Bloomfield Township Board of Trustees Study Session Meeting on March 9, 2026

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Transcript

Click any timestamp to jump the video to that moment. Auto-transcribed; expect occasional errors on proper nouns.

1. 0:00

   Welcome to the Bloomfield Township Board of Trustees study session on Monday, March the 9th. If we'll all stand for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Okay, welcome everyone. It looks like we have some familiar faces in the crowd. First item is our public comment. If you're here to make a public comment, I'll come up to the podium, but it doesn't look like we'll have much public comment unless you're, sir, are you up for public comment tonight? Okay, so we'll move past and close public comment and open up number two, discussing concerning water and sewer rates for 2026-27, presented by Noah Michalski, our director of the Department of Public Works. Welcome, Noah. Thank you very much. Wanted to give you an intro of what we've been working on for the rates, kind of frame out the April timeframe for setting the rates this year and then also frame out the next kind of year because there'll be some big changes that we have all talked about in the last few years that will be coming to fruition in the next couple of years. So one thing is I'll have Raf Tellis speak in a little bit once I do a little bit of an intro, but they are on the call and they will be here when we start to talk more about the progress we're making on the rate study and the transitional items that we're looking at as far as changing how we calculate the rates. So first I thought it would be, you know, you guys are veterans. at this point but i wanted to give you some of the kind of you know basics about our system one is we're irrigation heavy so that makes the impact of weather even bigger and a driver of our rates than your average community our usage also it's an industry trend our usage is declining and the costs are increasing additionally we have some actually that's an old number on there as far as sewer only customers so about 209 of those customers and switched over to the township water system that's part of the south bloomfield highlands project so we're down to like 141 on sewer only customers then we have about 2600 water only customers where sewer is not available within the township additionally um we're largely residential so there's not a business or an industrial uh component of our users that we can couch costs with and a lot of other communities they force the higher cost to the industrial or the business users we don't have that user base here

2. 1:15

   but they are on the call and they will be here when we start to talk more about the progress we're making on the rate study and the transitional items that we're looking at as far as changing how we calculate the rates. So first I thought it would be, you know, you guys are veterans. at this point but i wanted to give you some of the kind of you know basics about our system one is we're irrigation heavy so that makes the impact of weather even bigger and a driver of our rates than your average community our usage also it's an industry trend our usage is declining and the costs are increasing additionally we have some actually that's an old number on there as far as sewer only customers so about 209 of those customers and switched over to the township water system that's part of the south bloomfield highlands project so we're down to like 141 on sewer only customers then we have about 2600 water only customers where sewer is not available within the township additionally um we're largely residential so there's not a business or an industrial uh component of our users that we can couch costs with and a lot of other communities they force the higher cost to the industrial or the business users we don't have that user base here within the township so uh you guys have seen this before but calculating rates is kind of a simple exercise it's your cost or your needed revenue requirement over the amount of water you believe you're going to sell right and then things get uh more complicated by volumes after that so it's an exercise of forecasting our revenues determining the cost the next fiscal year our reserve policy comes into play there whereas if we've over collected in the previous year we add to the reserves and then we can decide what to do with that also we have fixed costs from the system and we have a fixed rate as well which covers approximately 21 percent currently and then we proportionalize that rate based on the mdu so you guys those should be all familiar things to you then we have variable costs these costs are diminishing as a component of our rate a our sewer costs are billed at 100 fixed right now it's about 25 fixed on the water end but they're looking to go to 50 fixed rate as a component but then we have the variable

3. 2:30

   they force the higher cost to the industrial or the business users we don't have that user base here within the township so uh you guys have seen this before but calculating rates is kind of a simple exercise it's your cost or your needed revenue requirement over the amount of water you believe you're going to sell right and then things get uh more complicated by volumes after that so it's an exercise of forecasting our revenues determining the cost the next fiscal year our reserve policy comes into play there whereas if we've over collected in the previous year we add to the reserves and then we can decide what to do with that also we have fixed costs from the system and we have a fixed rate as well which covers approximately 21 percent currently and then we proportionalize that rate based on the mdu so you guys those should be all familiar things to you then we have variable costs these costs are diminishing as a component of our rate a our sewer costs are billed at 100 fixed right now it's about 25 fixed on the water end but they're looking to go to 50 fixed rate as a component but then we have the variable and then what we're going to talk about this year and implement next year is is it a uniform rate flat fee tiered rate fully burdened tiered rate that's where you guys are going to have some homework at a learn what those terms mean through our expertise or through your own research and then also be in the conduit to what the residents are saying out there and asking for so as far as the rate study uh it's ongoing i looked at our original rate study and the delivery date was may 17th we are under a tighter timeline but we've kind of opened that up because of the tasks that we've not undertake so one question was to look at our supplier and make sure that we're getting the right type of rate and that's from looking at other suppliers that's looking at finding our own source of water what would that look like compared to great lakes water or saqua right now additionally there was a wastewater treatment plant question where would it be more economical for us to build a plant in the township or find another treater of sewage additionally monthly billing was a priority a tiered rate and then looking at the ready to serve charge as part of

4. 3:45

   water end but they're looking to go to 50 fixed rate as a component but then we have the variable and then what we're going to talk about this year and implement next year is is it a uniform rate flat fee tiered rate fully burdened tiered rate that's where you guys are going to have some homework at a learn what those terms mean through our expertise or through your own research and then also be in the conduit to what the residents are saying out there and asking for so as far as the rate study uh it's ongoing i looked at our original rate study and the delivery date was may 17th we are under a tighter timeline but we've kind of opened that up because of the tasks that we've not undertake so one question was to look at our supplier and make sure that we're getting the right type of rate and that's from looking at other suppliers that's looking at finding our own source of water what would that look like compared to great lakes water or saqua right now additionally there was a wastewater treatment plant question where would it be more economical for us to build a plant in the township or find another treater of sewage additionally monthly billing was a priority a tiered rate and then looking at the ready to serve charge as part of that component of the rate so what we're going to do the implementation of the tiered rate we've been advised by the consultant who's on the phone i'll have him speak to this a little bit later we want to implement the monthly billing before we implement the tiered rate so we don't have that kind of sticker shock of the tiered rate for the higher tier customers additionally it'll kind of soften that move and we've had a um software change for bsna and we're not ready to go to monthly billing at this point so we're looking for that july time frame to gear up and go to monthly billing then implement the actual tiered rate after i get feedback from the board and from the residents in april of 27th so we'd be in effect looking at a maintenance update to the rate for april of this year so that's kind of the um we'll get the answers on so supplier the wastewater treatment plant will get the implementation of the tier or the monthly billing in place then we'll put get the tiered rate figured out kind of by april of 2027. so things we have to consider both this year and for the tiered rate going forward right

