Detroit approves FY27-28 operating budgets but delays vote on 3.5% rate hike

Detroit approves FY27-28 operating budgets but delays vote on 3.5% rate hikeThe Board of Water Commissioners advanced a $543.8 million revenue requirement for FY27, heavily influenced by rising GLWA wholesale costs, though a vote on the corresponding retail rate increase awaits a special meeting.

The board approved FY 2026-27 operating budgets of $156.7 million for water and $386.9 million for sewer.

The system's revenue requirement will increase by $22.5 million (4.3%), with GLWA wholesale charges accounting for $13 million of the jump.

A proposed 3.5% system-wide rate increase could not be voted on due to the absence of a board supermajority.

The budget supports the addition of 15 new operations positions and the replacement of at least 3,500 lead service lines.

The Detroit Board of Water Commissioners has approved the Detroit Water and Sewerage Department's (DWSD) operating budgets for the next two fiscal years, though a vote on a corresponding 3.5% rate increase was delayed due to attendance shortages. During the March 18, 2026 meeting, the board authorized FY 2026-27 operating budgets of $156.7 million for the Water Operating Fund and $386.9 million for the Sewage Disposal Operating Fund. For FY 2027-28, the budgets will rise to $165.7 million and $405.5 million, respectively. DWSD Chief Financial Officer István Rahman outlined that the FY 2027 revenue requirement will grow by $22.5 million, a 4.3% increase over the previous year, bringing total system-wide revenue needs to $543.8 million. The primary driver of this increase is a $13 million jump in wholesale charges from the Great Lakes Water Authority (GLWA), which accounts for 57.8% of the total revenue requirement increase. Personnel expenses will also rise by $4.8 million to accommodate 15 new operations positions, compensation adjustments, and higher city fringe benefit rates. To support the budget, Rahman proposed a 3.5% rate increase across all service categories, excluding fire lines. However, General Counsel Scott McGriff informed the commissioners that a rate approval requires a board supermajority. Because several commissioners were absent, the board lacked the necessary numbers to vote on the rates and instead passed a motion to schedule a special meeting to address the rate schedule separately. The approved budget will fund several major asset management and service initiatives. Rahman noted the department plans to clean 600 miles of sewer, inspect and clean 8,000 catch basins to mitigate street flooding, and replace at least 3,500 lead service lines, with the potential to scale up to 8,000 lines if additional funding is secured. The board also heard updates on affordability and system maintenance. Staff confirmed the Lifeline H2O affordability program is nearing its current funding cap. The program currently enrolls 4,010 households and will cap at 4,500 by the end of the month, as DWSD exhausts its allocated funds and continues to search for additional revenue sources. Meanwhile, crews are working to repair a ruptured 42-inch water main on East Jefferson originally installed in 1875, awaiting custom couplings to complete the repair before permanently transitioning service to newer 12-inch mains.