February 20, 2013 - When Independence Township Public Works Director Linda Richardson came before Clarkston City Council on February 11, she didn't have good news. In April, the DPW will charge the city more for sewer.
Starting in April, the city's rate will be $113.52 per Residential Equivalency Unit (REU) each quarter based on Independence Township's 2013 sewer budget. The new rate will cost the city $223,186.14 for the year.
The sewer rates have changed because the City will be billed differently in 2013. In 2011, the city was charged $110.28 per REU quarterly, a rate based on their percent of flow into the Clinton Oakland disposal system. However, in 2012, the DPW began charging the city $88.67 based on the township's sewer budget instead of flow. This year's rate is based on the sewer budget too.
Residents in the City are currently charged $97 per quarter, a rate that was increased from $57 in 2009 because of retroactive payments totaling $90,775 owed to the township. While the city's debt was repaid in October 2010, rates were not returned to the $57, and a reduction is unlikely.
In fact, City Manager Dennis Ritter thinks residents will pay even more for sewer once the city is charged the new rate in April.
"There's going to be an increase; we are still developing the exact costs per quarter," Ritter said. The City Council made no official decision about what their citizens' would be charged for sewer at the meeting on Feb. 11.
The township residents pay a lower rate because of the additional revenue from new connections into the system. On the other hand, the city's system is built out, so no additional sewer revenues are generated.
In 2012, the township's residents were charged $80 per REU per quarter, with a projected $604,214 loss of revenue, which was covered by the sewer's cash reserves. In Oct. 2012, the board voted to raise the 2013 rates, and the new $83.25 charge took effect on Jan. 16. The sewer fund will be subsidizing approximately $1,813,304 in 2013.
Although township citizens currently pay less than those who live in the city, they will likely be charged more for sewer too.
Richardson anticipates coming before the board to discuss higher sewer rates toward the end of 2013. "I will be requesting a professional rate study this year, so the rates will hinge upon the results of the study," she said.
These regular increases are due in part because of necessary repairs to the sewer system.
"We're trying to keep our costs down as much as we can, but we have an aging system," said Richardson. Additionally, the City of Detroit continues to raise its rates for sewage disposal, new equipment is needed, and sewer relining has to be done. Sewer funds are also being used to pay down three sewer improvement bonds for the Oakland/Macomb Interceptor.
With the exception of healthcare, the Public Works' payroll costs have not increased because employees haven't seen a pay raise since 2009, Richardson added.
"We're trying to not increase our manpower as we are trying to utilize the work force as efficiently as possible and work smarter, not just harder," she said.
To soften the township's increases, the DPW has been drawing down on their cash reserves, "but you can only do that for so long," said Richardson.
The City Council's next meeting will be on Feb. 25 at 7 p.m. at the Village Hall on Depot Road. Contact Public Works Director Linda Richardson at 248-625-8222 for more information.
Clarkston News reporter