Map by consulting firm shows configuration of Hampton Township sewer lines to the Bay County treatment plant that are now in place. Belleman Forms Emergency Public-Private Committee to Eye Utility Costs
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An unpublicized "emergency" public-private committee to consider solutions to water-sewer bills has sprung into action at the behest of City Manager Robert V. Belleman.
At its first meeting last Thursday, one firm, Mersen, 900 Harrison St., formerly Carbone of America, indicated it is doing very well, has plans to expand in the near future by at least 150 employees and is seeking assurance that city utilities are stable and affordable.
That was the report from former city commissioner Virginia Hutter, who has been urging Mr. Belleman to address citizen complaints as well as the need to strengthen utility financial and infrastructure frameworks.
She credited MyBayCity.com with helping bring the water-sewer issue to the forefront. The news magazine has published a series of articles on the history of the water and sewer service and plants.
Mrs. Hutter said the meeting at the former Social Security building, 700 4th St., ran one and a half hours and brought together three citizens and about a dozen representatives of public and private organizations. Among groups represented, she said, were Mersen, Bay Regional Medical Center, the Bay City Public Schools, Do-All, Inc., McDonald's Corp., and the Bay Area Family Y.
The committee is expected to meet again a week from Tuesday to review a spreadsheet on costs being developed by the city, she said.
The City of Bay City has such high sewer and water legacy and bond costs that it is running into roadblocks on a plan to merge with Bay County to bring Lake Huron water here, several officials have told MyBayCity.com
And, local attorney William Darbee has brought suit against the city challenging the accuracy of water metering, in line with citizens with similar complaints who have been lining up at city commission meetings. Mr. Darbee, who lives at 510 N. Johnson St., alleges that despite many requests for resolution of alleged high bills, the city has done nothing.
Meanwhile, declining water sales by 24 percent from 1998 to 2008 alone have lowered revenue from a high of $14 million to about $10 million, putting more pressure on city officials to hike the rate structure.
The idea of bringing Whitestone Point water here from near AuGres is a tantalizing one, and a vision some local officials have had for at least half a century.
But now, outgoing Mayor Charles Brunner points out in an exclusive interview with MyBayCity.com, the vision is at risk of becoming a nightmare.
However, he sees a hopeful sign in that city commissioners have attended meetings during which negotiations have taken place with out-city water customers.
Although several studies of possible water merger scenarios are pending which could provide a path to future progress, Mr. Brunner suggested the plans should be submitted to a mediator to clear the way for cooperation.
Mr. Brunner, who will soon take his seat as state representative from the 96th District, says much of the problem began when former city manager James Palenick apparently tried to force out-city water customers to accept higher rates.
"In 2002 I voted against a Palenick resolution to sever ties with out-city customers to bring them back into line and then raise rates," said the mayor.
"Although City Manager Robert Belleman, is following Palenick's lead in holding firm on rate hikes, and Mr. Brunner sees him as "looking out for the best interests of the city," he concluded: "we're not in the catbird seat any more."
The city spent about $1 million for master meters that have never been used apparently because of the perception they are unreliable, said Mr. Brunner. The master meters were the "only thing Palenick won" in a lawsuit brought by out-city customers, he observed.
Major out-city customer Hampton Township has already pulled out of the city sewer treatment system, electing to join with Essexville and create an $18 million system crossing the river to get service from the West Bay County Regional Wastewater Treatment Plant, he noted.
William Kaiser, city wastewater superintendent, has estimated the annual loss to the city at $1.5 million, amounting to about 10 percent of annual revenue, because of the Hampton shift.
The city response to the Hampton pullout includes reductions in expenditures for fiscal year 2011 amounting to $460,000 of wages and fringes affecting three wastewater workers, a shift supervisor, an instrumentation technician and half a clerical position, according to Mr. Kaiser.
Future plans include completing the design and construction of a more efficient dewatering operation; continuing to reduce operating costs for utilities and chemicals created by reduced demand; and other potential staff reductions.
Mr. Brunner and City Commission President Chris Shannon noted that the Hampton/Essexville plan is funded a federal grant of $3.8 million and federal loans of about $14 million.
If water customers like Bangor and Monitor townships elect to seek a separate deal with Saginaw-Midland for Lake Huron water, the city's utility structure could be dealt a major hit it can ill afford, the mayor said.
The city is hamstrung by an original $45 million bond issue from 2003 that was court ordered when PCBs were found in the system. Payments on that bond issue are about $4.8 million a year and will continue until 2025, decreasing annually over the 15 years.
Commissioner Shannon at a recent city finance and policy meeting raised the question to Mr. Kaiser if there was a possibility of the City moving our tertiary treatment units and plugging them into the West Bay County plant to reduce costs/rates, minutes show.
Mr. Kaiser stated in order for the City to join West Bay County, "the processing units would have to be moved since the City already purchased them; the City would have to pump our product across the river which would include capital costs; and they would have to entertain another expansion to accommodate the City as they only expanded to process the product they currently treat.
"We pay about $2 million a year toward the cost of the $45 million upgrades required in 2003 that would not go away. Other costs that would not go away would include our collection systems costs that they are not interested in taking over and that is where the issues are right not, not in the treatment process as the City is competitive in treatment process costs." Mr. Kaiser stated that about 71 percent of costs would remain even if the City joined West Bay County.
Effective July 1, 2009 the water rate for City of Bay City customers was raised to $2.90 per unit. A unit is 100 cubic feet (ccf) or 748 gallons. This rate represents an increase of just 22 cents per unit, or $1.54 per month for the average residential customer using 7 ccf per month.
A MyBayCity.com review of water bills to city customers finds that rates now appear to be on a sliding scale of indeterminate rationale. One month the water rate will be $3.15 per 100 cubic feet, another month it will be $2.90 for the same amount. Sewer fees range from $7.97 per 100 cubic feet to $9.85.
The city also mysteriously changes the number of days on which the bill is based from 24 days to 35 days. Officials have said they want bills on a uniform 30-day basis.
City officials say customers outside of Bay City pay different amounts as determined by the respective governmental units that service their areas. Addressing a past rate hike, the city stated: "While the increase is due in part to normal inflationary factors, a portion of this increase is required for the above mentioned facility rehabilitation."
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