5. 5:00

   billing was a priority a tiered rate and then looking at the ready to serve charge as part of that component of the rate so what we're going to do the implementation of the tiered rate we've been advised by the consultant who's on the phone i'll have him speak to this a little bit later we want to implement the monthly billing before we implement the tiered rate so we don't have that kind of sticker shock of the tiered rate for the higher tier customers additionally it'll kind of soften that move and we've had a um software change for bsna and we're not ready to go to monthly billing at this point so we're looking for that july time frame to gear up and go to monthly billing then implement the actual tiered rate after i get feedback from the board and from the residents in april of 27th so we'd be in effect looking at a maintenance update to the rate for april of this year so that's kind of the um we'll get the answers on so supplier the wastewater treatment plant will get the implementation of the tier or the monthly billing in place then we'll put get the tiered rate figured out kind of by april of 2027. so things we have to consider both this year and for the tiered rate going forward right sacwa i got the letter these are all estimates at this time they don't their budget year doesn't start until july so again when i called so 8.5 is the estimate from sacwa right now wrc i called them and they had just gotten out of the meetings the day before that we'll set our rates so i say that that they're very early on in their rate making process but they gave me their best bets were eight and a half and six percent increases coming so additionally implementation of that monthly billing and the costs involved with that considering those the extra work involved with that and kind of getting the utility billing program up and running to where we can kind of facilitate that um evaluation of a tiered rate this is again a critical item um we're looking you know we would write the book on this right um from the township's perspective we're we've been recommended by raf tell us you don't go crazy you can't have like 10 or 11 tiers because that's kind of

6. 6:15

   so things we have to consider both this year and for the tiered rate going forward right sacwa i got the letter these are all estimates at this time they don't their budget year doesn't start until july so again when i called so 8.5 is the estimate from sacwa right now wrc i called them and they had just gotten out of the meetings the day before that we'll set our rates so i say that that they're very early on in their rate making process but they gave me their best bets were eight and a half and six percent increases coming so additionally implementation of that monthly billing and the costs involved with that considering those the extra work involved with that and kind of getting the utility billing program up and running to where we can kind of facilitate that um evaluation of a tiered rate this is again a critical item um we're looking you know we would write the book on this right um from the township's perspective we're we've been recommended by raf tell us you don't go crazy you can't have like 10 or 11 tiers because that's kind of like getting cute right and split it into 10 or 11 peer uh tiers really doesn't make sense from a user perspective um and we got to remember we're kind of driving two things costs that the residents are in the driver's seat on their costs consumption drives the cost additionally um a base amount of usage like what do we estimate that a family of four or the average house in bloomfield township will use and then you become a lower user and an upper user right we're trying to distinguish between the water necessary for life and bathing versus discretionary use water right and so the tiered rate will bring those that out it's very similar to like how dte does their tiered rate and again the book is open we can drive this discussion any way we want um but tiered rate kind of puts you you're either a low user or a high user and you're a low user until you become a high user so we would set based on our own data what we would think a typical you know amount of usage for the average family would be and then if you're above that you pay a higher rate right so basically your discretionary use would be at that higher rate and again there's two things you're in

7. 7:30

   like getting cute right and split it into 10 or 11 peer uh tiers really doesn't make sense from a user perspective um and we got to remember we're kind of driving two things costs that the residents are in the driver's seat on their costs consumption drives the cost additionally um a base amount of usage like what do we estimate that a family of four or the average house in bloomfield township will use and then you become a lower user and an upper user right we're trying to distinguish between the water necessary for life and bathing versus discretionary use water right and so the tiered rate will bring those that out it's very similar to like how dte does their tiered rate and again the book is open we can drive this discussion any way we want um but tiered rate kind of puts you you're either a low user or a high user and you're a low user until you become a high user so we would set based on our own data what we would think a typical you know amount of usage for the average family would be and then if you're above that you pay a higher rate right so basically your discretionary use would be at that higher rate and again there's two things you're in control of the cost but you're also trying to drive conservation as well right where if you're in control you can advocate for using more water or less you're going to use less to save money it's the thought pattern So again, evaluating the impact of storage on the rates, ready-to-serve fee as a proportion of the rate. Right now, we're funding right around 21%. Within our rate, about 21% of our costs are fixed fee. They're satisfied by the fixed fee, and the remaining portion of the rate satisfies everything else. Again, that discretionary usage, or decreasing usage, these are industry things, right? Where the usage is going down, that's an industry trend, and costs are increasing. So when are water rates ever going to go down? Probably never. We also have a strong capital building program, which is an investment in the system, and we do that, I mean, they're going to speak at today's meeting about how our very strong capital improvement program, that takes money, and that comes in play with the rate. Also, our reserve levels and policies, right? If we feel like we can go down in our reserve amount, that can augment the amount that we have in the rate as well.

8. 8:45

   basically your discretionary use would be at that higher rate and again there's two things you're in control of the cost but you're also trying to drive conservation as well right where if you're in control you can advocate for using more water or less you're going to use less to save money it's the thought pattern So again, evaluating the impact of storage on the rates, ready-to-serve fee as a proportion of the rate. Right now, we're funding right around 21%. Within our rate, about 21% of our costs are fixed fee. They're satisfied by the fixed fee, and the remaining portion of the rate satisfies everything else. Again, that discretionary usage, or decreasing usage, these are industry things, right? Where the usage is going down, that's an industry trend, and costs are increasing. So when are water rates ever going to go down? Probably never. We also have a strong capital building program, which is an investment in the system, and we do that, I mean, they're going to speak at today's meeting about how our very strong capital improvement program, that takes money, and that comes in play with the rate. Also, our reserve levels and policies, right? If we feel like we can go down in our reserve amount, that can augment the amount that we have in the rate as well. So again, you can mitigate a rate increase by using reserve funding to some extent. At this point, I want to turn over to Colin and Raftelis, and Tom, I guess you guys can kind of reiterate the kind of high points that I've had, or add in any other flavor. I'll go on to the last slide, because it's kind of your homework, and then everybody can see that. colin or tom sure yeah happy to jump in can you hear me okay yes okay um so noah's kind of framed out some considerations here when it comes to the raid just based on discussions we've had to this point um in terms of what is important to the township i mean to maybe back up just a second and give a really high level overview there's sort of a three-step process that we go through to determine a rate one is what's the overall level of revenue that we need to run the water and sewer utility so it's sort of a what's the size of the pie that we need to split up among the various types of users and rates so there's there's just an overall amount of revenue i think right now we have about 32 million dollars in revenue budgeted for for next year if i'm

