Friday, March 20, 2009

DWSD Director Responds to Report about Water Main Leaks

DWSD Interim Director Pam Turner responded today (here) in a Letter to the Editor in the Detroit Press to earlier reports about Detroit's trouble water mains --

In response to the March 2 article "Water mains are a ticking time bomb": For starters, the $23-million cost for unaccounted water is erroneous. The cost to ratepayers for the issue referenced by the article is perhaps 10% of that figure, or less than 1% of the total revenue of the DWSD water system.

Further, the article stated that most of the region's water problems are tied to Detroit's aging water system. Of the 12,500 miles of water infrastructure in southeast Michigan, only 3,500 miles of pipe -- most of which is in the city of Detroit -- are owned and maintained by DWSD. The remainder is local infrastructure owned and maintained by individual communities.

Detroit residents and businesses alone are responsible for the cost of maintaining their local distribution system. This cost of $25 million-$30 million a year for water line replacement comes solely from Detroit retail water rates and is not a cost charged to any suburban wholesale customer community. Wholesale rates are a separate structure and cannot be used to finance work being done solely for retail customers in Detroit.

The primary reasons for annual water and sewer rate increases are the cost of capital improvement projects, many of which are federally mandated. These mandates -- on the wastewater side -- have no associated federal grant or loan dollars, and the costs are borne by the communities served. Additionally, the recent financial crisis in the bond market has significantly raised the cost of debt service for the bonds financing our capital improvements. The impact of these factors on our rates is outlined in Web-posted presentations and related material shared with the wholesale customer communities and available on the 2009-10 rate season schedule found at

"Unaccounted-for water" is a term with differing meanings in its application to rate-making. The water industry has been moving to more precise terminology in recent years and has used "non-revenue water" to refer to such situations as hydrant use, inaccurate metering and inaccurate pumping figures. "Lost water" has been used to describe water lost as the result of water main breaks and transmission loss in the water system. Based on an ongoing study of the DWSD system, the figure for lost water is more accurately reflected at 9% of total system production, as recently reported to the Board of Water Commissioners at its February business meeting.

DWSD remains committed to providing its 4.3 million customers with safe, reliable drinking water and responsible wastewater collection and treatment at affordable costs that place it as the third lowest of the nation's 20 largest municipal systems for water rates and eighth lowest for combined water and sewer rates.

Pamela Turner
Interim Director,
Detroit Water
and Sewerage Department

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