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Cuts, revenue fixes for sewer deficit

December 04, 2013 - A $2.3 million sewer and water budget deficit was reduced to $1.5 million, according to Township Supervisor Pat Kittle.

Kittle said the deficit was not acceptable.

"We will just chew through our working capital and we will be broke from a fund balance perspective by the year 2017 or 2018," he said.

Kittle said regularly scheduled maintenance cannot be deferred.

"There will have to be some rate increases on the sewer side," he said.

During an Independence Township public hearing on Nov. 12, Kittle assured the public the $2.5 million deficit would be reduced when some numbers were rearranged.

"The ending fund balance is going to look a lot better," he said.

A presentation at the Board of Trustee meeting regarding revisions to the 2014 water and sewer budget was presented to the board of trustees, Nov. 20, by budget analyst Rick Yeager.

Yeager said revisions to the water fund since the public hearing include new usage rates based on information from a 2013 actual activity report.

The water capital charge also increased due to a Comfort Inn project on Sashabaw Road, which will bring more revenue into the fund. About $87,210 in revenues for tap-in costs will be added, he said.

The budget for scheduled improvements was reduced by $125,000, and some renovations were moved into the 2015 budget.

Water usage rates were decreased by $175,000, which also help reduced costs in the budget.

Increases to the budget including $2,500 added to the $70,000 for a project on W. Church Street.

All the figures were presented without rate changes to residents.

"The good news with the water is there is still a half million contribution to the fund balance in 2014," Said Kittle.

Officials and Yeager also reviewed the sewer budget.

"There were some obvious things that we needed to make changes on," said Yeager.

Adjustments to the sewer budget also included some repairs and maintenance as well as a pipe relining project savings of $500,000.

Also, saving some money from the budget deficit was not spending $200,000 on a sewer Jet Vac truck. Rather than spending money on a new vehicle, officials opted to instead refurbish an existing vehicle at a cost of $50,000.

The sewer fund "is the one that's scary," said Kittle, adding the board has been discussing the sewer fund for the past year and the funding model is broken.

Trustee David Lohmeier said Detroit sewer and water rates continuously increase 10-12 percent every year. Those costs are ultimately passed on to residents and homeowners.

Lohmeier also said he has always been concerned an unforeseen problem could arise in the system and lead to unexpected costs that's why maintenance is an important cost that cannot be delayed in the budget.

Kittle said although capital costs are reduced, the 120 miles of pipe in the ground still needs preventative maintenance work to insure sewage does not seep into the ground or into the water.

Any type of leak would lead to increased rates in the sewer and water usage, then into rates, he said.

Detroit water and sewer system serves Detroit as well as communities in Oakland, Wayne, Macomb, St. Clair, Lapeer, Genesee, Washtenaw and Monroe counties. Over 127 counties are served by the system, and 40 percent of the population in Michigan.

Water to serve the communities is drawn into the system out of the Great Lakes

Staff writer covering Independence Township and Clarkston area.
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