9. 10:00

   Also, our reserve levels and policies, right? If we feel like we can go down in our reserve amount, that can augment the amount that we have in the rate as well. So again, you can mitigate a rate increase by using reserve funding to some extent. At this point, I want to turn over to Colin and Raftelis, and Tom, I guess you guys can kind of reiterate the kind of high points that I've had, or add in any other flavor. I'll go on to the last slide, because it's kind of your homework, and then everybody can see that. colin or tom sure yeah happy to jump in can you hear me okay yes okay um so noah's kind of framed out some considerations here when it comes to the raid just based on discussions we've had to this point um in terms of what is important to the township i mean to maybe back up just a second and give a really high level overview there's sort of a three-step process that we go through to determine a rate one is what's the overall level of revenue that we need to run the water and sewer utility so it's sort of a what's the size of the pie that we need to split up among the various types of users and rates so there's there's just an overall amount of revenue i think right now we have about 32 million dollars in revenue budgeted for for next year if i'm remembering that correctly so just what does that need to be to continue to operate the utility and that's going to be a function of a lot of the factors that noah mentioned projections of our internal operating expenses as well as those of our suppliers and then on the capital side funding for capital improvement projects to maintain our distribution and collection system that ultimately goes to those regional suppliers so that's the sort of size of the pie and the second step is to determine what proportion of that goes to different types of users whether it's residential commercial as well as looking at how you recover that um be it are a fixed charge or a volume charge so that's sort of once you've determined what that overall need is it's really about how do your policies inform how you split that pie up from a cost recovery perspective so when we talk about rate structure we're really focusing on how we recover that overall level of revenue the past few years we've been making more or less equal adjustments to the rates to meet that overall funding need and now we're digging back into how does that get recovered

10. 11:15

    i think right now we have about 32 million dollars in revenue budgeted for for next year if i'm remembering that correctly so just what does that need to be to continue to operate the utility and that's going to be a function of a lot of the factors that noah mentioned projections of our internal operating expenses as well as those of our suppliers and then on the capital side funding for capital improvement projects to maintain our distribution and collection system that ultimately goes to those regional suppliers so that's the sort of size of the pie and the second step is to determine what proportion of that goes to different types of users whether it's residential commercial as well as looking at how you recover that um be it are a fixed charge or a volume charge so that's sort of once you've determined what that overall need is it's really about how do your policies inform how you split that pie up from a cost recovery perspective so when we talk about rate structure we're really focusing on how we recover that overall level of revenue the past few years we've been making more or less equal adjustments to the rates to meet that overall funding need and now we're digging back into how does that get recovered among the various types of users so noah's sort of highlighted um some considerations here that relate to the structure so if you think about you know the simplest thing you could do is is take take the overall cost and divide by the number of users and it'd be a cost per month that everyone would pay and that would be the same no matter how much you use um on the flip side you could make it all volumetric and it would be totally based on usage and then there are options in the middle and then even within that fixed versus variable cost recovery there are options so on a fixed fee you could charge everyone the same or you could do what we do here which is recognize um have higher charges for customers with larger water meters and then on the water on the volume side um something we haven't do with it but something we haven't done but there's interested in exploring is this tiered rate option, which is charging a higher unit rate as your usage passes certain thresholds. So say the first 5,000 gallons might be at, you know, and I'm just making up numbers here at a dollar, and the next five, say five to 10,

11. 12:30

    rates to meet that overall funding need and now we're digging back into how does that get recovered among the various types of users so noah's sort of highlighted um some considerations here that relate to the structure so if you think about you know the simplest thing you could do is is take take the overall cost and divide by the number of users and it'd be a cost per month that everyone would pay and that would be the same no matter how much you use um on the flip side you could make it all volumetric and it would be totally based on usage and then there are options in the middle and then even within that fixed versus variable cost recovery there are options so on a fixed fee you could charge everyone the same or you could do what we do here which is recognize um have higher charges for customers with larger water meters and then on the water on the volume side um something we haven't do with it but something we haven't done but there's interested in exploring is this tiered rate option, which is charging a higher unit rate as your usage passes certain thresholds. So say the first 5,000 gallons might be at, you know, and I'm just making up numbers here at a dollar, and the next five, say five to 10, might be at $1.50, and then everything over 10 might be, you know, $2. And when you think about why or how you might structure that tiered rate, generally what you're getting at is trying to differentiate between indoor sort of essential usage and then outdoor discretionary usage. So when we set tiers in a tiered rate, sort of like we're considering here, those cutoffs are really designed to charge a lower unit rate for indoor usage, which is more consistent, but also considered, you know, less discretionary. So things for like washing clothes, washing dishes, that sort of thing. And then when you get above into that next tier, you're really getting into the outdoor, more discretionary, more seasonal, but also a bigger driver of our peaking costs. And then if you were to go to a third tier, it might be even higher. Maybe say it's the top 10 to 25% of users in terms of that seasonal usage. So those are some considerations on the tiered structure. We've identified some other questions on the fixed fee. I know that was a big focus.

