Official Water and Sewage Dept. Control Thread

[Fury13]

Let's see, if there is corruption in Warren or any other city, that gives other communities the right to lay claim to its assets? Since everything involves taxes, revenue sharing, etc. arguably everybody in the state is aggrieved when there is municipal malfeasance anywhere.

Fouts is following an absurd line of thinking that says, "If I am a customer, I deserve ownership of companies from which I make purchases and can demand a seat on on their board of directors." Fortunately there are laws and court procedures that will give this foolishness a simple answer. If you want the Water and Sewage Department, buy it. Not for sale? Take a hike.

Any veteran of 8 Mile politics knows what is really going on. Fouts is grandstanding and code-speaking on this issue much in the mode of LBP. It is a handy deflection of issues facing his rapidly declining and increasingly troubled community.

1910 2,445 −4.8%
1920 3,564 45.8%
1930 14,269 300.4%
1940 22,126 55.1%
1950 42,653 92.8%
1960 89,426 109.7%
1970 179,260 100.5%
1980 161,134 −10.1%
1990 144,864 −10.1%
2000 138,247 −4.6%

Interesting that Warren is now at the same population it was at in 1965.

[Fury13]

If communities did indeed develop their own water systems? Wouldn't Detroit lose considerable income? There are many more suburban customers then Detroit customers.

I sympathize with those that don't trust the water dept.Is is it not understandable that they would feel that way based on the level of corruption exposed. so far. And what about regional cooperation; by the tenor of this thread the level of mistrust might be intractable.

The whole reason that most communities DIDN'T build their own systems was to take advantage of the economy of scale that DWSD offered. A larger system offers lower per-unit costs.

[Novine]

"If communities did indeed develop their own water systems? Wouldn't Detroit lose considerable income? There are many more suburban customers then Detroit customers."

Detroit doesn't get income from the water and sewer system in the way that many people think. The system is a utility which means that any "profits" have to go back into the system. That's not money that gets sent off to the city to be used for other purposes. There's some accounting tricks that I'm sure that are done to bill DWSD for certain services but it's not a cash cow that puts money into the city's general fund.

A standalone suburban system would be incredibly expensive to build. While it could probably be operated more efficiently, it would take decades to pay off the capital investment to get it started and that would mean decades of higher water bills. Additionally, since Detroit would not be part of a system, it would have a smaller customer base which means those capital costs would be higher per customer.

[citylover]

Thanks for pointing these facts out....however Detroit would still lose income would they not if money for water service went someplace other then Detroit?

[bartock]

"If communities did indeed develop their own water systems? Wouldn't Detroit lose considerable income? There are many more suburban customers then Detroit customers."

Detroit doesn't get income from the water and sewer system in the way that many people think. The system is a utility which means that any "profits" have to go back into the system. That's not money that gets sent off to the city to be used for other purposes. There's some accounting tricks that I'm sure that are done to bill DWSD for certain services but it's not a cash cow that puts money into the city's general fund.

A standalone suburban system would be incredibly expensive to build. While it could probably be operated more efficiently, it would take decades to pay off the capital investment to get it started and that would mean decades of higher water bills. Additionally, since Detroit would not be part of a system, it would have a smaller customer base which means those capital costs would be higher per customer.

Yes, but it has proven to be a cash cow for corrupt politicians in Detroit and multiple contractors, suburban and Detroit based, many of which have operated under the guise of "minority" or "Detroit" contractors [[which, from what I understand, invites straw men "minority" owners fronting for others who lack any ethics, etc., creating exactly what the idea of "minority" and "Detroit" contractors was meant to deter in the first place).

I think, under the current political climate, that if Oakland, Macomb, and other SE Mich counties really pushed for their own system [[or building on to the few already existing systems), SE Detroit residents not in Detroit would accept the costs of building it for perceived long term benefits. That is why, I believe, eventually there will be suburban presence on any water board based out of the Detroit system. I'm not saying it will be better, I just believe that is what will be.

