Proposed City Budget Will Include Water, Sewer Hikes

Rate hikes for water, sewer and refuse removal will be a part of a proposed 2011-12 fiscal year budget that the Northville City Council will discuss tonight.

Sandi Wiktorowski, finance director for the city, said higher costs implemented by other governments are the main reason for the increases. Northville is not in a deficit, as many municipalities are.

“We’re going to have to pass some of the increases along, but we will be able to absorb some of the increases,” Wiktorowski said. The city’s water and sewer fund balance is about $2 million.

Water rates have not been increased since 2005, Wiktorowski said. The city of Detroit raised rates for its municipal customers by 10.6 percent, and Northville will increase rates to its customers by 7.1 percent to ensure the financial viability of the city’s fund. Wayne County also increased sewer rates by 13.9 percent, 8.7 percent of which will be passed along to Northville customers.

Garbage rates will also increase from $27.74 to $29.04. All of the increases will become effective July 1, providing the commission approves the overall budget by a majority vote this month.

Wiktorowski said the public will have a chance to voice its opinion about the increase during public hearings.

Budget process difficult

Getting to the point where major cuts in services and personnel are not required has been a years-long process, said City Manager Patrick Sullivan.

“We saw this situation a long time before it actually happened,” he said. “We started to take steps to save money—especially on legacy costs—many years ago.”

One of those steps was to change the city’s retirement plan from a defined benefit pension program to a defined contribution 401(k) for employees hired after 1996. Additionally, several positions have been pared.

Initially, city officials expected to see a shortfall of about $422,000 for its $17 million budget for 2012. When the Oakland County executive’s office later predicted a 12 percent drop in property values, the shortfall estimate rose to $846,000.

But Northville’s property values decreased by only about 1 percent, according to Wiktorowski, which helped stave off a deficit. Also helping was about $230,000 from the city of Plymouth for fire services and $180,000 in cellphone tower revenues.

Also, the city will increase its millage rate slightly from 13.3 mills to 13.42 mills — within the limits of the Headlee provisions — to make up for the 0.96 percentage drop in the city’s taxable value.

“We will continue to explore cost-containment measures," Wiktorowski said.