12. 13:45

    you know, and I'm just making up numbers here at a dollar, and the next five, say five to 10, might be at $1.50, and then everything over 10 might be, you know, $2. And when you think about why or how you might structure that tiered rate, generally what you're getting at is trying to differentiate between indoor sort of essential usage and then outdoor discretionary usage. So when we set tiers in a tiered rate, sort of like we're considering here, those cutoffs are really designed to charge a lower unit rate for indoor usage, which is more consistent, but also considered, you know, less discretionary. So things for like washing clothes, washing dishes, that sort of thing. And then when you get above into that next tier, you're really getting into the outdoor, more discretionary, more seasonal, but also a bigger driver of our peaking costs. And then if you were to go to a third tier, it might be even higher. Maybe say it's the top 10 to 25% of users in terms of that seasonal usage. So those are some considerations on the tiered structure. We've identified some other questions on the fixed fee. I know that was a big focus. last time as well um just overall level of fixed revenue and as well as um do we you know do we proportionate relative to meter size or or some other basis um the only thing i'd add on that is if you think about fixed revenues we actually have a decent amount of our variable revenue that probably isn't going to fluctuate all that much and that's the amount that people use indoors so even though technically on a per quarter basis we have a certain amount of fixed revenue recovery there's a certain amount of the volume revenue that's not going to go away because usage people's usage is not going to go to zero even if it fluctuates depending on the summer weather or over time it goes down some there'll always be a base level of usage there um so the idea beyond answering any questions was really just to get everyone's perspective um and what you've been hearing from residents in terms of what's important uh for the rates in terms of fixed versus variable tiered rates overall level um just questions you're getting um just so that we can kind of take all of that feedback as we bring forward proposals but also as we offer explanation for what those proposals are just to make sure that we're answering the questions and um and that we're evaluating within

13. 15:00

    last time as well um just overall level of fixed revenue and as well as um do we you know do we proportionate relative to meter size or or some other basis um the only thing i'd add on that is if you think about fixed revenues we actually have a decent amount of our variable revenue that probably isn't going to fluctuate all that much and that's the amount that people use indoors so even though technically on a per quarter basis we have a certain amount of fixed revenue recovery there's a certain amount of the volume revenue that's not going to go away because usage people's usage is not going to go to zero even if it fluctuates depending on the summer weather or over time it goes down some there'll always be a base level of usage there um so the idea beyond answering any questions was really just to get everyone's perspective um and what you've been hearing from residents in terms of what's important uh for the rates in terms of fixed versus variable tiered rates overall level um just questions you're getting um just so that we can kind of take all of that feedback as we bring forward proposals but also as we offer explanation for what those proposals are just to make sure that we're answering the questions and um and that we're evaluating within the scope that's identified for this project that we're we're digging into the things that are important to the township um so i'll i'll leave it there and just open it up for questions questions you um discussion but it's really just an opportunity to get get feedback before we really start um digging in in earnest on the structuring side yeah thank you colin um and i wanted to frame a couple more things before we kind of talk and i'll walk through these questions and why they're on there additionally i'll just remind everyone that the last rate study we did talk to the residents and their top three um kind of priorities for water rate setting were stability of rate um lower rate obviously and then um to be in the driver's seat those were kind of you know again in a tiered rate or a variable base rate um so that those were the main things now we're gonna so we're looking at doing a maintenance increase for the rate this year and that's a special circumstance because last year we were able to spend down the reserves that we were we were accessing our reserves cory and his team and also the meter program was able to spend down those reserves

14. 16:15

    are just to make sure that we're answering the questions and um and that we're evaluating within the scope that's identified for this project that we're we're digging into the things that are important to the township um so i'll i'll leave it there and just open it up for questions questions you um discussion but it's really just an opportunity to get get feedback before we really start um digging in in earnest on the structuring side yeah thank you colin um and i wanted to frame a couple more things before we kind of talk and i'll walk through these questions and why they're on there additionally i'll just remind everyone that the last rate study we did talk to the residents and their top three um kind of priorities for water rate setting were stability of rate um lower rate obviously and then um to be in the driver's seat those were kind of you know again in a tiered rate or a variable base rate um so that those were the main things now we're gonna so we're looking at doing a maintenance increase for the rate this year and that's a special circumstance because last year we were able to spend down the reserves that we were we were accessing our reserves cory and his team and also the meter program was able to spend down those reserves but we did have a era the irrigation months crept into uh september and october and so any money we spent out of the reserves we gained it right back in extra irrigation months right so um so that excess and the reserves and the reserves allows us to maybe consider a zero percent rate increase this year as a maintenance increase and or up to three or five percent right we can augment uh uh again we can augment the rates that are being quoted to us by our suppliers by that reserve amount additionally Cory and them are still doing a lot of work next year but the meter program is winding down and we're not going to need reserve funding to finish out the meter program so that allows us to use that reserve to the amount that we're comfortable to augment the rate increase that we're seeing so then it's what are your priorities right and we're getting at this is the stability of rate being in the driver's seat what do you guys feel are your top three or four priorities when it comes to rate setting is that do you not care if the water system is down 50 days a year we want to save that 3

15. 17:30

    accessing our reserves cory and his team and also the meter program was able to spend down those reserves but we did have a era the irrigation months crept into uh september and october and so any money we spent out of the reserves we gained it right back in extra irrigation months right so um so that excess and the reserves and the reserves allows us to maybe consider a zero percent rate increase this year as a maintenance increase and or up to three or five percent right we can augment uh uh again we can augment the rates that are being quoted to us by our suppliers by that reserve amount additionally Cory and them are still doing a lot of work next year but the meter program is winding down and we're not going to need reserve funding to finish out the meter program so that allows us to use that reserve to the amount that we're comfortable to augment the rate increase that we're seeing so then it's what are your priorities right and we're getting at this is the stability of rate being in the driver's seat what do you guys feel are your top three or four priorities when it comes to rate setting is that do you not care if the water system is down 50 days a year we want to save that 3 million and C CIP money and take it right off the rate we don't care if there's you know it's a less reliable water system right that's an extreme example but that's a definitely do you support a capital improvement project or not right that's what that comes down to what's the resident sentiment what have you guys been hearing out there we're gonna gather that data from the residents as well and get that sentiment but you guys are also the voice and ear for the township residents so what are you hearing out there additionally ask them why right why do you think water rates are too high what leads you to believe that where's your data coming from the research that we've done overall most of the rates are right about the same people just kind of and there's a lot of things I've said I've been hearing about that the rate a little different and again i use my example down there in parma some people just do a a flat fee and we don't think that's the proper way to do it but you guys are that pipeline for that you know clearly people call me as well and talk about rates but you guys are out there you know seven more eyes and ears out there your idea for a tiered rate structure colin walked through a paradigm that had up to like three tiers or so again there's that baseline usage

