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Posted: 01/22/14

Audit spurs rate study
for Romeo utilities

Observer Staff Writer
      The 2013 audit for the Village of Romeo revealed more work to be done to create self-sustaining water and sewer funds.
       A favorable unmodified or "clean" audit report was presented to the Board of Trustees on Jan. 13 by Paul Bailey of Stewart, Beauvais and Whipple. However, the report did shine a light on the village's struggling utility funds.
       The wastewater operations show an operating revenue of $1.2 million, but operating expenses of $1.4 million. The water supply system saw similar problems with $704,623 in revenue and $780,481 in expenses.
       Of the village's $411,984 general fund balance, $269,817 was non-spendable due to advances to the wastewater fund and water supply system fund.
       "Because you've advanced money to your water and sewer fund of $269,817 you can't spend it again in the short-term," he said. "Eventually it's going to come back, you're going to pay yourself back."
       Bailey said the net income for the wastewater enterprise fund was a negative $18,265. Utility rate changes last year improved the fund, but Stewart, Beauvais and Whipple is going to work with the village on industrial rate changes.
       Village Clerk Marian McLaughlin said the general fund is paying for half of the bond issue for wastewater, and is still subsidizing the water fund.
       "Fortunately for us, this will be our last year for our bond on the water," she said Jan. 16. "We transfer $200,000 into the sewer fund, so that is why we're going to do an evaluation of water and wastewater."
       In a similar vein, the village may charge Bruce Township more to use its wastewater treatment plant. Bailey said the village should consider raising what it charges, which is currently $20,000 a quarter with a "catch up" bill at the end of the year.
       "That is no where near what it costs on an annual basis," he said. "The annual costs are $213,000."
       McLaughlin said the village is working with Bruce officials to raise the quarterly payment so the catch up bill isn't as large.
       The audit shows the water supply system's value at $5.3 million, but the actual money the village can spend is $136,280. Similarly, wastewater has a net value of $5.8 million but has $74,545 in available funds.
       Overall business-type activities in the village, which are water supply and wastewater, brought in $1.9 million in revenue, up from $1.6 million in 2012. Expenses, though, were at $2.2 million.
       Governmental operations
       The audit reported revenue for 2013 at $3.2 million for governmental activities, down from $3.3 million in 2012. A total of $2.2 million, or 70 percent of the 2013 revenue, was made up of property taxes, while state shared revenue was $337,273.
       For governmental activity expenses, the village spent $3.6 million. Of that total, $1.7 percent<nearly half<was spent on public safety, followed by $1 million in public works. A total of $779,560 was spent on general government, which is aspects like the village clerk, administrator and treasurer.
       Overall, the general fund spent $177,341 more than it took in for the year ending on June 30, 2013.
       The village's municipal street fund had $113,165 in revenue, but $133,165 in expenditures for $20,098 in expenses over revenue. A transfer from the general fund covered the difference.
       The village's cable fund brought in $89,297 and spent $76,112 for WBRW's services. The cable fund transferred $72,802 into the general fund for a Board of Review adjustment.
       The major street fund had a balance of $520,695, local street had $2,783 and the cemetery fund ended with $155,639.

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