[Mikeg]

Let's put it this way - the current situation within the DSWD is nearly analogous with the situation the late General Motors Corporation was in prior to its demise in 2009. It has enormous excess water treatment capacity, declining demand for its products, plus a suspect management team that is stuck in the past and thinks that they can simply continue to cover their structural and operating costs year after year with price increases. Unlike the late General Motors Corporation, they face no direct external competition, however their customers can and are changing their consumption behaviors as a result of the annual price increases and the annual pleas for voluntary water conservation during the summer. Add on top of all that the reduced industrial water & sewer usage due to the automotive downturn and the prolonged recession and the DWSD is in a world of hurt.

GM kept kicking the can down the road and eventually they ran out of road. The DWSD is following the same path and eventually it will be forced to restructure when it finally runs out of fiscal and/or political options.

[Kevgoblue]

<sigh> here we go, with this tired argument once again.
I had seen some charts that posted numbers for all the local municipalities, but you'll forgive me if I'm too lazy to search long enough to find it. But this sums it up nicely. The numbers are a few years old, but the fundamental point is still relevant.

"Taking all this into account, it’s ironic that one of the primary issues driving the regionalization effort is the cry that suburbanites are being gouged by the City of Detroit. What many customers don’t realize is that much of their bill has nothing to do with rates charged by the Detroit. Take, for example, the city of Warren, which has been a lead advocate of a takeover.
Effective January 2002, Detroit charged Warren $5.86 per thousand cubic feet of water, equal to about 7,500 gallons. Warren in turn charged its residents $13.14 for that water, a 125 percent increase; that’s according to the 2002-2003 Water Department report on budgets and rates prepared for the city by Black and Veatch, an international engineering consulting firm that specializes in water-rate analysis.
Most cities that buy Detroit water double, triple and even quadruple the water charges to their residents. The average markup is 146 percent on water rates and 168 percent on sewer rates. That means most of the money collected in the region for water bills stays in the local communities that bill the residents. It does not go to Detroit." http://www2.metrotimes.com/editorial/story.asp?id=4268

For all the LBP's and Fouts' out there, their arugment would hold much more water [[pardon the pun) if they supported more mass regionalism. Not just in the areas which can be viewed as a financial asset, but those which are liabilities as well. Let them share the cost of maintaining facilites for the region's homeless and mentally ill. Let them share in the cost of demolishing homes which their residents abandoned, for others to deal with. Let them share the costs of cleaning up brownfields, left by the industrial giants of the past which have since moved on to greener pastures. Let them share the costs of paying generations of retirees which collect pensions but have since moved to suburban communities.

Also, when are they going to petition to take over the gas & electric service? How about comcast? Their bills are mulitple times that of the water bill. And they increase seemingly every year as well. I have much less consternation when writing my $40 check for my water bill, as compared to the $160 check to Comcast.

[jt1]

<sigh> here we go, with this tired argument once again.
I had seen some charts that posted numbers for all the local municipalities, but you'll forgive me if I'm too lazy to search long enough to find it. But this sums it up nicely. The numbers are a few years old, but the fundamental point is still relevant.

"Taking all this into account, it’s ironic that one of the primary issues driving the regionalization effort is the cry that suburbanites are being gouged by the City of Detroit. What many customers don’t realize is that much of their bill has nothing to do with rates charged by the Detroit. Take, for example, the city of Warren, which has been a lead advocate of a takeover.
Effective January 2002, Detroit charged Warren $5.86 per thousand cubic feet of water, equal to about 7,500 gallons. Warren in turn charged its residents $13.14 for that water, a 125 percent increase; that’s according to the 2002-2003 Water Department report on budgets and rates prepared for the city by Black and Veatch, an international engineering consulting firm that specializes in water-rate analysis.
Most cities that buy Detroit water double, triple and even quadruple the water charges to their residents. The average markup is 146 percent on water rates and 168 percent on sewer rates. That means most of the money collected in the region for water bills stays in the local communities that bill the residents. It does not go to Detroit." http://www2.metrotimes.com/editorial/story.asp?id=4268

For all the LBP's and Fouts' out there, their arugment would hold much more water [[pardon the pun) if they supported more mass regionalism. Not just in the areas which can be viewed as a financial asset, but those which are liabilities as well. Let them share the cost of maintaining facilites for the region's homeless and mentally ill. Let them share in the cost of demolishing homes which their residents abandoned, for others to deal with. Let them share the costs of cleaning up brownfields, left by the industrial giants of the past which have since moved on to greener pastures. Let them share the costs of paying generations of retirees which collect pensions but have since moved to suburban communities.

