DWSD reports positive 2024 results, vows to limit rate increases after transmission-line break that displaced hundreds

Detroit water officials and the city’s legislative analysts told the Budget, Finance & Audit Standing Committee on March 11 that audited results for the Detroit Water and Sewerage Department show net position increases for both water and sewer funds, and that the department will seek to limit customer rate increases while addressing an aging transmission system that recently failed and displaced hundreds of households.

The Legislative Policy Division presented audited financial highlights for the year ended June 30, 2024, noting the Water Fund had operating income of about $32,000,000 and capital grants of about $46,000,000 (an increase in net position of roughly $70,000,000), and the Sewerage Disposal Fund had operating income of about $41,000,000 and capital grants near $25,000,000 (an increase of roughly $65,000,000). "DWSD's June 30, 2024 audited financial statements indicate that both the Water Fund and the Sewerage Disposal Fund had positive results," the presenter said during the meeting.

Why it matters: committee members pressed department leaders on affordability, planned capital spending and emergency response after a major transmission-line break in Jefferson Chalmers. Director Brown and DWSD finance staff said the wholesale authority’s proposed rate increase prompted concern but that DWSD expects to pass through a smaller increase to customers.

Committee-level context and promises Director Brown, speaking for the Detroit Water and Sewerage Department, said the Great Lakes Water Authority (GLWA) initially proposed a wholesale increase as high as 7.73 percent before representatives and advocates pushed the proposal down; GLWA revised the proposed water increase to 5.9 percent and sewer to 4.5 percent. "That's a wholesale rate," Brown said. "We will maintain the less than 4% or less promise that has been made the last 10 years." He told council members DWSD expects to present its proposed customer-level rates during the department’s budget hearing on March 21.

Ledger and revenue details Legislative analysts told the committee commodity (volume) revenue for water rose by about $6,000,000 and water service-charge revenue rose by about $1,300,000 versus budget, while drainage-charge revenue fell short of budget by about $5,700,000, partly because of fewer billable impervious acres and increased green credits. Analysts also said employer benefit costs were about 50 percent under budget due to changes in shared pension reimbursements from GLWA coming out of bankruptcy.

Lead-service-line program and federal funding The presenters and DWSD staff discussed lead-service-line replacement: the department has replaced roughly 12,000 lead service lines to date and is targeting 5,000–10,000 replacements per year as long as federal funding continues. Director Brown said DWSD’s goal is to do 10,000 lines a year for 10 years and that he moved $30,000,000 of bond money to keep the program operating. Brown also noted a separate federal grant of about $346,000,000 to prevent basement flooding that the department is implementing.

Emergency response to transmission-line failure Council members pressed DWSD on a recent failure of a 54-inch transmission line that Brown said is about 93 years old and runs through a neighborhood near the water treatment plant. Brown said the break "displaced 418 homes" and that he has asked GLWA’s capital committee to invest $20,000,000 to realign and reline that single transmission line. Brown said contractors are working to remove mud and debris from sewers to restore capacity ahead of spring rains and listed ongoing recovery actions: as of the committee report, crews were addressing about 103 basements needing furnace work, with 23 completed and a target to complete more than 35 by the end of the day and finish the remaining work the following week.

Affordability pressures and policy limits Brown and DWSD financial staff said there is no long-term dedicated state or federal funding for water affordability; they described prior legislative efforts that did not reach a vote. Brown said the department must balance capital needs, the unfunded EPA expectation to remove a large share of lead lines over a decade, and the city’s affordability programs, which he characterized as robust but not fully funded.

What the committee did After the presentation and discussion, the committee voted by unanimous consent to receive and file the Legislative Policy Division report on DWSD’s audited financials and related matters (line item 5.3). The department will appear before the committee during council’s budget deliberations for a fuller review of next fiscal year’s proposed budget and rates.

Ending DWSD staff said they will return to the committee with more detailed budget materials during the city’s budget process and that they will provide a map of major transmission lines through Detroit so council members and residents can better understand where large lines run through neighborhoods.