With a down economy and less growth in Independence Township, water and sewer funds need more money ? 25 perceent more from taxpayers in water and sewer rates.
In the past 18 years, rates went up once, in 2004, said Linda Richardson, Department of Public Works director.
‘The board at that time told me not to wait another 18 years, but instead to do a rate study every three years,? she said.
However, when Richardson wanted to talk about a rate increase in 2007 she said the ‘board didn’t want to hear it.? But by not raising the rates, she says the department has not been keeping up with costs.
‘Healthcare, employee benefits, employee wages, electrical, gas, everything to operate the system has increased and we have not raised our rates,? she said.
Richardson said many factors are involved in the possible increase. One of the biggest is the DPW, paying back $18,625,000 in bonds borrowed for water improvement, from 2004-2006.
‘When arsenic ruling came in and lowered arsenic standards, some of our areas had arsenic, so we added iron and arsenic remover to our systems, water mains, and new water tower on Sashabaw road, as part of our improvements,? she said.
The combined total for both water and sewer fund balances is $6,157,163. Though it may sound like a lot, Richardson said it is recommended they have 12-18 months of operating costs in reserve.
‘We would need $8.2 million in cash reserves,? she said.
When asked whether or not $2.7 million borrowed by the township for the new Independence Hall last year played a factor, Richardson wouldn’t say, but Supervisor Dave Wagner said the money borrowed has ‘absolutely nothing to do with it.?
‘That $2.7 million has no bearing on anything because that’s still in her account, that’s a loan she’s being paid back, as far as accounting purposes go it’s there. We need the 25 percent just because we’re that far behind,? he said.
Trustee David Lohmeier he is ready to put ‘the ugly truth on the table.? He said if the balance is low because the township borrowed from it, there are other ways to pay it back through accelerated payments.
‘I don’t think the average taxpayer believed we were going to fund the town hall on the backs of the folks paying for water and sewer because frankly it’s not everybody in the township and it’s hardly fair. I think the thought was, there was extra money in there that wasn’t being used that they could borrow,? he said. ‘If we’re at the point that’s not true and their wasn’t extra money and we have to have a rate increase I am not a fan of making a small group of people in our township pay for something that was to benefit everybody.?
Trustee Mark Petterson said, he doesn’t want to see an increase because he knows the pressures that are currently facing residents.
‘The residents are having it pretty tough right now as it is, but the prices of everything are going to start going up and where we start curtailing all of this. We have to pay Detroit and all these other people that we’re involved with the water and sewer rates,? Petterson said. ‘As to the $2.7 million borrowed by township I don’t know how much, if at all it’s affecting the need for an increase.?
Trustee Larry Rosso said he knows the auditors and Oakland County are insisting on an increase.
‘But as to the amount I have to have more information as to how much of the amount is really negotiable, I know it will be upward,? he said. ‘It’s really out of our hands to a large extent, but I have to see what the parameters are.?
Richardson said it depends on where the board’s ‘comfort level? is on how much water and sewer have in cash reserves and how quickly they want to bring it up to where it should be.
‘The 25 percent is the worst case scenario to get the cash reserves up to where it actually should be,? she said. ‘It could be where they only want six months, but I need at least a year of operating, which is $4.2 million.?
A water and sewer workshop will be held at Township Hall on May 20 at 6 p.m.