Macomb trustees raise water rates, approve budget

MACOMB TOWNSHIP — It was a finance-heavy session of the Macomb Township Board of Trustees on June 14 as water rates, budgets and other projects were handed by trustees.

For the first time in three years, the township’s water rates went up, with nearly $3 increases to the water and sewer service charges. The water charge goes up exactly $3 from $16 to $19, while the sewer service charge goes even higher from $14 to $17.75 on July 1. The water and sewer commodity charges received increases as well, though they will not reach their maximum planned cost until 2024. The water commodity charge will go up from $4.40 per unit to $4.47 on July 1, 2023, and to $4.65 on July 1, 2024, while at the same time, the sewer commodity charge will increase from $4.18 to $4.25, and then to $4.49.

“It is painful for us to approve any rate increases,” Macomb Township Treasurer Leon Drolet said.

The increases did not come from nowhere. Utility Financial Solutions, LLC presented a study on the township’s water and sewer finances at the meeting, outlining that the current rate of revenue collection would not sustain the system into the future even with a $26.4 million and $5.4 million bond issues scheduled for 2025 and 2028, respectively. The rates also have to sustain a series of capital improvement projects that will cost the township over $27 million with the largest cost being a projected $10.2 million for 2024.

“To put all of this in perspective, I believe we have over $100 million in assets just in pipe in the ground,” Macomb Township Supervisor Frank Viviano said as a question to Department of Public Works Director Kevin Johnson. “And that’s at cost basis at costs over the last 30 to 40 years. If we were to replace all of that today in today’s dollars, you’re probably talking $1 billion in assets in the ground.”

While the township was able to operate at the old rates for three years, UFS vice president Dawn Lund told the board they’re not the only ones increasing their rates.

“These are low rate increases that I am seeing,” Lund said. “Most systems are going through rate increases. (In) the state of Michigan, you are required to put together an asset management plan. Asset management plans, of course, came in much higher than what systems expected. … This is not unusual at all. In fact, if anything, it’s unusual that you’re able to enjoy low rate increases.”

Even if the hikes are lower than the average community’s rate increases, trustees did not approve the increases without putting in some safeguards. Plans to have in-house rate reviews were included in the motion to allow for analyzing and adjusting rates.

 

2023-24 budget and millages
Township trustees passed the 2023-24 fiscal year general appropriations act, setting the township’s budget for the fiscal year beginning July 1.

Between revenues and expenditures, the various funds are expected to have around the following amounts:

• General Operating: $23.6 million

• Fire Operations: $10.1 million

• Parks and Recreation: $8.4 million

• Parks and Recreation Revolving: $674 thousand

• Law Enforcement: $448 thousand

• Fire Improvement: $1.4 million

• Municipal Roadway: $9.4 million

• Public Improvement: $600 thousand

• Opioid Settlement: $28 thousand

• Fire Pension: $340 thousand

• Retiree Health Care: $1.5 million

• Water and Sewer: $38.6 million

Millage rates for the coming fiscal year were set, measured in mills:

• General Operating: 0.6258

• Fire Operating: 1.9000

• Fire Pension: 0.0625

• Police Protection: 1.5000

• Parks & Recreation: 0.7500

No Headlee Overrides affected millage rates, keeping the rates as they were in FY 2022-2023.