An intergovernmental sewer agreement is close, but a $52,000 sticking point may jam up the works.
Clarkston City Council voted May 5 to approve First Amendment reading, but added several changes to the draft document. Two changes are ‘problematic,? said Township Attorney Steve Joppich.
Joppich said the city did not include the proposed clarification that Clarkston would be charged at a rate ‘equal to the amount paid by sewer-only users in Independence for system operation and maintenance.?
‘This seemingly simple term is significant because, due to recent changes in how the county calculates its charges to the township, it is anticipated that most of the township sewer customers will have their rates determined on a flow basis in the future, as opposed to an REU basis (Residential Equivalency Unit),? he said in his report to the board. ‘Only the township’s sewer-only customers will remain on an REU basis for rate determinations and billings.?
Joppich said the majority of the city’s water and sewer customers are not billed by the township, so it is impossible for the township to charge the city on a flow basis, which is why the city will be charged on an REU basis.
For budget reasons, the city asked the township if they could spread their retroactive payments dating back to July 2007 into 10 quarterly payments of $19.92. The township agreed, but said the payments would include an interest payment to the township. However, Joppich said the draft voted on by City Council ‘removed the interest and other payment provisions.?
‘In my world, if someone is to defer making a payment, they pay interest,? said Trustee Neil Wallace. ‘It doesn’t seem to me to be anymore complicated than that.?
Supervisor Dave Wagner felt they needed to charge the city something.
‘We’re all in the same boat,? he said.
Joppich suggested five percent, but said the board could adjust if they thought appropriate.
‘I think five percent is more than reasonable,? said Treasurer Curt Carson. ‘If we were to borrow the money, we’d be paying more than that.?
Wallace agreed.
‘It’s in line with book savings numbers,? he said. ‘If you go back and look at the average over 40 years it comes in just under five percent, so it’s a pretty reasonable number.?
The township and the city first made a sewer maintenance agreement in 1981, since then the city had been paying $4.52 per quarter, while township resident’s rates have increased almost yearly.
Trustee Mark Petterson asked Linda Richardson, DPW director, if it was safe to say the township lost close to $200,000 over the past 20 years based on a one-REU calculation.
‘It’s hard to calculate because rates have increased,? Richardson said. ‘I can tell you since 2007 the retroactive they currently owe over $52,000.?
The board voted unanimously to direct Joppich to continue negotiations with the city and add the ‘sewer-only? language along with the retroactive payments to be paid at an interest rate of five percent.
The city council has not reviewed the amended document yet.
‘Once we receive their formal reply to the action they took, we’ll analyze it and see if it’s something we can live with or not,? said Clarkston City Manager Dennis Ritter. ‘We’ll have Gary Tressel from HRC help do the analysis.?