Question 1

Why did I get a Notice?

Accepted Answer

A proposed settlement in the amount of $4,450,000 has been reached with the City
of Detroit (the “City”) in a class action lawsuit pending in Wayne County
Circuit Court titled Ajax Metal Processing, Inc. v. City of Detroit, Case No.
23-015314-CB, presiding Judge Annette J. Berry (the “Lawsuit”).

Question 2

What is the Lawsuit About?

Accepted Answer

The Lawsuit challenges the City’s tiered retail water volumetric rates (the
“Tiered Rates”) applicable to users of its water supply services.  Plaintiff
alleges that the Tiered Rates (consisting of a Tier 1 rate for water usage less
than or equal to .6 MCF, and a Tier 2 rate for water usage above .6 MCF) are
inclining block rates that result in charges to certain higher-volume users
which allegedly exceed the City’s cost of servicing those users (the “Charges”).
 The City maintains that its Tiered Rates are not inclining block rates and
reflect a fair and proportional allocation of its water costs to both the
public-health based lifeline rate (Tier 1 rate) and the uniform rate (Tier 2
rate) based on the monthly water usage by all customers.  Plaintiff has brought
these claims on behalf of itself, and a class of all others similarly situated.

Question 3

Why is there a Settlement?

Accepted Answer

Plaintiff is an entity which has paid the Charges imposed by the City.

The Plaintiff seeks a judgment from the Court against the City which would order
and direct the City to disgorge and refund all Charges to which Plaintiff and
the Class are entitled and would grant any other appropriate relief.

The City denies that the City’s Charges are improper or materially in excess of
the actual expenses of providing water service.  Thus, the City denies the
Plaintiff’s claims, denies that it acted improperly or unlawfully, denies that
the Tiered Rates preference certain high-volume users over others, denies any
wrongdoing, and contends that it should prevail in the Lawsuit.  The Court has
made no final adjudication concerning the merits of the Lawsuit at this time.

On May 17, 2021, the Court entered an order certifying the Lawsuit as a class
action.  You received the Notice because the City’s records indicate that you
are a person or entity who (1) paid or incurred Charges between August 1, 2022
and May 31, 2026 (the “Class Period”) and (2) used an average of at least 1.0
MCF per month during that time period and are, therefore, a Class Member for
settlement purposes unless you request to be excluded from the Class.

The Plaintiff and the City each understand the risks of proceeding to trial on
the merits of the claims asserted in the Lawsuit and prevailing on their
respective positions based on the existing legal principles and developed
factual record.  To avoid the risks, expense, and inconvenience of continued,
protracted litigation, the Plaintiff and the City have entered into a settlement
agreement
[https://angeion-public.s3.amazonaws.com/www.detroitwatersettlement.com/docs/Detroit+Block+Rates+Settlement+Agreement++w+exhibits+FINAL+June+15+2026.pdf(51084206.1).pdf]
dated June 18, 2026 (“Agreement”) to resolve the Lawsuit. The Plaintiff and the
City have agreed to resolve and release all of the claims that were or could
have been asserted in the Lawsuit in accordance with the following overarching
terms (the “Settlement”).

Question 4

What does the Settlement provide?

Accepted Answer

The City has agreed to create a Settlement Fund (the “Settlement Fund”) in the
amount of Four Million Four Hundred Fifty Thousand Dollars ($4,450,000 USD) for
the benefit of the Class (“Settlement Amount”).  The Settlement Amount will be
utilized, with Court approval, to provide Credits or Refunds (as further defined
in the Agreement and below) to the Class, and to pay Class Counsel an award of
attorneys’ fees, the total amount of which shall not exceed 40% of the
Settlement Amount, and expenses for pursuing the Lawsuit.

The “Net Settlement Fund” is the Settlement Amount less the combined total of:
 (a) the attorneys’ fees awarded to Class Counsel by the Court; (b) expenses
reimbursed pursuant to the terms of the Settlement; (c) out-of-pocket expenses
of the Claims-Escrow Administrator, and (d) any incentive award made by the
Court to the Class representative in an amount not to exceed $20,000.

Question 5

How can I get a payment?

Accepted Answer

The Net Settlement Fund shall be used to give Credits or Refunds to Class
Members as described below.

a.    The Claims-Escrow Administrator shall calculate each Class Member’s pro
rata share of the Net Settlement Fund (the “Pro Rata Share”).  Only those Class
Members who paid or incurred Charges during the Class Period are entitled to
distribution of a Pro Rata Share of the Net Settlement Fund.  Class Counsel has
determined that the size of each Class Member’s Pro Rata Share shall be set by
(1) calculating the total amount of volumetric water charges the City assessed
against the property or properties of that Class Member during the Class Period
and then (2) dividing that number by the total amount of volumetric water
charges the City assessed against all Class Members during the Class Period and
then (3) multiplying that fraction by the amount of the Net Settlement Fund.

b.    All Class Members as of May 31, 2026 who remain current water and/or sewer
customers of the City as of August 26, 2026 are eligible to receive the Pro Rata
Shares of the Net Settlement Fund via the application of a Credit against a
Class Member’s water account. The Credit will be applied over a six-month
period, utilizing the portion of the Net Settlement Fund retained by the City
(the “City Administered Portion”).  Class Members do not need to do anything to
receive a Credit, but Class Members who have unpaid balances for water Charges
that are more 30 days past due as of August 26, 2026 (the “Outstanding Balance”)
will have their Credits reduced by the amount of their water accounts’
Outstanding Balance as further set forth in Paragraph 10(e) of the Settlement
Agreement
[https://angeion-public.s3.amazonaws.com/www.detroitwatersettlement.com/docs/Detroit+Block+Rates+Settlement+Agreement++w+exhibits+FINAL+June+15+2026.pdf(51084206.1).pdf].

