Title
The Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes DWSD management to include $2.25 million for water affordability actions in the FY 2018 budget and to further develop an inclining block rate structure and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
Body
Agenda of February 15, 2017
Item No. 17-0045
Title: Approval of Affordability Action Items for Development and Inclusion in FY 2018 Budget
Marcus Hudson
TO: The Honorable
Board of Water Commissioners
City of Detroit, Michigan
FROM: Gary Brown, Director
Water and Sewerage Department
RE: Approval of Affordability Action Items for Development and Inclusion
in FY 2018 Budget and to further develop an Inclining Block Rate
Structure
MOTION
Upon recommendation of Marcus Hudson, Chief Financial Officer, the Board of Water Commissioners for the City of Detroit, Water and Sewerage Department authorizes DWSD management to include $2.25 million for water affordability actions in the FY 2018 budget and to further develop an inclining block rate structure and also authorizes the Director to take such other action as may be necessary to accomplish the intent of this vote.
JUSTIFICATION
Currently, 40 percent of Detroit's residential customers live below the poverty line. Further, the monthly water and sewerage bill for approximately 55 percent of Detroit residences exceeds three percent of their monthly gross income; the level considered a burden by the United Nations. The income-bill relationship has led to significant collection costs and an excessive bad debt percentage which, even with improved collection efforts, currently stands at approximately 8-10 percent of revenue. DWSD Finance analysis suggest the financial benefit of a reduction in bills through improved collections, reduced collection costs, and lower customer contact management costs exceeds the costs of implementin...
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