16. 18:45

    you not care if the water system is down 50 days a year we want to save that 3 million and C CIP money and take it right off the rate we don't care if there's you know it's a less reliable water system right that's an extreme example but that's a definitely do you support a capital improvement project or not right that's what that comes down to what's the resident sentiment what have you guys been hearing out there we're gonna gather that data from the residents as well and get that sentiment but you guys are also the voice and ear for the township residents so what are you hearing out there additionally ask them why right why do you think water rates are too high what leads you to believe that where's your data coming from the research that we've done overall most of the rates are right about the same people just kind of and there's a lot of things I've said I've been hearing about that the rate a little different and again i use my example down there in parma some people just do a a flat fee and we don't think that's the proper way to do it but you guys are that pipeline for that you know clearly people call me as well and talk about rates but you guys are out there you know seven more eyes and ears out there your idea for a tiered rate structure colin walked through a paradigm that had up to like three tiers or so again there's that baseline usage that i think we all are kind of we don't want to penalize those people for the baseline usage then there's going to be this maybe this middle group that are your higher irrigators that pay a little bit more and then maybe break it into a you know high-end exorbitant use i've got my wine cellar in the basement that uses water to cool it and so i have thirty two thousand dollar water bills per quarter that exists in our system so those type of things um and how is that tiered structure going to impact usage among the residents oh what percentage of the revenue should be generated from the ready to serve this is another thing that we can kind of play with right our fixed our sewer costs are completely fixed 100 percent our water costs right now are 25 fixed 75 variable they're looking at going to 50 50%. So how much should we support the ready to serve as a component of the rate? You know, that's common among, there's been a long history at the township. Neil, you probably have been here from when it was 0% in the ready to serve and it got slowly build up as we reacted to our

17. 20:00

    through a paradigm that had up to like three tiers or so again there's that baseline usage that i think we all are kind of we don't want to penalize those people for the baseline usage then there's going to be this maybe this middle group that are your higher irrigators that pay a little bit more and then maybe break it into a you know high-end exorbitant use i've got my wine cellar in the basement that uses water to cool it and so i have thirty two thousand dollar water bills per quarter that exists in our system so those type of things um and how is that tiered structure going to impact usage among the residents oh what percentage of the revenue should be generated from the ready to serve this is another thing that we can kind of play with right our fixed our sewer costs are completely fixed 100 percent our water costs right now are 25 fixed 75 variable they're looking at going to 50 50%. So how much should we support the ready to serve as a component of the rate? You know, that's common among, there's been a long history at the township. Neil, you probably have been here from when it was 0% in the ready to serve and it got slowly build up as we reacted to our suppliers, increasing the ready to serve. And as we had needed the Hills and Valleys money as well to kind of get through the operational stuff. But what level of support do we want? Do we want to take the risk of putting the fixed fee money over into the variable fee? Because that would represent a risk. If we under collect, we would have to basically ensure that we collected the prop, you know, right at net zero, right? Because we can't run a deficit, especially if there's no reserves. So, um, MEU, is this still a good way to proportionalize the costs? Before we went to MEU, basically every resident paid the same. Is that equitable? Is the MEU structure more equitable? Is it not? Do we have a fully burdened tiered rate where you remove that proportionalization, but you take on some risk as part of the system? Excuse me. What level of support should we have for a CIP project? We've got large projects coming up on Maple Road, Lasher, very expensive. Do we hold back 10 years on doing those projects or do we move forward?

18. 21:15

    here from when it was 0% in the ready to serve and it got slowly build up as we reacted to our suppliers, increasing the ready to serve. And as we had needed the Hills and Valleys money as well to kind of get through the operational stuff. But what level of support do we want? Do we want to take the risk of putting the fixed fee money over into the variable fee? Because that would represent a risk. If we under collect, we would have to basically ensure that we collected the prop, you know, right at net zero, right? Because we can't run a deficit, especially if there's no reserves. So, um, MEU, is this still a good way to proportionalize the costs? Before we went to MEU, basically every resident paid the same. Is that equitable? Is the MEU structure more equitable? Is it not? Do we have a fully burdened tiered rate where you remove that proportionalization, but you take on some risk as part of the system? Excuse me. What level of support should we have for a CIP project? We've got large projects coming up on Maple Road, Lasher, very expensive. Do we hold back 10 years on doing those projects or do we move forward? You know, use our reserves and use our rate-funded CIP money to do those projects now and attack them now, right? That's a decision that we can make. We'll have impacts on the level of service, all those things. Any other considerations that you may be aware of that I'm not, right? I want you guys to make sure you bring those to the table so they can be considered, and then we can, you know, this is the time to affect that change. That's another reason why we want to kind of, like, make sure this process is slow and methodical. We give you guys the opportunity to think about these things, dream the big dreams, right, and then I can kill the hope and tell you why things are done the way they are. Or, you know, obviously new ideas are great, you know, things for everyone. I believe that personally within my department. So I think new things, you can, there's some risk involved with new things, but we can, you know, it's our car to do what we wish with at this point. So if anyone has any questions for me, if you'd like to share your opinions, and no, I will thank Michael and Chris. They've been involved on a few meetings so far, three meetings I think we've had with Raftelis, with that group.

19. 22:30

    You know, use our reserves and use our rate-funded CIP money to do those projects now and attack them now, right? That's a decision that we can make. We'll have impacts on the level of service, all those things. Any other considerations that you may be aware of that I'm not, right? I want you guys to make sure you bring those to the table so they can be considered, and then we can, you know, this is the time to affect that change. That's another reason why we want to kind of, like, make sure this process is slow and methodical. We give you guys the opportunity to think about these things, dream the big dreams, right, and then I can kill the hope and tell you why things are done the way they are. Or, you know, obviously new ideas are great, you know, things for everyone. I believe that personally within my department. So I think new things, you can, there's some risk involved with new things, but we can, you know, it's our car to do what we wish with at this point. So if anyone has any questions for me, if you'd like to share your opinions, and no, I will thank Michael and Chris. They've been involved on a few meetings so far, three meetings I think we've had with Raftelis, with that group. So thank you guys for your efforts there. They're going to be on the front line involved as we go through this. I see getting the information from the public and then us getting back in more of like a workshop atmosphere. in october time frame to really talk about the tier grade how that looks so between now and then reach out to me let's have those discussions right now this is the time right i don't know what you're thinking if you don't say what you're thinking so and neither do the residents and the constituents so this is the time thank you no any questions for no i have a couple comments as you know i've always been a big proponent of making sure that we have the sufficient assets for capital improvements for our structures underneath the ground i mean that's the most important part of everything is that it works and does what it's supposed to do without the major water main breaks like we just experienced this past weekend and no i in detroit right so that's number one without that it's not we're not going to have water the other part as far as i'm concerned i'm less interested in the tier rate system and more interested in just straight usage

