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Secondary Meter Analysis

The City of Bloomfield Hills receives requests regarding instituting a policy to permit the installation of secondary water meters. These meters are used to record the volume of water used for outdoor purposes such as irrigation, pool filling, car washing, etc. Residents installing the secondary meter do so for the purpose of saving money on their sewer bill since sewage is billed based on water consumption, and the water theoretically does not enter the sanitary sewer system. For an individual water user that does not practice conservation or irrigates excessively, this could amount to significant quarterly savings. However, these individual savings are offset by increases to all residents who do not install a secondary meter, are good conservationists, and to the City as a whole. The following explains how secondary or dual meters impacts costs and thus rates.

oth the Detroit Water and Sewerage Department (DWSD) and the Oakland County Water Resources Commissioner’s office (WRC) have minimum revenue requirements to convey and treat sewage and operate and maintain the sewer system. Currently, to determine the sewer rate from both DWSD and WRC, they take their required revenue to perform these services and divide it by the anticipated total sewer consumption of the City. However, because the technology to individually meter sewer flows for homes is not currently available, the City currently bills sewer based on water meter readings. Therefore, the fixed costs necessary to pay DWSD and WRC, as well as to operate and maintain the City’s local system, are allocated on water usage. If a resident were to install a secondary meter, and these volumes were taken out of the sewer rate calculation, there would potentially be an impact on sewer rates. A simple example is if everyone in the City installed a dual meter and used 50% of their water outdoors, sewer rates would double to generate the same revenue needed for the system and there would be no savings let alone a return on the investment made by installing a second meter.

Secondary meters are explicitly used to record the volume of water that is spent for outdoor purposes to deduct this volume for the user’s sewer bill. This does not mean that the sewage generated from a residence of business will decrease. This is important because the revenue requirement is based on the anticipate sewage volumes. Therefore, secondary meters have no impact on the revenue requirements of the agencies providing services to the City. It is estimated that as the number of residents or businesses that install secondary meters increases, the rate increase necessary to support the revenue requirements gets shifted to those residents that elect not to install the secondary meter until such time as everyone has a secondary meter and no one realizes any net savings.

Furthermore, secondary meters operate under the premise that none of the water that is used for outdoor purposes will make it into the sanitary sewer system. While in theory, outdoor water use should not make it into the sanitary sewer system, there are several ways where this water will infiltrate into the sewer system, as outlined herein.

1. Groundwater Infiltration
   Outdoor water usage often results in water seeping into the ground and potentially entering the sanitary sewer system through footing drains, open joints or cracks in the system, or manhole deficiencies. While the City is working diligently to eliminate these sources of infiltration, due to the age of the system, it is impossible to keep all surface and ground water sources out of the sanitary sewer system.
2. Bloomfield Hill’s Combined Sewer District
   A small portion at the south end of the City is located in a combined sewer district. This means that along with the sanitary sewer flow, all catch basins, footing drains, downspouts, etc. are connected to the combined sewer. Therefore, all surface water from irrigation, car washing, etc. drains directly into the catch basins and into the combined sewer, where it is eventually conveyed to DWSD for treatment. As conveying and treating this runoff must be paid for, discounting the user by the installation of a secondary water meter would mean an increase in the overall sewer rate.

Therefore, with the installation of a secondary water meter, these flows would not be billed on a resident’s sewer bill. However, these volumes must be transported and treated and would need to be paid for by the City. This is especially true as the City is now based on metered sewer flow, rather than master meter water use as was done in the past.

The cost to install a secondary meter would be approximately $800-$1200 for a single family home. This cost would need to also include the cost to purchase a meter (assuming the City would provide the opportunity for the meter purchase), the plumbing permit and inspection fee, and the resident’s cost to hire a plumber to install the meter in accordance with City standards. Based on the current sewer rate of $30.18/unit (1 unit = 1000 cubic feet), a resident would have to realize a savings of 34 units in order to pay back the initial costs of installing the meter, assumed to be $1200.00. As savings are only realized in the summer/irrigation seasons, it would likely take several years for these savings to be realized as shown herein:

Assumptions:
Sewer rate of: $30.18
Water rate of: $37.79
Base Water Bill = Fall Average Usage plus 25% as it is assumed that not all of the additional usage in the Spring and Summer is due to irrigation and outdoor use. Therefore, the base average bill is 5.9 MCF.

However, as discussed herein, the sewer rate will need to increase to cover the fixed cost components of operating and maintaining the system as described above, and the overall cost savings to an individual resident would decrease. As the sewer rate continues to increase, the payback period will also continue to increase.

Summary

Secondary meters will in fact cause sewer rates for all City users to increase. While all users will be paying higher rates, those with secondary meters will be paying on less water usage and therefore may realize a savings. This provides a significant benefit to the users that would be first to install a secondary meter. However, as more and more secondary meters are installed, the savings of the existing secondary meter users will diminish while causing everyone else’s rate to increase for using the same amount of sewer capacity as they always have. In the end, DWSD, OCWRC, and the City will still receive the revenue needed to operate and maintain the system. Secondary meters simply redistribute the cost of doing so to the residents that do not choose to participate in installing a secondary meter. The only way this would make sense from an engineering perspective is if the City were selling the meters. The City could use the revenue generated from meter sales to offset the increased cost to everyone else. However, unless the costs of the secondary meters are substantially higher than the $400-$700 typically charged by the area communities that allow this, this is not feasible.

There are three historical political perspectives on this. The first is that the people likely asking for this to be allowed and therefore can take advantage of this type of program are those who are currently driving the water rate increases seen in recent years. For a secondary meter to be an attractive proposition for a resident, they have to assume that the costs of the meter and the installation costs will be paid off by the savings in a reasonable time frame. In other words, if you an over user of the water system, you will save more and pay off the improvement costs in a shorter timeframe. However, it is the over users of the system that are causing system problems talked about in the past. Basically, you will reward those residents that over irrigate their lawns, do not conserve water, and are not good stewards of the water and sewer systems.

The second perspective is that once people realize the amount of water they use for irrigation and other outdoor uses, they will become better at conserving this resource and the overall City’s use will improve. However, it is our opinion that this is not a conservation issue, rather a pure cost issue. We do not believe that secondary meters will show the user of such the benefits of conservation.

The third perspective is the estimated payback period. Payback period can dramatically differ based on the differential between winter season flows and irrigation season flows. Also, as the City must increase the water and sewer rates as a whole to make up for the shortfalls which may arise based on these secondary meters, the positive benefits will continue to decrease. Therefore, in the long run, there is little financial benefit for individual users supporting the installation of a secondary meter.
HRC does not recommend instituting a policy to permit the installation of secondary meters for the following reasons:

• It will cause everyone’s sewer rates to increase.
• It benefits the minority of customers that install the secondary meter first.
• It benefits high volume users.
• It simply redistributes costs of sewerage to the customers that do not install a secondary meter.
• Secondary meters, in our opinion, will not promote conservation within the City.
• Over users of the water system are rewarded for installing a secondary meter.