaging. We have to do something to correct it. We're not asking for any more money other than what it costs to maintain the infrastructure and what the cost is for usage. It comes right down to that."
The last time the village increased sewer rates was in 2001 whereas the last time it increased water rates was in September 2008 when the base and flow rates both went up 5 percent.
The current structure
Right now, all village water customers pay a base rate of $18.10 per meter (regardless of size) per month, which includes up to 2,000 gallons of water whether they use it or not.
Likewise, all village sewer customers currently pay $22.85 per Residential Equivalent Unit (REU) per month, which includes up to 8,333 gallons of sewage per REU whether they produce it or not.
An REU is a unit of measurement equal to the average water usage of a single family home. A home is assigned a value of 1 REU whereas a business, such as a restaurant or car wash, can be assigned multiple REUs and pay for them.
Once customers reach the minimum 2,000 gallons of water and 8,333 gallons of sewage, they pay $3.41 for every 1,000 gallons of water used after that and $0.51 for every 1,000 gallons of sewage they produce.
Base rates based on meter size
Under the new structure, the monthly water base rate will be based on meter size. Water customers with ¾-inch meters will see their base rate decrease to $16.45 per month, while those with 1-inch meters will see their rate remain at $18.10.
All other users will pay increased base rates determined by the size of the meter.
Under the new rate structure, a 1.5-inch meter pays $53.47; a 2-inch meter pays $92.96; a 3-inch meter pays $201.54; a 4-inch meter pays $359.48; and a 6-inch meter pays $452.44.
The sewer base rate will also be paid based on meter size.
Sewer customers with a ¾-inch meter will pay $29 per month while those with a 1-inch meter will pay $31.17.
As for the larger meters, a 1.5-inch meter pays $94.24; a 2-inch meter pays $163.83; a 3-inch meter pays $355.20; a 4-inch meter pays $633.56; and a 6-inch meter pays $988.76.
The new rate structure calls for water and sewer customers to pay for every gallon they use and produce – no more including 2,000 gallons of water and 8,333 gallons of sewage in the base rates.
All customers will pay $3.96 (a 16 percent increase) for every 1,000 gallons of water they use and $1.75 (a 243 percent increase) for every 1,000 gallons of sewage they produce.
Make room for the IWC fee
Right now, the Industrial Waste Control (IWC) fees charged by the Detroit Water and Sewerage Department are absorbed by the village sewer fund to the tune of approximately $38,000 annually.
Village officials will pass this cost along to non-residential sewer users on a monthly basis according to their meter size.
Thus, for commercial and industrial sewer users, the IWC charges will be as follows – a ¾-inch meter would be charged $13.56 per month; a 1-inch meter pays $22.60; a 1.5-inch meter pays $49.72; a 2-inch meter pays $72.32; a 3-inch meter pays $131.08; a 4-inch meter pays $180.80; and a 6-inch pays $271.20.
These IWC fees will be charged in addition to the village's new meter-based sewer rates.
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.