20. 23:45

    They've been involved on a few meetings so far, three meetings I think we've had with Raftelis, with that group. So thank you guys for your efforts there. They're going to be on the front line involved as we go through this. I see getting the information from the public and then us getting back in more of like a workshop atmosphere. in october time frame to really talk about the tier grade how that looks so between now and then reach out to me let's have those discussions right now this is the time right i don't know what you're thinking if you don't say what you're thinking so and neither do the residents and the constituents so this is the time thank you no any questions for no i have a couple comments as you know i've always been a big proponent of making sure that we have the sufficient assets for capital improvements for our structures underneath the ground i mean that's the most important part of everything is that it works and does what it's supposed to do without the major water main breaks like we just experienced this past weekend and no i in detroit right so that's number one without that it's not we're not going to have water the other part as far as i'm concerned i'm less interested in the tier rate system and more interested in just straight usage not necessarily everybody the same rate we can talk about that but usage is really important just charge people for what they use straightforward simple as that if somebody doesn't use a lot of water uh then they're going to obviously be charged a lot less than the person with the wine cellar using 32 you know getting a 32 000 bill on a quarter um the the So the tier weight rate doesn't really excite me, that whole structure. I'd like to try and make it as simple as possible for the residents so they understand it, and they could not feel like they're not being treated fairly. I have a question when you sit. I know one of the heavy uses is seasonal and irrigation, and that happens a lot in the township. And I know that part of that was getting the other meters to save money to not pay for sewer. On the other side of that is, though, there are heavy uses for irrigation. So what are the thoughts in terms of, you know, is that going to be a separate rate,

21. 25:00

    i'm concerned i'm less interested in the tier rate system and more interested in just straight usage not necessarily everybody the same rate we can talk about that but usage is really important just charge people for what they use straightforward simple as that if somebody doesn't use a lot of water uh then they're going to obviously be charged a lot less than the person with the wine cellar using 32 you know getting a 32 000 bill on a quarter um the the So the tier weight rate doesn't really excite me, that whole structure. I'd like to try and make it as simple as possible for the residents so they understand it, and they could not feel like they're not being treated fairly. I have a question when you sit. I know one of the heavy uses is seasonal and irrigation, and that happens a lot in the township. And I know that part of that was getting the other meters to save money to not pay for sewer. On the other side of that is, though, there are heavy uses for irrigation. So what are the thoughts in terms of, you know, is that going to be a separate rate, or is that going to be, again, a usage-based rate, or...? Yeah, I mean, the way I'm leaning in my mind right now is, which obviously there's a lot of discussion, would be to make that distinction. We would, again, have, like, your baseline usage for, again, just the washing clothes, washing your body, drinking. Then anything above that would be an irrigation-type rate. And we have a ready-made example of that, because in the winter we're not irrigating here. So we can determine it'll be a Bloomfield Township rate, too, as far as... It won't be like the EPA estimate for a family of four in your average US home. It'll be like a Bloomfield Township rate. That's the importance of us having our own, you know, data on our usage. And then... Again, what's the penalty or the surplus charge for going into that irrigation? I don't know. That's kind of how we need to discuss. And maybe it's only kind of that one distinction between a base level user and an irrigative user, right? And that's the only tier you have. Well, or a home use versus a business use versus an irrigation use. You said not too many tiers or it gets confusing. But then that's even, we have an industrial rate. They have different components of that rate. So even an industrial difference in the tier is, you know, you don't need to get too cute with industrial because we just don't have the base for it here.

22. 26:15

    So what are the thoughts in terms of, you know, is that going to be a separate rate, or is that going to be, again, a usage-based rate, or...? Yeah, I mean, the way I'm leaning in my mind right now is, which obviously there's a lot of discussion, would be to make that distinction. We would, again, have, like, your baseline usage for, again, just the washing clothes, washing your body, drinking. Then anything above that would be an irrigation-type rate. And we have a ready-made example of that, because in the winter we're not irrigating here. So we can determine it'll be a Bloomfield Township rate, too, as far as... It won't be like the EPA estimate for a family of four in your average US home. It'll be like a Bloomfield Township rate. That's the importance of us having our own, you know, data on our usage. And then... Again, what's the penalty or the surplus charge for going into that irrigation? I don't know. That's kind of how we need to discuss. And maybe it's only kind of that one distinction between a base level user and an irrigative user, right? And that's the only tier you have. Well, or a home use versus a business use versus an irrigation use. You said not too many tiers or it gets confusing. But then that's even, we have an industrial rate. They have different components of that rate. So even an industrial difference in the tier is, you know, you don't need to get too cute with industrial because we just don't have the base for it here. So it's not going to impact your other rates very much. So that's the problem. I have heard from one resident, actually the one that enlightened me about their toilet leak. And then we went home and found out we had the same problem at our house. And it was draining us a gallon and a half, an hour a day. It adds up. And that's part of the new meters. The Ion water, we've been, people have been very happy when they've caught a leak. We've caught two. So I'm an advocate for Ion water. I've told many people about it. But the person who actually enlightened us, because I knew about it, I just hadn't done it. They are very concerned about the water costs and the water usage to the point that when we've run into them, like at the gym, they shower at the gym to try and keep their water bill down. So, you know, I mean, everybody can make their own choices. So let me know that the water can make their own choices. But that's a specific resident that has talked to me. I mean, and that makes good fiscal sense because they're already paying for the water at the gym, really. So, you know, like I don't know if I'd like to be the one forcing them to do that, but it's prudent. You know, they're already paying for it.

