1. Water & Sewer Rates Workshop

2. How are Wholesale Water Rates Determined?
Township is a wholesale customer of Great Lakes Water Authority
Relationship is governed by a model contract, same for all customers, no “negotiating”
Rate methodology developed by Technical Advisory Committee(TAC)
TAC determines factors and their impact which influences rates
Overall, wholesale rates are determined by GLWA annually based on their revenue requirements
Community revenue requirement based on volume (2-yr average) and composed on commodity and fixed rates

3. How are Wholesale Water Rates Determined?
Intrinsic rate factors:
Distance to treatment plants
Elevation relative to treatment plants
Variable rate factors:
Annual Volume (mcf)
Max Day Demand (MGD)
Peak Hour Demand (MGD)

4. Factor 1: Distance to Treatment Plants

5. Factor 2: Elevation Relative to Treatment Plants
Key Elevations
WG-01 (30.5 Mile) – 788’
WG-02 (26 Mile) – 733’
Wash. Twp. Hall – 695’
Stratford – 875’
Macomb Twp. Hall – 615’
Shelby Twp. Hall – 675’
Clinton Twp. Hall – 600’
Water Works Park – 585’
Lake Huron – 581’

6. Variable Factors Affect of Variable Rates
Annual Volume goes up, rates go down
Max day demand goes up, rates go up
Peak hour demand goes up, rates go up
Goal of Tank
No change to volume
No change to max day demand
Lower peak hour demand equal to max day demand

7. How Does the Tank Work? Eliminates Peak Hour Demand
Tank is filled during approved GLWA period (11 PM – 5 AM)
Flow is released from the system during daytime peaks
5 AM to 10 AM
6 PM to 9 PM
SCADA controls all actions
Tank is filled and emptied using system pressure and pumps

8. How Does the Tank Work?
Max Day
Peak Hour

9. How Does the Tank Work?

10. Results of Tank Construction
Township requests non-scheduled contract opener
Review of operational data from summer of 2016
Exhibit B revised to making max day equal to peak hour
Wholesale revenue requirement to GLWA decreases
Savings passed onto customers

11. Why 1st Quarter FY2017 Bills Were So High
Two factors combined to impact Q1 FY2017 bills:
+/-25% increase from GLWA effective July 1, 2015
Drought or near drought conditions all summer

12. Why 1st Quarter FY2017 Bills Were So High
*Note - lowest rainfall for this quarter in 10 years

13. How Do Township Bills Compare
Commodity Rate Comparison (residential customer)
Washington Rochester Hills Shelby Twp.
$3.60/cf $5.32/cf $3.954/cf
$3.53/cf $5.37/cf $5.077/cf
Water
Sewer
Fixed Charge Comparison
Washington Rochester Hills Shelby Twp.
$45.00/qtr. $4.35/qtr $2.50/qtr.
$49.50/qtr. $4.35/qtr $1.65/qtr.
Water
Sewer

14. How Do Township Bills Compare
Effects of Fixed Charge and Commodity Rate
Washington* Rochester Hills* Shelby Twp.*
$ $ $193.10
$ $ $320.21
$ $ $460.57
$ $ $207.21
$1, $ $1,181.09
1st Qtr.**
2nd Qtr.
3rd Qtr.
4th Qtr.
*Assumes 1 REU with average annual usage of 10,723 cf
**Quarter refers to calendar year quarter, i.e. 1st Qtr = January through March

15. Changes to Billing Process
Rate changes take effect October 1 each year
Delays in changes from County/GLWA
Irrigation scheduling, Township to provide suggested times
Potential move to monthly bills
Budget/payment plan options
Irrigation/second meter options

16. Questions