Local water rates not to increase in coming year

Dispatch services agreement renewal approved

By: Alex Szwarc | Macomb Township Chronicle | Published November 10, 2021

Shutterstock image

Advertisement

MACOMB TOWNSHIP — Macomb Township officials are pleased that, for the second consecutive year, water and sewer rates will remain the same.

Regarding a request to approve the 2021/2022 water and sewer rates, the Board of Trustees approved the 0% increase at its Oct. 27 meeting.

The projected rate adjustment for 2023 is 2.9%. A press release sent the morning after the meeting states that increases averaged 6.4% annually between 2015 and 2020.

Dawn Lund, vice president of Utility Financial Solutions, presented to the board a rundown of financial projections. She said the capital improvement program will start to materialize next year.

She discussed the projections, key targets that work together that guide rate adjustments and study findings.

The targets are debt coverage ratio, minimum cash reserves and operating income.

Lund said she wants the township to be above the minimum level, and if it’s approached, it means there might be a cash critical situation.

Regarding operating income, she indicated that, if the township is fully funding its operating income target, current water rate payers are paying their fair share.

Financially, Lund said without any rate increases, the operating income is projected to be positive currently in the water department. It would move to an operating loss by 2026.

“What helps balance the decision on meeting the operating income is cash balance,” she said. “I want you to hold a minimum of about $6 million in the water department.”

Lund notes the water department currently doesn’t have any debt.

“The reason we can forego an increase this year in both utilities is because, the last couple of years across the country, there has been delay in capital spending,” she said.

Also at the meeting, the board unanimously approved amending the water and sewer capital improvement program.

Gerry Wangelin, Macomb Township water and sewer superintendent, said the current program was approved last December.

“The amended plan reflects the COVID era and the environment we now live and work in,” he said. “There’s several projects in the amended plan that weren’t done at all.”

Wangelin said the projects were bid out with plenty of bids received. For one reason or another, like material and manpower, the projects weren’t done.”

He said the new plan goes hand-in-hand with the township’s water and sewer rates.

Supervisor Frank Viviano said because of cost overruns and increases, the township went back and had to amend prices on all the projects going forward.

“One reason we’re doing this is to get accurate budgeting over the next five years,” he said.

The capital improvement program cost about $45 million.

Trustee Peter Lucido III noted that the township is not increasing the program budget over the next five years — rather, it’s a slight decrease.

Trustee Frank Cusumano asked if there are any other mechanisms to fund growth payment — specifically, if there is a special assessment district for affected properties. Engineer Jim Van Tilfin said developers pay for utilities that serve their development.

“We’re trying to hit the budget number versus going with a straight number or lineal footage of pipe or number of manholes and getting a higher price for them,” he said. “The net to the water and sewer fund is the same as it was; we’re just not getting as much work done.”

Additionally, the board approved the law enforcement and emergency dispatch services agreement renewal with the Macomb County Sheriff’s Office. The agreement is up for renewal for 2022, 2023 and 2024.

Macomb Township is the largest Macomb County municipality that is contracted with the Sheriff’s Office.

 

Advertisement