Also, when are they going to petition to take over the gas & electric service? How about comcast? Their bills are mulitple times that of the water bill. And they increase seemingly every year as well. I have much less consternation when writing my $40 check for my water bill, as compared to the $160 check to Comcast.

Funny that this appeared to be the thread killer. I guess asking people to check to see the local charges sends them away.

[EastsideQT]

It would be a lot easier to ask what Kwame Kilpatrick should not be blamed for. I can barely pay my own rent, utilities, and food, now I have to pay for his room, board, and utilities while he sits in prison.

[stromberg2]

Nice job, Kevgoblue, end of argument.

Stromberg2

[Mikeg]

<sigh> here we go, with this tired argument once again.................
Most cities that buy Detroit water double, triple and even quadruple the water charges to their residents. The average markup is 146 percent on water rates and 168 percent on sewer rates. That means most of the money collected in the region for water bills stays in the local communities that bill the residents. It does not go to Detroit." ................

Also, when are they going to petition to take over the gas & electric service? How about comcast?

The so-called "markup" just isn't a windfall for the suburbs that "stays in the local communities" to enrich their general fund. The suburban municipalities own and operate their own water and sewer systems and the costs to operate and maintain them [[the "markup") have to be recovered along with the costs to buy Detroit water and have Detroit treat their sewage. The suburbs can control their own individual system costs but they have no control over the price they have to pay Detroit for the drinking water and the price they have to pay them to take it back and treat it.

In recent years the DWSD has become more transparent about the formulas used to allocate their costs into the pricing of water and sewage treatment for each of their customers, but they are still opaque when it comes to explaining the actual operational costs they are allocating. It might be easier to swallow the rate increases if everyone knew exactly how the DWSD was spending their money to operate their water treatment plants and especially the wastewater treatment plant.

People are furious over the recent indictments but they ought to be just as furious over the DWSD's mismanagement of the wastewater treatment plant and the Sewage Disposal Fund.

The Detroit wastewater treatment plant has been out of regulatory compliance with the Federal Clean Water Act for 12 of the last 12 quarters [[and 12 of the 12 before that, etc.) [source1, source2]. The only reason they are not in trouble with meeting the Federal Clean Air Act regulations is that instead of incinerating a good proportion of their sludge, they take the more expensive route of sending almost all of it to landfills. Why should they care about controlling their discharges onto the Detroit River when all they get is a slap on the wrist by a Federal Judge and are able to avoid fines? Why should they care about minimizing operating costs when they can just total them up and pass them on in rate hikes to their Detroit and suburban customers? Perhaps Judge Cox will show more interest in the DWSD's mismanagement that Judge Feikens did.

The DWSD's most recent Annual Report on their web site is from 2006 so one can only examine their more recent 2009 financial statements. Slogging through their 2009 Sewage Disposal Fund financial statement reveals a few infuriating tidbits.

1. Despite Novine's assertion that the DWSD is "not a cash cow that puts money into the city's general fund", page 15 of the Sewage Disposal Fund financial statement reminds us of the $17.7 million the DWSD Sewage Disposal Fund paid the City of Detroit General Fund for a 3.27 parcel along Atwater St. that will be used "for the future construction of a combined sewer overflow facility".
2. To supposedly better manage its interest rate exposure, the Sewage Disposal Fund had entered into several interest rate swaps. When the City of Detroit's credit rating was lowered in 2009, it had the potential to terminate the swaps and trigger massive, unbudgeted payments by the Sewage Disposal Fund. According to page 25 of the Sewage Disposal Fund financial statement, Swap Agreements were reached with all parties to avoid termination in exchange for putting all of the City of Detroit Wagering [[Casino) Tax revenues into a trust fund as collateral.

I suppose the suburban customers of the DWSD ought to be thanking the residents of Detroit for putting their casino tax revenues in trust so that we can all continue flushing our toilets without worrying, but according to what I read here, nobody in Detroit seems to be worrying about the DWSD except over what the suburban politicians are saying about it.

