The City of Lathrup Village has implemented significant changes to its water and sewer billing structure effective July 1, 2026, as the City works to ensure the long-term financial stability and sustainability of its utility systems.
Over the past several years, the costs of operating and maintaining the City's water and sewer systems have continued to increase. To evaluate the City's utility finances and develop a sustainable rate structure, the City worked with the Michigan Rural Water Association (MRWA) to conduct a comprehensive review of utility revenues and expenses and to determine the rates necessary to adequately fund system operations and future needs.
The review found that continuing with the City's previous billing structure would have resulted in the utility funds falling hundreds of thousands of dollars into arrears by the end of June 2027.
A New Ready-to-Serve Billing Structure
Under the City's previous billing structure, residents were charged a four-unit minimum for both water and sewer, regardless of their actual water consumption. Beginning July 1, 2026, the City transitioned to a Ready-to-Serve (RTS) billing structure for both water and sewer.
The new RTS charges are reflected as the RW and RS line items on utility bills. These fixed charges help cover the costs associated with maintaining a reliable water and sewer system, including:
Meter and billing costs;
Maintenance of public water and sewer pipes and equipment;
Access to the City's water and sewer systems;
Infrastructure repairs and replacement;
Future infrastructure needs;
Debt obligations; and
Maintaining the system and its availability 24 hours a day, seven days a week.
In addition to the RTS charges, the City adjusted its water and sewer rates to account for increasing costs for fuel, materials, labor, and other operational expenses. Customers are then charged a separate per-unit rate based on their actual water usage.
This approach more accurately separates the fixed costs required to maintain the utility system from the variable costs associated with individual water consumption.
What about secondary water meters for sprinkler systems?
The City’s sewer costs from the Evergreen Farmington Sanitary Drainage District (EFSD) are calculated, in part, based on the amount of water used within the City. As a result, even if the City allowed residents to install secondary water meters for irrigation or sprinkler systems, the water measured through those meters would still contribute to the City’s overall sewer charges. The City would therefore continue to incur sewer costs associated with that additional water usage.
Allowing secondary meters without appropriately adjusting the rate structure would also create an inequity among customers. The additional sewer costs generated by water used through secondary meters would have to be recovered through the City’s overall sewer rates, meaning residents who do not use secondary meters, and therefore do not generate that additional water usage, could effectively bear a portion of those costs. For this reason, allowing secondary meters would still require the City to adjust its rates or billing structure so that the additional costs associated with increased water usage are fairly allocated to the customers generating those costs.
Ensuring the Future of the City's Utility System
City Council, Administration, and the Water Department recognize that the changes to water and sewer bills represent a significant increase for some residents. The City understands the financial burden these increases may create for households.
Unfortunately, the changes have become necessary and unavoidable to maintain the financial health of the City's utility funds and ensure that Lathrup Village can continue providing safe, reliable water and sewer services while addressing the significant infrastructure needs facing the system.
The new rate structure is intended to provide a more sustainable and predictable financial foundation for the City's water and sewer operations, helping ensure that the system remains available and properly maintained for current and future residents.
Residents with questions about the new billing structure or their utility bill are encouraged to contact the City's Water Department.
For additional information, please contact:
Martha Bobcean
City of Lathrup Village Water Department
mbobcean@lathrupvillage.org