City Could See Fresh Water, Sewer Rate Hikes 12-06-2010 - WNEM TV 5

City Could See Fresh Water, Sewer Rate Hikes 12-06-2010

City Of Flint Finance Director Michael Townsend has recommended a water and sewer rate increase for Flint residents, effective Jan. 15, 2011.
Now residents will see their water bills increased by 25 percent and sewer rates increased by 22 percent.
Flint city ordinance requires the finance director to calculate and transmit to the mayor and City Council the new water and sewer rates.
Townsend said the water and sewer rate increases are necessary to keep the city in compliance with a bond agreement with the state.
And thanks to those ordinances, Townsend has the authority to impose the rates.
“The Water Fund must maintain a substantial operating income because of the bonds the city sold through the state,” said Townsend. “The state requires the Water Fund to maintain operating revenues greater than 125 percent of the amount of debt service on the bonds. For Fiscal Year 2010, the City did not meet the 125 percent requirement.”
Townsend said both the water and sewer funds suffered significant revenue declines in fiscal year 2010. The water fund recorded an operating loss of $8.5 million and the sewer fund an operating loss of $17 million.
The city last raised water rates in June 2009. At the same time, they restored sewer rates to their 2003 levels after several years of a rate decrease.
Flint currently receives its water supply from the City Of Detroit. For the past several years, city officials said Detroit has imposed annual double digit rate increases for the service. Townsend said those increases have not always been passed on to residents of Flint.
“The water rate structure should provide adequate revenues to help cover some of the Detroit rate increases, while providing revenue to pay the Drinking Water Revolving Fund bonds,” said Townsend.
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