CHICAGO — The Detroit water and sewer system is eyeing major rate increases to offset flat revenues as it prepares to transition into a new regional authority crafted during the city's bankruptcy.
Detroit residents could see nearly 17% increase in sewer rates and suburban customers face an average 11.3% increase in water rates under proposed increases the Detroit Water and Sewerage Department released Feb. 12.
The board of water commissioners still needs to approve the rates.
The rate increases are aimed to offset lower-than-expected revenues due to flat or declining water sales and delinquent payers, including some financially troubled suburbs, according to reports.
The double-digit increases come a week after U.S. Bankruptcy Judge Steven Rhodes, who oversaw Detroit's Chapter 9, filed a court document noting that additional mediation sessions have been set for the city and suburbs to hammer out remaining disputes in the creation of the Great Lakes Water Authority.
The nature of the disputes remains unclear, but in recent weeks, Oakland Executive L. Brooks Patterson and Macomb County Executive Mark Hackel have complained about the rate increases, lower-than-expected revenues and the department's lack of financial clarity.
The deal calls for Macomb, Oakland and Wayne counties to lease for at least 40 years the bulk of the water and sewer department, with Detroit retaining control of the city's infrastructure. In return, the counties would pay Detroit $50 million a year in lease payments, money that the city can only use for system upgrades.
