Even if village officials decide not to overhaul their water/sewer rate structures, their financial advisor has recommended they raise rates at least for the next five years.
Robert Bendzinski predicted Lake Orion would have unknown amount increases in Detroit water and sewer rates over that time period
He made that prediction in a recently completed village water/sewer study that was presented to village council members on July 28.
The study included two scenarios for rate restructuring.
Currently the village has 1,383 metered water customers and 1,165 sewer customers. Water is purchased from Orion Township. Sewage disposal is bought from Oakland County.
Bendzinski said the village’s water system was well-managed. ‘You’re billing for virtually all the water you purchased. There’s minimal leaks. Historically you’ve kept rates current and effective.?
According to the study, the village has purchased an average 130 million gallons of water per year. That amount has stayed steady over a five year period. However, the cost per 1,000 cubic feet has increased over 33 percent in the same time period.
Village residents are charged $28.25 quarterly for 1,000 cubic feet of water and $2.85 per 100 cubic feet in excess of 1,000 cubic feet. They’re billed $51.86 per 2,000 cubic feet quarterly for sewer usage and $1.57 per 100 cubic feet in excess of 2,000 cubic feet.
One cubic feet equals about seven and one half gallons of water.
Because the village has various size meters (from 5/8 inch to four inch), Bendzinski suggested all the various meter sizes be converted to a common denominator. Sewer customers would also be converted in the same manner.
He recommended using the Williams and Works equivalents, developed in the 1970s. He said the village’s existing equivalent ratios are significantly below those.
The study said any new village rate structure should include $160,000 annually to provide for further repairs and replacements to the system.
Bendzinski’s projections over the next five years included raising the cost of water by 10 percent, sewer by 5 percent.
The study’s first rate scenario for rate restructuring included no minimum consumption of water and sewer usage. According to Bendzinski, the village has quite a few customers who currently don’t meet minimum usage requirements, so their rates would more than likely decrease.
Customers with larger meters would have a greater cost burden.
The second rate scenario is not much different than what the village now uses except it includes a quarterly 1,000 cubic feet of water and 1,000 of sewer charges.
Bendzinski said no one knew why the village had a consumption difference between water and sewer.
He added that the study did not assume any increase in customers.