Citizens Advisory Committee Recommendation

The Water Infrastructure Citizens Advisory Committee has completed its work and delivered a recommendation to the City Commission. The City Commission received the recommendation on April 12, and is taking that under advisement as it develops the City’s June 30, 2022 through July 1, 2023 budget (referred to as Fiscal Year 2023 or FY23 from this point forward).

CAC Recommendation

The CAC made a recommendation to fund the water infrastucture project using three components to each raise one-third of the necessary revenue. For FY23, that revenue need will be about $900,000, so each component would generate about $300,000 of revenue. The CAC considered many options before arriving at their recommendation. The CAC was also focused on reducing the spread between the lowest and highest cost for households in the City. Under the full 3.5 mill option, the highest annual cost increase was $1,771 while under the CAC’s recommended option the highest annual cost increase would be $1,314, a reduction of 26%.

If the CAC’s recommendation is implemented, the three components will be as follows in FY23:

  • Millage. A millage of about 1.7 mills will generate the necessary revenue. This slightly less than half of the 3.5 mills approved by the voters in November, 2021.
  • Flat Ready-to-Serve Charge. A flat RTS of about $44.00 per water billing period will raise the necessary revenue. In FY21 the RTS was $42.50 per water bill, and in current FY22 the RTS is $82.50 per water bill.
  • Front-Foot Charge. A new charge will be added to water bills based on the width of each property. Each resident will pay about $0.77 per front foot per bill to raise the necessary revenue (we are converting the CAC’s annual front foot charge into a per-bill charge). The CAC included this new charge as a way of apportioning costs proportionately based on a characteristic of the property that has a proportional relationship to the cost of water main infrastructure. Properties will be capped at 100 feet wide for the purpose of this charge. 31 properties in the City are wider than 100 feet.

The CAC also recommended that each component be adjusted equally to maintain a one-third funding share if the City receives external funding that reduces the cost of the project, or if costs increase and additional revenue is needed.

The CAC considered water usage rates as a method for raising infrastructure revenue, but did not include that method in their recommendation. Water usage rates will be reduced for FY23 compared to FY22.

Next Steps

The City Commission is in the process of reviewing the FY23 budget, which includes the millage and water rates. The budget and water rates will be introduced at the May 10 City Commission meeting, with a budget public hearing on June 14.

If approved the average water customer will see a 7.75% reduction in water/utility bills with an increase on property tax bills. The amount of the property tax increase will depend on each property’s taxable value and the City’s final FY23 millage rate, which includes the water infrastructure millage and all other City, Ferndale School, Oakland County, and other taxing jurisdiction millages.

Scroll to Top