by ANDREW NEAL
Tuesday’s Shelby Township Board of Trustees meeting featured a presentation on the township’s annual water and sewer rate increases. This year’s water rate increase is 1.73% and 7.5% for sanitary sewer.
Department of Public Works Director Dave Miller presented the board with some context for this year’s increases, noting that the township uses a True Cost of Service Rate methodology to determine the water and sewer rates.
“We take the expenses, we offset the expenses by other revenue such as interest income, capital charges, front footage – that’ll give us our revenue requirement. We will divide that by the amount of anticipated, billable units which will give us our rate,” Miller said.
It was also noted that while Great Lakes Water Authority (GLWA) costs have increased over the years, township operating expenses have plateaued, even decreased slightly.
“Since 2011, the water costs have gone up 51%, the operating costs of the department have decreased 5%,” Miller said.
“What’s driving the increase in water rates is not your department,” Supervisor Stathakis interjected to clarify. “What’s driving that is Detroit water costs, pure and simple.”
Miller also presented an interesting slide, comparing Shelby’s rates with surrounding communities. Rochester Hills, Washington Township, and Clinton Township residents all pay several hundred dollars more per year on average, while Macomb Township and Chesterfield Township residents pay slightly less.
“We’re not the lowest. We get charged quite a bit by Great Lakes Water Authority… We’re right in the middle, I think we’ve got a very comparable rate,” Miller said.
There is a substantial water and sewer reserve, about $44.4 million. Miller broke down the total, explaining that $12 million of that is a loan for the police and fire pension, just under $9 million is funding for the 34-S special assessment district, and about $2 million goes towards paying off the DPW building bond. Roughly $4 million is a 5-year principal payment on debt for the Oakland and Macomb county interceptor districts.
“By leveraging this money that we have in our reserve, for 2018 alone we’re looking at generating $300,000 in interest income and the elimination of interest expense to offset the rates,” Miller said.
“And when people ask us how we will cut expense, that is a great example,” the supervisor added.
The board then approved the water and sewer rate increases as presented.