23. 27:30

    So even an industrial difference in the tier is, you know, you don't need to get too cute with industrial because we just don't have the base for it here. So it's not going to impact your other rates very much. So that's the problem. I have heard from one resident, actually the one that enlightened me about their toilet leak. And then we went home and found out we had the same problem at our house. And it was draining us a gallon and a half, an hour a day. It adds up. And that's part of the new meters. The Ion water, we've been, people have been very happy when they've caught a leak. We've caught two. So I'm an advocate for Ion water. I've told many people about it. But the person who actually enlightened us, because I knew about it, I just hadn't done it. They are very concerned about the water costs and the water usage to the point that when we've run into them, like at the gym, they shower at the gym to try and keep their water bill down. So, you know, I mean, everybody can make their own choices. So let me know that the water can make their own choices. But that's a specific resident that has talked to me. I mean, and that makes good fiscal sense because they're already paying for the water at the gym, really. So, you know, like I don't know if I'd like to be the one forcing them to do that, but it's prudent. You know, they're already paying for it. It was an interesting thing because we were heading out and they go, well, we're going back to shower. And we're like, you know, we kind of decided to go home. Oh, yeah, I don't know if I'd go there just to shower. I don't think the gas, depending on where you live, I don't know if the gas economics. They had done a class. Gas is a lot more expensive than water. Right. No, they had done a class, but we didn't feel like, you know, we had to, we were going to go back in and shower to save the water. Right, right. I like my shower at home. So, Noah, I know GLIWA sets, they're setting a higher rate, right, for water and sewer right now? Yeah. And what is it they pass down? Anywhere from 5% to 10% depending on who you are and how far you are away from the plant. Right. Which affects our rates. That's correct. Right. And they're not final. They're, they're, they come out with a draft final rate and then you see all the newspaper articles, people start getting up in arms and then they come out with, it's probably going to be one or two percentage points lower than that. So, and last year, they, what did they pass on last year? It was like seven, seven or five. For water and sewer. Right. I think they might've been seven at first and then the out roar, came down, came down a little bit. Five to five. And then what is it this year? What was the proposed rate this year? Water and sewer. Eight and a half. And then what was sewer? Oh. Oh.

24. 28:45

    You know, they're already paying for it. It was an interesting thing because we were heading out and they go, well, we're going back to shower. And we're like, you know, we kind of decided to go home. Oh, yeah, I don't know if I'd go there just to shower. I don't think the gas, depending on where you live, I don't know if the gas economics. They had done a class. Gas is a lot more expensive than water. Right. No, they had done a class, but we didn't feel like, you know, we had to, we were going to go back in and shower to save the water. Right, right. I like my shower at home. So, Noah, I know GLIWA sets, they're setting a higher rate, right, for water and sewer right now? Yeah. And what is it they pass down? Anywhere from 5% to 10% depending on who you are and how far you are away from the plant. Right. Which affects our rates. That's correct. Right. And they're not final. They're, they're, they come out with a draft final rate and then you see all the newspaper articles, people start getting up in arms and then they come out with, it's probably going to be one or two percentage points lower than that. So, and last year, they, what did they pass on last year? It was like seven, seven or five. For water and sewer. Right. I think they might've been seven at first and then the out roar, came down, came down a little bit. Five to five. And then what is it this year? What was the proposed rate this year? Water and sewer. Eight and a half. And then what was sewer? Oh. Oh. um five and a half five and a half right six but yeah all right sorry six yep and then um i i know uh novice had a lot of problems with their water mains and those are glewa water mains i understand it was a transmission main along 14 mile it serves us too right it affected our pressure system right it affected our pressures but we were hit the main was closer to our community like four years ago when it broke right and that one did impact us we had um a blip of low pressure between two and five a.m so luckily we were all sleeping except for me and my water staff um we were all sleeping uh so we didn't have a high usage and it didn't drop below regulatory levels so we popped right back up we were going to have to worry about testing and didn't have to do a two-day shutdown and testing and all that and a boil water right so we were just far enough away from the break that it didn't impact us west bloomfield had impacts i saw that wall lake novi all had yeah you know the mall was closed they were bringing in porta potties to the suburban show play or vibe showcase yeah so it was a well and they got teaches you the value of water right because now they have to wait even

25. 30:00

    um five and a half five and a half right six but yeah all right sorry six yep and then um i i know uh novice had a lot of problems with their water mains and those are glewa water mains i understand it was a transmission main along 14 mile it serves us too right it affected our pressure system right it affected our pressures but we were hit the main was closer to our community like four years ago when it broke right and that one did impact us we had um a blip of low pressure between two and five a.m so luckily we were all sleeping except for me and my water staff um we were all sleeping uh so we didn't have a high usage and it didn't drop below regulatory levels so we popped right back up we were going to have to worry about testing and didn't have to do a two-day shutdown and testing and all that and a boil water right so we were just far enough away from the break that it didn't impact us west bloomfield had impacts i saw that wall lake novi all had yeah you know the mall was closed they were bringing in porta potties to the suburban show play or vibe showcase yeah so it was a well and they got teaches you the value of water right because now they have to wait even though it's coming up to test the water correct and then over the weekend we had west bloomfield had another big water main and i saw pictures it was like water all over the yeah it was right near me i did just on the end just far enough away where it didn't impact right yeah and then you've kept me now on the link and i appreciate you and your team about all the water mains it's almost been weekly we've had water main breaks going on last week was the first seven day period that we didn't have a water main break all winter yeah and which is still good for the system and these water mains are older right and then the ground's shifting because of the the change in temperature and that's what's contributing to all these breaks that we're having right now great lakes water that's a whole different set of circumstances down there that's a 42 inch pipe it's a material that has defects that are known to it so that's a little bit different case than our our cases up here that one might have happened anyway even without the freeze and thaw because maybe yeah and just the age of the pipe and the and just the material and there's a lot of that uh from the detroit water system because of the age of the system that wasn't maintained properly through the years correct but we're in a better state than the city of detroit because at least you know the stuff in the city of

26. 31:15

    was a well and they got teaches you the value of water right because now they have to wait even though it's coming up to test the water correct and then over the weekend we had west bloomfield had another big water main and i saw pictures it was like water all over the yeah it was right near me i did just on the end just far enough away where it didn't impact right yeah and then you've kept me now on the link and i appreciate you and your team about all the water mains it's almost been weekly we've had water main breaks going on last week was the first seven day period that we didn't have a water main break all winter yeah and which is still good for the system and these water mains are older right and then the ground's shifting because of the the change in temperature and that's what's contributing to all these breaks that we're having right now great lakes water that's a whole different set of circumstances down there that's a 42 inch pipe it's a material that has defects that are known to it so that's a little bit different case than our our cases up here that one might have happened anyway even without the freeze and thaw because maybe yeah and just the age of the pipe and the and just the material and there's a lot of that uh from the detroit water system because of the age of the system that wasn't maintained properly through the years correct but we're in a better state than the city of detroit because at least you know the stuff in the city of detroit was built first then they started building out into the suburbs so our stuff's newer relatively newer than theirs and on that material you're talking about do any of our water mains you know have that material we have a few like um but we've looked at them and they aren't in the same state as those pipes okay so and they're not as big they are our transmission mains but so we do have that pipe over um on top of it better as far as inspections and They're just starting to inspect that pipe because of the breaks that happened four and five years ago. Actually, our ex-engineering director is the one working on that job over at Great Lakes Water right now. So with those mains that we have of that material, is there a plan to replace those at some point? Yep, there's a study being conducted in the next three or four, part of our capital improvement plan is doing a study of those. And so it's concrete and it's got metal wire within it. And that wire actually gives it the strength, but that wire snaps over time and breaks. And so you can go, you can send sound waves through the pipe and tell how many of those wires are broke. And then if there's over a certain amount of percentage of wires broke, the pipe has got a major defect.

