By BOB OLIVER
HEIGHTS – The cost of water is going up after a proposal to raise water taxes by 7 percent was approved 5-2 by the City Council during its Dec. 10 meeting, the last of 2013.
The vote came after the council heard from Plante Moran Partner Martin Olejnik, who audits the city’s finances, who stated that the hike is due to a variety of reasons, including increases in rates from Wayne County and the Detroit Water and Sewerage Department.
The city’s water department budget, which is separate from the city’s general fund, had a $5.6 million fund balance at the beginning of the fiscal year on July 1, but that is expected to drop to $3.3 million by June 30 due to money being pulled from the account for other expenses so the city can keep its finances balanced.
City Comptroller Vince Macari said the decline in the fund balance is a concern because the city has frequently borrowed from the water fund over the last few years to balance the books, though the money is always put back into the fund with interest.
The total revenues and expenses for the 2013-14 fiscal year are budgeted for roughly $23.5 million, which is $2.5 million less than last year.
Obejnik said the increase was projected to be even higher initially.
“Last year, we would have anticipated an 8 percent increase every single year for a five-year period in order to get to a target cash balance, but because of some changes only a 7 percent increase is now expected,” Obejnik said.
Obejnik said two changes that allowed the city to shave off the 1 percent in additional tax were $200,000 saved in concrete work and lower than expected fringe benefits for the year.
Councilman Thomas Berry, who along with outgoing Councilwoman Janet Badalow voted against the budget, asked Obejnik why Detroit and Wayne County raised the cost of water, which in turn affected the rates in Dearborn Heights.
“I would like to know where the city of Detroit has experienced its increases to pass it along to us, because we’ve had no changes in our infrastructure,” Berry said. “What has increased for them that prompted them to increase the water rates to our city?”
The hike will increase the average residential water bill in the city by about $14 every two months, or approximately $84 a year, and will begin in the next couple weeks.
(Bob Oliver can be reached at [email protected])