c.    Only Class Members who are no longer water customers of the City as of
August 26, 2026 and do not have any unpaid account balances with DWSD which
equal or exceed their Pro Rata Shares are eligible to receive a distribution of
cash via check (a “Refund”) from the Net Settlement Fund. To qualify to receive
a Refund from the Net Settlement Fund, Class Members must no longer be water and
/ or sewer customers of the City and must submit sworn claims [/submit-claim]
(the “Claims”) which identify their names, addresses, and the periods of time in
which they incurred or paid the Charges in order to participate in the
Settlement. Class Members who submit qualifying Claims are referred to as
“Claiming Class Members.” The Claiming Class Members will be required to submit
those claims no later than August 26, 2026.  Only Claiming Class Members who
submit valid claims are entitled to Refunds.  The Claims Escrow Administrator
will distribute the Refunds to the Claiming Class Members.  Any Claiming Class
Members who have an Outstanding Balance that is less than their Pro Rata Shares
will have their respective Refunds reduced by an amount equal to any such
Outstanding Balance.  The reduction will be treated as a Credit that offsets the
Outstanding Balance.

d.    Class Members thus will be separated into three (3) groups, each of which
will benefit from the Settlement as follows.

i.    Group 1 – Class Members who are water customers as of August 26, 2026 and
have Outstanding Balances equal to or greater than their respective Pro Rata
Shares of the Net Settlement Fund.  Group 1 Class Members will receive a Credit
against their Outstanding Balances in the amount of their Pro Rata Shares paid
from the City Administered Portion irrespective of whether the Class Member has
submitted a sworn claim.  If the Class Member’s Pro Rata Share of the Net
Settlement Fund is less than such Class Member’s Outstanding Balance, the
Outstanding Balance will be reduced by the amount of that Pro Rata Share, and
the Class Member will still owe any remaining Outstanding Balance.

ii.    Group 2 – Class Members who are water customers as of August 26, 2026 and
have no Outstanding Balances or whose Outstanding Balances are less than their
Pro Rata Shares of the Net Settlement Fund.  Group 2 Class Members without
Outstanding Balances will receive from the City Administered Portion a Credit to
be applied against future charges that accrue in the Class Member’s water
account until the Credit is exhausted. Group 2 Class Members who have
Outstanding Balances will receive a Credit against their Outstanding Balances to
the extent of their Outstanding Balances. The Credit will then be applied
against any future charges that accrue in the Class Member’s water account until
the Credit is exhausted.

iii.    Group 3 – The Claiming Class Members, i.e., the Class Members who are no
longer water customers of the City as of August 26, 2026 and do not have an
Outstanding Balance  that equals or exceeds their Pro Rata Shares. Group 3 Class
Members are eligible to receive a Refund from the Net Settlement Fund.  Group 3
Class Members must submit timely and valid sworn claims to receive a Refund.
However, if the Class Member who is no longer a water customer of the City as of
August 26, 2026 has an Outstanding Balance, the Class Member’s Refund will be
reduced by the amount of the Outstanding Balance before any Refund is issued to
the Class Member.

It is very important for any Class Member who paid the Charges but who is no
longer a water customer of the City as of August 26, 2026 to submit a Claim
[/submit-claim].  The only way for Class Members who are no longer water
customers of the City to receive a portion of the Net Settlement Fund is for
them to file Claims.

In addition to the Credits and Refunds described above, the parties have agreed
that, beginning January 1, 2027 through June 30, 2027, as part of the
Settlement, the City will reduce the Tier 2 Volume Rate by $6.22 per MCF (the
“Tier 2 Volume Rate Reduction”). Thus, effective January 1, 2027 (through June
30, 2027), the City will adopt the following Tier 2 Volume Rate:

Tier 2 Volume Rate per MCF: $44.99

The Tier 2 Volume Rate Reduction will be offset by a nominal increase in the
monthly Service Charges (the “Service Charge Adjustment”) for the same period.
 For example, for a 5/8” equivalent meter, the monthly Service Charge will
increase from $8.68 to $11.09.

For the fiscal years beginning July 1, 2027, July 1, 2028, and July 1, 2029, the
City shall utilize the current methodology for determining the Tier 2 Volume
Rate and Service Charges, and may increase the Tier 2 Volume Rate and the
Service Charges to reflect the overall annual increase in the City’s Revenue
Requirements for its Water Fund.  For example, if the City’s Revenue Requirement
for the fiscal year beginning July 1, 2027 increases by, e.g., 4%, the City may
increase the Tier 2 Volume Rate and the Service Charges for the fiscal year
beginning July 1, 2027 by 4% each.

Based upon historical Tier 2 volumes of approximately 1.8 million MCF per year,
Class Counsel has valued the Tier 2 Volume Rate Reduction at approximately $39
million USD for (a) the period including and between January 1, 2027 through
June 30, 2027 and (b) the duration of the fiscal years beginning July 1, 2027,
July 1, 2028, and July 1, 2029 (together, the “Prospective Relief Period,” i.e.,
January 1, 2027 through and including June 30, 2030).

FAQs

About the Settlement

Settlement Benefits

Excluding Yourself from the Settlement

Lawyer and Hearing Information

Requesting More Information

About the Settlement

1. Why did I get a Notice?

2. What is the Lawsuit About?

3. Why is there a Settlement?

Settlement Benefits

4. What does the Settlement provide?

5. How can I get a payment?

Excluding Yourself from the Settlement

6. How do I exclude myself from the Class?

Lawyer and Hearing Information

7. Do I have a lawyer in the case?

8. When and where will the Court decide whether to approve the Settlement?

Requesting More Information

9. Are more details about the Settlement available?

10. How do I get more information?