October 24, 2012 - How much are Oxford Township officials willing to pay to send sewage to Pontiac?
The answer seems to be under $2 million.
Officials voted 6-0 at their Oct. 10 meeting to recommend a funding formula that could ultimately result in the township paying 3.65 percent (or $1.6 million) of an estimated $43.7 million cost to hook up the Clinton-Oakland Sewage Disposal System (COSDS) to a wastewater treatment plant in Pontiac.
The board's vote is only a recommendation because ultimately, the final decision on how the 12 townships, villages and cities in Oakland County that makeup the COSDS will fund the project is going to be made by one person – Oakland County Water Resources Commissioner (WRC) John P. McCulloch, assuming he wins re-election on Nov. 6.
There is no opt-out for any of the 12 communities. "One way or another, we're going to pay," said township Supervisor Bill Dunn.
Pontiac's wastewater treatment plant is now owned and managed by the WRC Office.
Plans are to eventually send 30 percent of the total sewage flow from the COSDS to the Pontiac plant. Right now, 100 percent of the flow heads to the Detroit plant.
In order to divert 30 percent of the flow, the WRC Office is planning to construct a 36-inch sewer diversion line and a pump station on Perry St. leading to Pontiac's plant. This will cost an estimated $24.4 million.
This diversion line will also require a sanitary sewage storage tank with an estimated price tag of $19.3 million. It would be built at the Elizabeth Lake Pump Station.
In reality, the only COSDS communities that would see their sewage flow to Pontiac would be Waterford, West Bloomfield and Independence townships.
However, all 12 Clinton-Oakland communities will be required to contribute to this project for two reasons.
One, projections show it's more cost-effective in the long run to send this sewage to Pontiac as opposed to Detroit. It's estimated doing this could save the Clinton-Oakland system about $25 million over 30 years.
Two, diverting 30 percent of the system's total sewage flow to Pontiac instead of Detroit could help lower their eventual financial contribution to a much larger and more costly project.
That other project involves an estimated $103.9 million in repairs to the Oakland-Macomb Interceptor (OMI), a pipeline through which all of the sanitary sewage from the COSDS and Macomb County currently flows to the Detroit treatment plant.
Right now, it appears the cost split for these repairs could be 60 percent paid by Macomb County and 40 percent paid by the Clinton-Oakland system.
However, the WRC Office is trying to broker a lower percentage for the Clinton-Oakland based on the argument that if 30 percent of the system's sewage is eventually going to be shipped to Pontiac for treatment, then they should pay less. How much each COSDS community could be expected to pay for their share of the OMI repairs has yet to be determined.
There was some debate amongst Oxford officials over how much of the cost for the Pontiac project the township should bear.
Township Treasurer Joe Ferrari indicated he favored a funding formula based on the current average flow, which is basically how much sewage the township is currently sending out. In numbers, that amounts to 1.81 cubic feet per second (cfs).
"I think you should pay for whatever you put into the system," he said.
However, Dunn pointed out that if the township did that, it would be paying 3.89 percent (or $1.7 million) of the Pontiac cost.
Ferrari later made a motion, which died due to a lack of support, to recommend the township pay based on funding formula that derived 50 percent of the cost from the current average flow and 50 percent from the increase in purchase capacity. This formula would result in the township paying 1.95 percent (or $852,150) of the Pontiac project cost.
The reason this percentage is so much lower is because the township's increase in purchase capacity is being calculated at zero.
Purchase capacity is basically the limit on how much sewage a community is allowed to put into the Clinton-Oakland system. The township's current purchase capacity is 6.73 cfs.
Township Engineer Jim Sharpe explained to the board that current purchase capacity is a "misleading term" because the township is not actually paying for 6.73 cfs; that's simply the amount of capacity that's been "set aside." The township's currently only paying for the 1.81 cfs it sends to Detroit.
Based on population growth projections up to the year 2050, it's been decided that township doesn't need a purchase capacity of 6.73 cfs, so the future purchase capacity has been reduced 5.62 cfs.
That's why the increase in purchase capacity was set at zero in the funding formula that Ferrari attempted to have a vote on.
Township officials seem to believe the reduced future purchase capacity is more than enough because even if the community tripled the amount of sewage it sends, it would still not equal 5.62 cfs.
Dunn pointed out that's enough capacity to take care of the township's existing sewer district, which is nowhere near built out, and then some. Right now, the township sends out nearly 3,500 sewer bills for a system that serves an estimated 8,224 actual users.
Township Trustee Mike Spisz is the one who made the motion for the board to recommend a funding formula that derived 50 percent of the cost from future purchase capacity (i.e. 5.62 cfs) and 50 percent from the current average flow (1.81 cfs). This would result in the township paying 3.65 percent (or $1.6 million) of the $43.7 million cost for the Pontiac project.
Sharpe believes it's better for the township to pay based on a formula that utilizes future purchase capacity (5.62 cfs) as opposed to current purchase capacity (6.73 cfs).
"The more purchase capacity you have, the more you're going to pay," he told this reporter. "If we're never going to get to the 6.7 (cfs), why do we want to pay on 6.7? Let's pay down at the 5.6 (cfs)."
Spisz believed this 50-50 formula to be fair.
"I think we should be fair about it as much as we can," he said.
"I'd rather go for the lowest cost to our residents," noted Ferrari.
Sharpe was asked for his opinion as to which funding formula he would choose.
As a township resident himself, Sharpe indicated he's with Ferrari. "Let's pay as little as possible," he said. But as a professional engineer, Sharpe said he must be fair and the formula proposed by Spisz seemed fair to him.
"It's a good compromise between the purchase capacity and what people are actually using," Sharpe later told this reporter.
Ultimately, the board unanimously approved the formula proposed by Spisz.
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.