2025-2026 Water, Sewer, and Storm Water Rates

Water, sewer, and storm water rates are adjusted every July 1st to reflect the cost of supplying water, providing for the disposal of sanitary sewage and storm water, and maintenance and replacement of the City's infrastructure.  The 2025-2026 rates go into effect for all bills where the meter read date was on or after July 1st.  Residents will begin receiving bills with the new rates in August.  The City Commission recently approved the following rate increases:

• Water rates will increase 20% from $7.38 to $8.87 for every 1,000 gallons of water used. 
• Sewer rates will increase 14% from $11.26 to $12.88 for every 1,000 gallons of water used. 
• Storm water rates will increase 12% for water accounts in the Evergreen-Farmington Sewage Disposal District from $79.25/quarter/ESWU (Equivalent Storm Water Unit) to $90.30/quarter/ESWU and 1% for water accounts in the Southeast Oakland County Sewage Disposal District from $74.00/quarter/ESWU to $79.26/quarter/ESWU. 

The average residential account using 90,000 gallons per year and living on a property with an ESWU factor of 1 would see an increase in their water and sewer bill of approximately $280/year or about $24/month.

To better understand why rates increased, it is important to understand what the objective of rate setting is and what components make up a rate.  The purpose of setting a rate at a particular amount is to ensure that the cost of providing water and sewer services is covered by the revenues received from utility users through rates.  The cost of providing the service includes the cost of the water or the cost of sewage disposal, the cost of maintenance on the City's water and sewer infrastructure, and the cost of replacing the City's water and sewer infrastructure.  The discussion below provides a more detailed explanation for the increase in the rates.

Water Rate

Approximately 90% of the water rate increase is to provide additional funding for infrastructure replacement.  The cost of replacing water mains has increased dramatically over the past couple years due to an increase in material and labor prices from contractors.  However, it is important to continue making improvements to the City's infrastructure so that water services are reliable for not only basic living needs but for fire services as well.  More discussion on the increase in infrastructure funding is provided later in this FAQ.

Approximately 10% of the rate increase is the result of the cost of water.  The City purchases its water from the Southeastern Oakland County Water Authority (SOCWA) which in turn purchases the water from the Great Lakes Water Authority (GLWA).  SOCWA maintains the water mains that connect the 11 communities that make up SOCWA to GLWA's water mains.  The rates that the City pays for water are determined by SOCWA and GLWA.  

City maintenance costs did not contribute to the increase in the rates for this fiscal year.  The increase in maintenance costs was offset by an increase in investment income.

Sewer Rate

Approximately 91% of the sewer rate increase is to provide additional funding for infrastructure replacement.  The cost of replacing sewage lines has increased dramatically over the past couple years due to an increase in material and labor prices from contractors.  However, it is important to continue making improvements to the City's infrastructure so that sewage is removed efficiently and reliably from the City.  More discussion on the increase in infrastructure funding is provided later in this FAQ.

Approximately 11% of the rate increase is the result of the cost of sewage disposal removal.  The City contracts with Oakland County Water Resources Commissioner (OCWRC) for sewage disposal, who in turn contracts with the GLWA to provide final disposal of the sewage.  The OCWRC is responsible for maintaining the sewage lines that transfer sewage from Oakland County communities to the GLWA connection points in Detroit.

City maintenance costs did not contribute to the increase in sewer rates for this fiscal year.  The decrease in maintenance costs served as a reduction to the overall rate increase due to infrastructure and sewage disposal costs.

Storm Water Rates

The entire storm water rate increase is a result of increased costs from the OCWRC.  The City does not contribute to storm water rates.

The City annually prepares a schedule of infrastructure projects and related costs for 6 years into the future.  This schedule was compared to the current level of funding provided in the rates for infrastructure improvements.  The result was a significant annual deficit in funding for infrastructure in the rates. The water and sewer funds do not have sufficient reserves to fund these deficits.  Additionally, these deficits were causing projects to get delayed, putting the City behind on infrastructure replacement.  Left unchecked, this would have led to a compounding problem of projects being delayed resulting in a deterioration of the City's infrastructure.  At last year’s annual budget hearing, the City Commission recognized the need for increased funding to support critical infrastructure projects.  As a result, they approved a two-year plan to significantly raise the infrastructure portion of the water and sewer rates to levels necessary for maintaining the City’s infrastructure improvement schedule. This year marks the second year of that approved rate increase.    

Every year, City staff develops budgets for the following fiscal year.  These budgets are used to determine projected water and sewage costs.  These costs are reduced by other revenue generated by the respective systems (interest income, inspection fees, etc.).  The net cost is divided by the projected number of units of water to be sold during the year to arrive at a rate per unit of water sold.  Below is a summary of the calculation for water and sewer rates for this year:

Yes, the City Manager reviews the department budgets which form the basis of the respective system costs.  The budgets along with the rates are presented to the City Commission at the annual budget hearing conducted in April.  The City Commission gives feedback to the City Manager on the budgets/rates.  Any changes to the budgets/rates are presented to the City Commission at a regular scheduled meeting (usually in June) where they are approved.

The portion of the water and sewer rate that the City controls is approximately 60% and 47%, respectively.  Unfortunately, there is not much we can do about costs outside of the City's control (GLWA and OCWRC charges).  We do communicate our concerns over rate increases with the various responsible agencies when needed.

The City is constantly reviewing the way we maintain our systems and looking for efficiency gains whenever possible.  We have implemented an automated meter reading system which nearly eliminates the need for human meter reading externally or internally.  Another way the City is reducing costs is by switching newly hired employees to a defined contribution retirement and retiree health savings plan.  These new retirement benefits will keep costs lower and more predictable from year-to-year.

Residents can lower their bill by checking for leaking toilets and sinks, adjusting lawn sprinkling times and days, and purchasing water conserving shower heads and toilets.  In addition, water customers can monitor their own water usage by registering their water account with Aquahawk. Follow this link to sign up for this free service.

If you have additional questions, please call the telephone numbers listed below or feel free to send an email to water@bhamgov.org.

City of Birmingham

Water Department

Phone:  248-530-1830

Fax:  248-530-1070

email:  water@bhamgov.org

website:  www.bhamgov.org/waterbill

Oakland County Water Resources Commissioner

Phone:  248-858-0958

email:  wrc@oakgov.com

website:  www.oakgov.com/drain

Great Lakes Water Authority

Phone:  844-455-4592

email:  info@glwater.org

website:  www.glwater.org