BTW, gas and electric services are regulated by the State of Michigan Public Service Commission, the DWSD is not. Comcast is a private company, the DWSD is not.

[Novine]

"Despite Novine's assertion that the DWSD is "not a cash cow that puts money into the city's general fund", page 15 of the Sewage Disposal Fund financial statement reminds us of the $17.7 million the DWSD Sewage Disposal Fund paid the City of Detroit General Fund for a 3.27 parcel along Atwater St. that will be used "for the future construction of a combined sewer overflow facility"."

I stand by the comment. As I noted, undoubtedly, the city has found ways to bill back costs to DWSD. In this case, it looks like DWSD was the source for a one-time infusion of cash through the sale of real estate. But one-time cases don't make it into a cash cow. It's not a dependable source of income for the general fund and in the big picture, not a very large source of income either.

[Mikeg]

But one-time cases don't make it into a cash cow. It's not a dependable source of income for the general fund and in the big picture, not a very large source of income either.

Perhaps not a dependable source of income, but history has shown the DWSD Water/Sewer Funds to be dependable sources of big-ticket "stuff" that should have been purchased out of the General Fund.

In this case, the controversy associated with this "not very large source of income" was sufficient to cause the KPMG auditors to specifically call it out in their notes on the financial statement.

[luckycar]

Mikeg,good link to the NYT article.However it does not get into specific violations of non-compliance.Many times a non-permit discharge violation,is just not meeting a 5 or 30 day moving average.A .8 mg/L,thats parts per million,phosphorous discharge that is exceeding a .4 mg/L permitable is not life and death to a receiving stream.A multi-million gallon sewage overflow is.
As for the suburbs building,maintaining and funding a sewage/water system,not going to happen.Warren,Pontiac,Trenton,WyandotteYpsilanti,A nn Arbor Highland Park and some of the TWPS.have a water and or wastewater plant.This has been in place for almost 100 years in some cases.To tear up the DWSD grid and build new smaller ones makes no sense.Unless we get all that Dubai cash infusion that KK promised.
A manager from an outstate utitlity once told me,"It's cheaper to pay the fine than to spend millions on the fix!.Just my 27 years in the wastewater field putting in my 2 cents.....

[MikeM]

Meanwhile...

http://www.freep.com/article/2010122...wn-water-plant

Grosse Pointe Park planning to build its own water plant

Pointe Park Mayor Palmer Heenan said his city is satisfied with the quality of water and the service that it receives from the Detroit water department, but the cost increases are reaching the point where it would be cheaper for the city to build its own plant.

[SWMAP]

Good for grosse pointe! But I imagine that the sticker shock they have experienced stems from the fact that they, for the first time, have had to actually treat their waste water [[paying Detroit to do so) as opposed to just dumping their human waste into the Fox Creek and the River, as they had been doing until very recently. Prices were pretty low then!

[MikeM]

Don't be silly.

[Mikeg]

Good for grosse pointe! But I imagine that the sticker shock they have experienced stems from the fact that they, for the first time, have had to actually treat their waste water [[paying Detroit to do so) as opposed to just dumping their human waste into the Fox Creek and the River, as they had been doing until very recently. Prices were pretty low then!

If that allegation is true about GP, how is it much different from what the DWSD wastewater treatment plant was doing not more than one year ago? From Sept 30, 2009 through January 31, 2010, the monitored levels of "Suspended Percent Removal of Solids" in their discharged effluent were well below the required 85% limit [data]. Or to put it into more understandable terms, during that period instead of dumping their normal daily average of between 35,000 and 65,000 lbs of "solids" into the Detroit River, they were dumping between 100,000 and 349,800 lbs per day [data].

[Fury13]

If the suburbs have reservations about DWSD is run, they can always pool their resources and buy it. Or, build their own systems. End of story.

[MikeM]

Yes, thank you MikeG. SWMAP is confusing CSO overflows [[usually due to heavy rainfall, rapid snowmelt, or occasionally a system malfunction) with dumping of raw sewage into the creek, which the community hasn't done since before the war. Detroit also has the ability to dump combined overflows into Fox Creek. Matter of fact, I see that the last two sewage overflows into Fox Creek were done by Detroit in 2001.

