By Chris Hagan
Review Staff Writer
On Monday, amid many village resident’s concerns and frustrations, the Lake Orion Village Council voted to postpone a water and sewer rate increase that aimed at doubling current rates.
The rate increase proposal was to gradually increase the water rate from $2.60 starting Jan. 1, 2016 to $3.43 in 2018. Sewer rates see a larger spike as it would jump nearly 50% in 2016 to $3.03 all the way up to $4.90 in 2018. On average, a family of four will go from paying $180.93 a quarter for water and sewer to $394.13.
According to Village Manager Darwin McClary, doing nothing will result in a fund deficit but even approving the rates would not solve the issues with the water and sewer fund operating at a loss.
The water and sewer systems have been operating at a loss for several years and those operating losses are growing. In 2011, they had operating losses of $21,000. In 2012 those losses jumped to $75,000 and again to $86,000 in 2013. Losses continually started growing at faster rate as it jumped significantly in 2014 to an operating loss of $242,000 and just this year the Village had a loss of $328,000.
A resident on Fairview who attended the meeting questioned why there was such a dramatic increase between 2013 and the $156,000 loss increase to 2014.
McClary offered his thoughts but still wasn’t sure what was causing the dramatic increase in losses.
‘I wish I had an answer but I don’t. I think the increase in operation cost we’ve seen which are the purchase costs are significant. McClary replied. ‘Also the amount of water we’ve been selling to customers have been dropping because more people are become more efficient in water use.?
The village is purchasing 11.3 percent more water than what it’s selling to their customers and the village pays for more 46 percent more sewage outflows that what it charges to the customers.
These amounts were calculated following a village audit and Council President Ken VanPortfliet was taken off guard following the auditors presentation.
‘This is the first time that I have heard anything about the deficiencies in funding in regards to the water and sewer fund,? VanPortfliet said. ‘I would’ve thought that would’ve been pulled out, that big of a discrepancy of $160,000.?
As it stands now, the village administration does not know where the issues resides with either the water or sewer system deficiencies. Former village DPW director John Ranville said at the meeting he believes the water main issue is due to a closed valve somewhere in the system while McClary believes it to be a calcified pipe somewhere in the system. The village is in the middle of a water reliability study to determine those deficiencies.
Don Connery who lives on Central voiced his concern that he didn’t want any rate adjustment to be decided before knowing exactly where the deficiencies reside.
‘We don’t know where were these losses are coming from so before we set rates tonight shouldn’t we have that study in hand and find out what the costs are and where the expenses are?? Connery said.
Another aspect that has residents upset is the loan given to the DDA. The DDA receive a $1.2 million loan from the Village to finish the streetscape in downtown. That $1.2 million was taken from the water and sewer with a payback amount timeline of 10 years with two percent interest.
Currently, the debt the village has is greater than two percent they have coming in but it was the village’s intention to pay down the sewer debt with the returned $1.2 million.
Following public hearing at the meeting, the Village council voted to postpone the rate adjustment until their first meeting of 2016.