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Posted: 04/30/14

Village Board of Trustees
hike up water and sewer rates

by CHRIS GRAY
Observer Staff Writer
      Water and sewer rates will increase for Village of Romeo customers this summer.
       The Village Board of Trustees voted 5-1 for increasing utility rates, raising the average bill to $95.50. Trustee Christine Malzahn cast the dissenting vote at the April 21 meeting. Trustee Russell Rinke was not present.
       The rate changes went into effect following the vote, and will appear in the late summer billing period.
       The board asked Stewart, Beauvais and Whipple to examine the village's water and sewer rates so those funds can become self-sustaining. The village currently subsidizes the funds with the general fund.
       The water fund is expected to be short $31,000 by the end of the 2014 budget year, while the sewer fund is expected to see a loss of $25,000.
       Paul Bailey, CPA principal at Stewart, Beauvais and Whipple, said the changes mean the average user will see at minimum an increase from $88 to $95.50 per quarter.
       For those on the well system, this calculates to a $0.25 per 1,000 gallon increase for a total of $3.25 per 1,000 gallons. With the $0.25 increase, a profit of $20,000 is projected to help make up for this year's shortfall.
       Those on the Detroit Water and Sewerage system will see an increase of $1.17 per 1,000 gallons. Bailey said Detroit's rate structure also charges a flat rate, the latter going up to $8,153 per month. A total charge of $5.15 will cover Detroit's fees.
       "If your volume decreases, you still have got to pay that flat charge," Bailey said.
       Bailey said the village's refinancing of its 2004 sewer bond played a role in the sewer rates, as it will save an average of $27,000 a year until 2028.
       He said the village will use a two-tier increase for its sewer rates thanks to the refinance. The suggestion was $0.50 for the first 10,000 gallons and $0.40 for all users over 10,000 gallons.
       "The rates will also need to be increased by $0.30 next year," he said.
       The board requested the calculations show what increase would be necessary if they were only made to customers with more than 10,000 gallons. Bailey said instead of $0.40, it would have to go to $0.90.
       "I would suggest that you increase it to all users," he said. "You've got about 50 percent of your usage in the first 10,000 gallons."
       With the $0.50 increase, the village can expect a profit of $35,000 in its sewer fund.


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