[Mikeg]

If the suburbs have reservations about DWSD is run, they can always pool their resources and buy it. Or, build their own systems. End of story.

If they even wanted to buy it, how much do you think they would be willing to pay for that mismanaged "white elephant" and do think Detroit would be willing to continue putting their casino tax revenues into that trust fund to guarantee the Swap Agreement payments? I think the answers are "not much" and "hell no".

[Mikeg]

Funny that this appeared to be the thread killer. I guess asking people to check to see the local charges sends them away.

Nope, it looks like this has been the thread killer. Asking people to defend the indefensible sends them away.

Maybe someday the City of Detroit will be able to operate their sewage system without having to pledge their casino tax revenues as collateral or without dumping 4 million pounds of "solids" into the Detroit River for months on end when their wastewater treatment plant is capable of operating at one-quarter of that emissions level. In the meantime, those who suggest that the DWSD is in dire need of reform or restructuring would seem to have a pretty good leg to stand on.

[Fury13]

If they even wanted to buy it, how much do you think they would be willing to pay for that mismanaged "white elephant" and do think Detroit would be willing to continue putting their casino tax revenues into that trust fund to guarantee the Swap Agreement payments? I think the answers are "not much" and "hell no".

So, you think it should just be given to the suburbs, gratis? You seem pretty mad about all of this. What do you want done with it?

[jt1]

Nope, it looks like this has been the thread killer. Asking people to defend the indefensible sends them away.

Maybe someday the City of Detroit will be able to operate their sewage system without having to pledge their casino tax revenues as collateral or without dumping 4 million pounds of "solids" into the Detroit River for months on end when their wastewater treatment plant is capable of operating at one-quarter of that emissions level. In the meantime, those who suggest that the DWSD is in dire need of reform or restructuring would seem to have a pretty good leg to stand on.

I am not defending the mismanagement. It needs to be addressed immediately.
I do however have issues [[1) that when people complain about rate increases they never check to see the increases from their own community [[2) people believe that a Detroit owned asset may be taken over because customers aren't happy about the service or management.

If the suburbs want more say on the board then they need to supply Detroit with an infusion of money since it is a Detroit owned asset. If, as customers they are unhappy with the cost for services provided then they can build their own system.

This just falls into the 'regionalization' when it is convenient argument. Is anybody advocating for regionalization of insurance rates, regionalization of the cost of care of homeless and impoverished, regionalization of halfway houses? Nope, these can remain problems that impact Detroit much more than other communities so nobody cares.

I would be fine with suburban oversight but that should come at a massive cost as Detroit owns the system. I would even advocate allowing DWSD run for a profit for the city. It would be up to leadership at DWSD to see what costs the market woudl support before other communities begin building their own systems.

[DetroitPole]

This is out of character for me, but as a city resident based on my own personal experience, I don't believe the DWSD should be run the way it is currently run. Regionalization? Anything to make it less fucking horrible.

I have never had a good experience with them. Most recently, they haven't been billing me because "they have no record of a water meter being installed" at my residence. Oh yeah, no shit? Because I watched you fuckers put it in. So now me or my other have to take of work for four hours so some lazy asshole can make sure there is a meter in my house.

When I bought my house, they simply could not schedule a service date for MONTHS until somebody I know with the right connections stepped in. Then all of a sudden it got done within the week. Talk about corruption. How does that work?

At my old house they cut off my water on the hottest day of the year with no notice because of some nonsense about their new meters. Again, I had no notice, and they claimed they had no way of turning it back on. So I had to have a certain friend do some "work" for me.

So sign me up. How do I see that Jim Fouts or ANYBODY else is running it? Cut off my nose to spite my face? Sure, whatever, I don't care at this point. It is poorly run and undoubtedly the corruption runs deep. This isn't the Soviet Union. Enough with this entitlement.

Until that blessed day comes, where can I complain to? Do I have any recourse besides this board? I can't do without water, and they're a monopoly; the only game in town. Where do I get satisfaction?