Growing Unpaid Highland Park Water & Sewer Bills
Highland Park owes over $32.5 million in unpaid water and sewer bills that is now being unfairly charged to suburban customers. The unpaid amount is growing at over $400,000 per month. Macomb County initiated a letter campaign to the Governor to assist in resolving this matter. In 2012, the State requested that Detroit provide short-term emergency water to Highland Park. The State continues to have oversight over Highland Park’s finances.
Macomb Fighting Water Rate Increases
Summer water bills are coming out now. High volumes, unpaid bills and even greater sewer rate increases are resulting in much higher year-over-year water bills. Brian Baker, Macomb representative on the Great Lakes Water Authority (GLWA), highlights the drivers of these costs and warns Macomb residents to keep a close watch on the water and sewer rate-making process.
“Our water system is a regional infrastructure system. The full activity of that system is factored into the costs so it’s important that we carefully examine what drives costs – and identify every possible source of savings,” said Brian Baker.
2016 bills are fighting a battle to control costs. A sizable component of the increases are a result of a $31 million debt and ongoing $400,000 monthly deficit from the city of Highland Park under the former DWSD system. Macomb continues to push the state for resolution to this issue, as the debt and agreement were an arrangement during State of Michigan emergency management of Highland Park. Mr. Baker also requested support from MACRO (The Macomb Area Communities for Regional Opportunities) to also send communication to the governor’s office for resolution to this immense cost burden to suburban customers of GLWA.
A second component to those increases is attributed to the rate structure implemented by GLWA. Macomb County was the only negative vote for this year’s rate structure.
Brian Baker stated, “My position is that savings to our customers should be realized whenever possible. This year we had an opportunity to realize some of the initial savings from increased efficiency moving from DWSD to GLWA and to offset the new $50 million lease payment to Detroit.” Without further savings we are looking at a potential 9% to 10% rate increase next year due to the loss of Genesee County as a water customer.”
The third driver of cost increases were local drain and sewer increases. The wholesale sewer rate increase from GLWA to Macomb County was only 0.7%. The retail rate increase from the Macomb Public Works office however was a six-fold multiplier to that increase.
“60 – 70% of a resident’s water bill is comprised of sewer charges. While the GLWA implemented a 0.7% increase, the Public Works mark-up was 4.3%. Over the past seven years, sewer rates from Macomb Public Works have risen more than 120%, accounting for the majority of rate increases to customers.”
Mr. Baker warned of needing to keep a watchful eye on the water system, rates and the condition of its infrastructure, “The condition of DWSD was not structurally or financially sound when the GLWA assumed control. Debt payments consume half of all water department revenues, which leaves very little for much-needed capital improvements in the system.” He stated further, “I cautioned that there would be significant increases this summer. The mistakes made in Flint are not only damaging to residents, but consuming a lot of State resources that are really needed across the entire water and sewer system.”
County Executive Mark Hackel, who appoints Mr. Baker to the GLWA, said that, “Brian is doing a tremendous job of watching out for Macomb County residents. He and I are still concerned about the $31 million of unpaid sewer bills from Highland Park, that especially in light of the tragedy in Flint, are being borne by the regional members of the GLWA, whereas this should be the responsibility of the State of Michigan.” Meanwhile, unpaid bills from Highland Park are increasing by $400,000 per month.
Brian Baker is the CFO of Sterling Heights and Macomb County appointment to the Great Lakes Water Authority. His term will be up for renewal in 2020.
Growing Unpaid Highland Park Water & Sewer Bills
Highland Park owes over $31 million in unpaid water and sewer bills that is now being unfairly charged to suburban customers. The unpaid amount is growing at over $400,000 per month. Macomb County initiated a letter campaign to the Governor to assist in resolving this matter. In 2012, the State requested that Detroit provide short-term emergency water to Highland Park. The State continues to have oversight over Highland Park’s finances.
MACRO Resolution Against Paying Highland Park Debt
Macomb Area Communities for Regional Opportunities (MACRO) unanimously approved a resolution on August 11, 2016 opposing the unfair burden on suburban sewer customers to pay for unpaid Highland Park sewer bills. As the State continues to have oversight of Highland Park, MACRO requests the Governor’s personal intervention to bring a fair and equitable solution to this matter.
For those Macomb communities who have yet to sign up for water bill payment assistance for their low-income residents, please see the link below that provides more detail.
Brian Baker’s comments on Flint Water Rate
The GLWA board on June 27, 2016 approved a water contract extension with Flint for an additional year with no rate increase. The State is paying for the contract. Macomb was the lone no vote as I believed that the State should have to pay the same rate increase as everyone else to cover increasing costs. The State should be treated no differently than the other 126 water communities who have signed long-term contracts and took large rate hikes. In addition, the State bears some responsibility for Flint leaving the DWSD/GLWA in the first place which resulted in a 3-4% permanent water rate increase starting last year to all communities to cover the loss of Flint revenues. I didn’t believe it was right to offer a special deal to the State. I would have been willing to consider a lower increase if Flint had decided to remain with the GLWA permanently – but Flint/State announced just last week that they will continue with the KWA. In addition, the Flint/State revenue for the current year and next year should have been used to lower everyone’s rate increase this year – instead it was not budgeted and is not reflected in the rates.
Brian Baker’s comment on Macomb Public Works Office sewer rate increase to Macomb residents
The July 1st Sewer rate from the Macomb Public Works office to the 11 Macomb communities should have increased only 0.7% (due to the expiration of a lookback charge the 11 communities had been temporarily paying). Now that the temporary charge was fully paid off, we anticipated that the sewer rate increase would be very low this year. Instead the Macomb Public Works office chose to increase sewer rates by 4.3% and not pass on the savings to ratepayers. Rates from the Public Works office have now increased by 120% in the past 7 years. As the GLWA’s Macomb representative, I had expected these savings to be passed on to ratepayers in much the same way I fought to pass on saving and lower GLWA rates increases. While some may complain about GLWA rate increases, we had an opportunity to see much lower Macomb sewer rate increases this year, but unfortunately the Public Works office chose not to.