What You Need to Know About Saline City Council's Discussion on Utility Rates

A confluence of factors led to sky-high utility bills that have some City of Saline ratepayers seeing red.

Here's what you need to know about the utility-bill discussion at Monday's City Council meeting.

Why The Bills Were So High

• There are several reasons. First, Saline City Council raised utility rates - especially on the sewer side - to being funding major investments in the city's wastewater treatment plant and collection system. The rates were recommended by Baker-Tilly, which conducted a rate study. 
• Secondly, the higher rates debuted during the summer billing season, when people water their lawns and gardens and fill swimming pools.The city asserts a dry summer caused even more usage than normal.
• Thirdly - and this is the news -  the city conducted meter reads in early May, even though the billing season shouldn't have begun until June 1. So billed for 20-22 days at the newer, higher rates.Why did the city bill early? There was no real answer given City Manager Colleen O'Toole said it appears the decision to read in May was made by the previous City Treasurer, Mickie Jo Bennett.

What's Being Done to Correct The Error?

• To make up for the overbilling caused by the early reading, O'Toole explained that City Treasurer Elle Colle is with BS&A to provide credits on the next bills. For most users, this amounts to $20 or $30, according to a memo from O'Toole to city council. 97 percent of the city users had the early reads and will receive this credit - without contacting the city.
• For residents who had leaks and other issues, council authorized the city manager to approve the issuance of one-time discretionary sewer credits for the recent billing period.
• The city previously extended the deadline for paying utility bills until Dec. 1 to allow city staff to investigate residents' concerns.

Council Questions & Comments

• Answering a question from Mayor Brian Marl, O'Toole said the city has contacted Baker-Tilly to refresh the rate study based on new information, including more details about the cost of the project and the interest rate for the loan. The loan is cheaper than the estimate used by Baker-Tilly, which lowers the cost and should slightly lower bills.
• Mayor Marl asked about potential grants for the wastewater treatment plant project. The city applied and did not receive an $18 million federal grant, Marl said. Marl said the city intended to apply again in 2023. Marl said the city has contacted Sen. Gary Peters' office about an EPA grant that would be worth $8-14 million. The deadline to apply for that grant is April of 2023. Marl said the city is applying for $7 million in funding from bulging state coffers. At Monday's meeting, council also passed a resolution seeking $1.5 million for a "high water infrastructure grant."
• Mayor Marl took issue with a public comment criticizing the city for not investing in the wastewater treatment plant over the years, noting the city invested in the plan in 2013, and then again a few years later for an odor abatement project, and then began looking at sites for improving the wastewater treatment plant in 2019 before electing to rehab in place. "These are highly complex systems that are heavily regulated and the investment of dollars and time is not something that can be done on a whim," Marl said. "If you look at our record over the past decade, it's pretty strong. I regret and acknowledge publicly, I wish that more attention was made in the 1990s when economic times were very good and we had robust fund balances. Unfortunately, I can't change yesterday. All we can do is move forward and I think we have a strong and aggressive plan to do that."
• Unless a resident has a special meter (that costs about $1,000 to install), the city assumes that all water goes into the wastewater treatment system. So if 1,000 gallons of water comes through your taps, you are charged 1,000 gallons for sewer. But in the summer, especially, this is not actually true, since so much water is used on lawns and gardens and soaked up by the soil. Councillor Dean Girbach asked if the city would consider a system like Ann Arbor's, where the summer sewer charge is an average of the other three billing periods. O'Toole said city ordinance established the use of the dedicated meter system. She said the estimation model isn't an exact science, but the meter system is. She said the city is looking at ways to bring down the cost of the dedicated meters. While O'Toole said she wasn't comfortable recommending a system based on estimates, both Girbach and Marl said they would like further study of the idea.
• Marl said he wanted to see further study of a two-tiered rates - echoing what Councillor Jim Dell'Orco said he favored months ago, when council considered the high rates. Marl said he wanted to see a system that gave some benefit to seniors, retirees, single parents, unemployed or economically struggling. Another qualification would be water usage. "If they are below a certain threshold the rate is different," Marl said. Baker-Tilly strongly recommended against a two-tiered plan when the rates were discussed earlier in the year, suggesting they could face legal challenges. Marl said he wanted the city's legal experts to assess the idea.
• The utility rate issue is one of the hottest issues the council has faced in years. Councillor Janet Dillon, along with Girbach, is facing a stiff challenge in the city election. Dillon said council did not know the meters were read early, saying she learned about it on social media. She said she will take ownership of voting for the rate increase - a vote made based on the rate study paid for by city government. Dillon said she'll wholeheartedly support every grant application the city makes, but said the city can't count on it. "Doing that is like waiting to win the lottery. We've seen already that we were not chosen on numerous occasions for grants. We can't just wait and see if we're going to get money. We have to be proactive and find a funding source and that comes through rate increases," Dillon said.
• Councillor Kevin Camero-Sulak asked if the city has enough data to determine whether or not the old meters were reading too low. O'Toole passed the question to DPW Director Larry Sirls, who changed the subject to water conservation and messaging on conservation. Camero-Sulak said he felt like there was still something missing from the equation, even with the extra 22 days of billing at a higher rate. "The number of people who have had bills double or triple is obviously very alarming," Camero-Sulak said. "I'm hoping we can provide the information that accounts for those massive changes." Sirls said the DPW would continue to look for and measure everything it could.
• Councillor Jim Dell'Orco told Sirls that one of the major selling features of the new meter system was that it would give users and the city the tools to see major increases in consumption and identify leaks before they become really expensive. "So I'm flabbergasted as to why these meters aren't doing this job," Dell'Orco said. "Why are we having to rely on the ratepayers to complain about their bill before the leaks are revealed." Sirls said the new dashboards are just being launched and the city has to do quality checks before it's made public. Like Camero-Sulak, Dell'Orco said he felt like there was something missing still. Dell'Orco said council has to answer to citizens why rates were higher than what was promised - the 34 percent increase or $81 per quarter. "That did not turn out to be the case, and that's what we have to figure out," Dell'Orco said.  Sirls said that for most residents, they were simply complaining that their bills were high. "As we went through and investigated, the majority of the complaints were that the rates were higher, and what they paid was much higher than it was the last cycle," Sirls said. O'Toole again pointed to the extra 22 days of billing, the dry summer, and the higher billing rates. O'Toole said Treasurer Cole is committed to ensuring the city never goes out of the 91-93 day billing cycle again. O'Toole said the meter change out may have contributed to unexpectedly high bills if the old meter was malfunctioning and not properly tracking water usage. 
• Dell'Orco said the city needed to figure out how to subsidize the cost of the irrigation meters or provide some kind of credit so people aren't being charged for water that never went into the sewer. "We need to figure that out," Dell'Orco said. Marl agreed and said he wanted to revisit the issue at the Nov. 7 meeting. "For me, it's a matter of equity and fairness," Marl said.
• If people believe they should qualify for the discretionary sewer credit they should contact O'Toole at 429-4907 ext. 2211 or cotoole@cityofsaline.org. For people who are experiencing higher than expected usage, contact the DPW from 7:30 a.m. to 3:30 p.m. weekdays at (734) 429-5624.

