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City officials correct DWSD revenue estimate; say bonds unlikely to affect FY26 rates
Summary
City finance staff and DWSD said the revenue estimating conference overstated Detroit Water and Sewer Department (DWSD) FY26 revenues. Officials lowered the FY26 projection to about $618 million and said DWSD will not issue bonds in FY26 but may seek roughly $60 million in FY27, which would affect ratepayers only through long‑term debt service.
Acting Treasurer Valerie Agoli and Lashonda Davis, director of finance for the Detroit Water and Sewer Department, told the Budget, Finance & Audit Committee on Feb. 13 that the revenue estimating conference relied on stale information and overstated DWSD revenue projections.
"The 23% increase for fiscal year 26 was not accurate," Lashonda Davis said. "Estimates will actually be $618,000,000." She added that the conference report had incorrectly reflected bond proceeds and other non‑operating items as part of revenues and that DWSD will not be issuing bonds in fiscal year 2026.
The corrected projection reduces the year‑over‑year increase previously reported. Agoli said the city has asked DWSD and Treasury to provide updated numbers and that the Office of Treasury will publish a revised revenue conference report reflecting DWSD's corrected estimates.
Public commenters had urged clarity before the presentation. Russ Belant asked the committee to explain whether the larger FY26 figure represented customer revenue alone or also included bonds and other funds. "I would like to know how much DWSD will actually be collecting in fiscal year 2026 based on the best estimates," Belant said during public comment.
Officials told members the previously reported increase was driven in part by an assumed bond issuance. Davis said that assumption was incorrect: if DWSD issues bonds, the department is now more likely to do so at the end of fiscal year 2027, when it may seek roughly $60 million split evenly between water and sewer projects. "If we do issue bonds in fiscal year 27, it will be at the end of the fiscal year," Davis said, and any proceeds would be applied to capital projects and not immediately to ratepayer bills.
Committee members pressed for documentation. Vice Chair Leticia Johnson asked staff to provide the updated estimates for public review once DWSD completes rate negotiations and the Board of Water Commissioners approves any final numbers. Davis said DWSD has provided updated figures to the Office of Budget and Treasury and that the city would release supporting documents after internal reviews and board approvals.
Officials also explained how wholesale payments to the Great Lakes Water Authority factor into the city's rates. Davis said the GLWA payment to DWSD remains a flat $50 million with no inflation adjustment, meaning the relative value of that payment diminishes over time unless renegotiated.
Davis and Agoli said the administration has put additional controls in place to avoid future errors in revenue conference materials, including incorporating DWSD reviews into preliminary revenue document reviews and establishing monthly meetings between DWSD and budget staff.
The committee did not vote on a resolution related to the corrected figures but asked staff to circulate the revised revenue conference documents and follow up in forthcoming budget hearings.
