Source: Sherman Publications

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Increases coming for water and sewer rates

by Trevor Keiser

March 14, 2012

Independence Township residents will pay more for water and sewer this year.

Township Board approved a 3.6 percent increase in sewer rates and a 5 percent in water rates on a 4-0 vote, March 6. Trustees Larry Rosso and Mark Petterson, and Supervisor David Wagner were absent.

The 3.6 percent equates to $2.79 per REU (Residential Equivalent Unit) increase quarterly or $11.12 per REU yearly. Sewer rates are currently $77.21 quarterly or $308.84 yearly. The new rates will be $79.99 quarterly and $319.96

Water rate payers currently pay $1.89 per 100 cubic feet of water the five percent increase equates to 9 cents. The new rate is $1.98 per 100 cubic feet of water.

"We budgeted in 2012 five percent increase in water and four percent increase in sewer," said Linda Richardson, director of Independence Township Department of Pubic Works.

Trustee David Lohmeier said the board spent a lot of time working with Richardson, Finance Director Susan Hendricks and Budget Analyst Rick Yeager to walk through expectations over the coming years.

"I would expect over the next few years, based on what we looked at, there will be increases on a regular basis," Lohmeier said. "But I think we got a good plan to keep them in a modest tempered level and actually eating into our fund balances a bit over the next couple years in order to start building them up on a smooth basis rather than try to fix for all the sins of the past all at once."

Audience member and City of the Village of Clarkston resident Cory Johnston asked why the increase was happening when there is no inflation and people's pay is staying the same and home values are dropping.

Trustee Neil Wallace said part of the increase was due to past boards skipping rate increases "particularly in election years."

"They could do that in part because they relied on the growth of this community and the tap in fees that resulted," he said. "They used, what I believe, should have been capital money because you're buying into the system like joining a club."

Wallace also said it had to do with "deferred maintenance."

"We actually have a formula Plante & Moran (township auditors) developed for us that consists of how much money we need to put into operations, our maintenance, and to have on hand for emergencies," added Wallace. "It's a real straight formula; we're just following it now."

Wallace also noted the $2.7 million the prior board borrowed from water and sewer to pay for the current township hall. However, Lohmeier said the board had made a "conscience effort" to offset that added cost internally without it being a burden on rate payers.

"We are affected by inflation because we have labor cost and personnel costs burden by these," he said. "To a greater degree we're also burdened by how much maintenance needs to be done on the infrastructure, how much improvement needs to be done and how much have been deferred in the past, that's just as important in this factor as just pure inflation."

Richardson noted part of the increases are due to increases received from the City of Detroit and Oakland County to discharge for sewer. The rate was raised 7.2 percent last year and 10 percent the year before. She said the 10 percent was never passed along to the locals. Nor did they raise the rates in 2006 to cover the $22 million in bonds for water improvements, she said.

"We're still trying to pay $1.2 million in bond payments, we don't have the revenue coming in, and so it's coming out of the reserves of the water," added Richardson. "We're just trying to level everything out and get to where we should be."

Sewer currently has 5.2 million in reserves and water has $$685,000. The new rates will go into effect March 15.