PUBLIC COMMENT

• Toby Crotty asked when the state first found a violation at the city's wastewater treatment plant and how many there have been since then. He asked if they resulted in financial burdens on the city. Crotty asked what the city plans for growth. "We're essentially Ann Arbor. When does it stop? When do we address how prepared we are with our infrastructure to accept this additional development?"
• Shelly Andrews said she new an increase was coming but said the city's increases seemed at odds with the goal of "easing in" the increases. She said asking residents to get a second meter for $1,000 is insulting. "I hope you listen to what we're saying and feeling and take this seriously," Andrews said. "We all want a new water plant, but you guys are killing us with this. This is not the way to do it."
• Scott Nelson said he was shocked when his bill went from $330 to $900 even though it's just he and his wife at home. "If something feels wrong, forget about the data, it's probably wrong. If I were in your shoes, I'd be worried about your credibility right now - a few of you, especially. How do you justify $300 to $900? What have you done? My water doesn't look any cleaner. So you guys better have an answer tonight."
• Sal Randazzo said Saline citizens give a greater share of their income to support Saline schools and city government. He said water and sewer rates were also above average for Southeast Michigan. "It's my belief that the Saline citizens have lost confidence in this council. We've been told for years that the putrid smells coming from the wastewater treatment plant were being addressed. The smell still persists all over the city. We were told that the brown water in our homes was being addressed by additional hydrant flushing. The brown water persists as evidenced by the picture posting on social media. The need to replace an aging wastewater treatment plant should have been evident at least a decade ago. The replacement of a critical part of our infrastructure was not planned for by this city council. This is inexcusable because there are at least two members with more than a decade on city council, and one has been an employee with firsthand oversight of the city for multiple decades." Randazzo called for accountability. He noted property values and the millage rate has increased. He noted that the city has sold land to private interests, which also adds to the tax base. He talked about new development revenue, tap-in fees and COVID relief. "Where is that extra money? Many residents feel as I do. The recent rate hike is an injustice," Randazzo said. He said the city should go to the county, state and federal government and beg for relief for the citizens.
• Mary Hess said she wanted more specific information about the interest rate change. She also said she hoped Mayor Marl could help spearhead the lobbying of federal and state officials by making names and addresses available to the public. 
• Nicole Rice said she felt like something was missing from the utility rate picture. She said she hoped the city would report an "after action" report to citizens explaining what went wrong. She suggested building communication plans into the process when hiring consultants. She also said grant writing is full-time job and that the city should invest in grant-writing. Rice echoed what Hess said about making it easier for the public to join the lobbying effort of state and federal officials for dollars for the wastewater treatment plant.

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