27. 32:30

    but we're in a better state than the city of detroit because at least you know the stuff in the city of detroit was built first then they started building out into the suburbs so our stuff's newer relatively newer than theirs and on that material you're talking about do any of our water mains you know have that material we have a few like um but we've looked at them and they aren't in the same state as those pipes okay so and they're not as big they are our transmission mains but so we do have that pipe over um on top of it better as far as inspections and They're just starting to inspect that pipe because of the breaks that happened four and five years ago. Actually, our ex-engineering director is the one working on that job over at Great Lakes Water right now. So with those mains that we have of that material, is there a plan to replace those at some point? Yep, there's a study being conducted in the next three or four, part of our capital improvement plan is doing a study of those. And so it's concrete and it's got metal wire within it. And that wire actually gives it the strength, but that wire snaps over time and breaks. And so you can go, you can send sound waves through the pipe and tell how many of those wires are broke. And then if there's over a certain amount of percentage of wires broke, the pipe has got a major defect. So there are ways to determine the quality of the pipe in the ground, and we're on the precipice of beginning that transmission main. What we did in the beginning capital improvement projects from like 2000 until now, we focused on the neighborhood pipes. Now it's the backbones, the transit, and that's why the Maple Road pipe, you know, that's a backbone of our system, Lasher Road, that type of thing. Well, no, I think, you know, in my sub, we've had two water main breaks across the street from my house since we've lived here. The one happened in the summer, blew out a section of the road, and we called, and they came out and reduced the water flow, but kept it on until they, and they came in the morning. I mean, I'm so grateful, sorry about Detroit, but that we handle things. The second time, we were actually out of the country. The second time, we were out of the country. and it was winter and i called i heard about it i heard guys i called and that's what i heard he said oh it was like a really great geyser it's one of the best ones i've seen we got home at night and couldn't tell but in the morning everything there's a pond across from us it's not built on everything was encased in ice and the neighbors said that they had bulldozers going up and down in front of my house because i was literally across from us keeping to get the water out of the road so that it didn't freeze because it was so cold when we got home everything was ice but it was dark we couldn't see it the next morning i went okay what happened over there yeah i was

28. 33:45

    So there are ways to determine the quality of the pipe in the ground, and we're on the precipice of beginning that transmission main. What we did in the beginning capital improvement projects from like 2000 until now, we focused on the neighborhood pipes. Now it's the backbones, the transit, and that's why the Maple Road pipe, you know, that's a backbone of our system, Lasher Road, that type of thing. Well, no, I think, you know, in my sub, we've had two water main breaks across the street from my house since we've lived here. The one happened in the summer, blew out a section of the road, and we called, and they came out and reduced the water flow, but kept it on until they, and they came in the morning. I mean, I'm so grateful, sorry about Detroit, but that we handle things. The second time, we were actually out of the country. The second time, we were out of the country. and it was winter and i called i heard about it i heard guys i called and that's what i heard he said oh it was like a really great geyser it's one of the best ones i've seen we got home at night and couldn't tell but in the morning everything there's a pond across from us it's not built on everything was encased in ice and the neighbors said that they had bulldozers going up and down in front of my house because i was literally across from us keeping to get the water out of the road so that it didn't freeze because it was so cold when we got home everything was ice but it was dark we couldn't see it the next morning i went okay what happened over there yeah i was shooting 50 or 60 feet out of the ground that's that's what he told me when i called the the water department was great and like i said they took care of it the next day on both occasions so it makes me appreciate everything you and your department does thank you i want to quickly echo that i mean you know your team is on call a lot um and do make a uh very frequent uh after hours uh responses to you know continue the providing great you know water and sewer services to to the township so kudos to the entire team um quick question when we talk about tiers just so i'm clear in my mind let's you know uh an example i've just it's like marginal right so that you know it might be a dollar for the first hundred gallons and then it's two dollars for a hundred to two hundred and then three hundred for three dollars for like you know three hundred to uh right it's not like it doesn't all become three dollars once you get to 300 gallons no but we are in the driver's seat so literally yes so we literally could make it like that it's we have the like colin said we have the same pie it's how big of a bites are we taking out of it

29. 35:00

    it was dark we couldn't see it the next morning i went okay what happened over there yeah i was shooting 50 or 60 feet out of the ground that's that's what he told me when i called the the water department was great and like i said they took care of it the next day on both occasions so it makes me appreciate everything you and your department does thank you i want to quickly echo that i mean you know your team is on call a lot um and do make a uh very frequent uh after hours uh responses to you know continue the providing great you know water and sewer services to to the township so kudos to the entire team um quick question when we talk about tiers just so i'm clear in my mind let's you know uh an example i've just it's like marginal right so that you know it might be a dollar for the first hundred gallons and then it's two dollars for a hundred to two hundred and then three hundred for three dollars for like you know three hundred to uh right it's not like it doesn't all become three dollars once you get to 300 gallons no but we are in the driver's seat so literally yes so we literally could make it like that it's we have the like colin said we have the same pie it's how big of a bites are we taking out of it yeah right and so if we feel like that value to the system is and we have to meet the revenue requirement so however less you want to make the lower people pay the top people are paying more so there's this teeter-totter this inverse relationship that goes on there too but certainly there could be there could be that much of a variance i don't see that being the case but certainly the bigger the variance the cert the the bigger the propensity to have you change your activities with the water right right so what uh three tiers have been discussed we could do any number of tiers but sort of one other tier i think about are the folks that that are uh seasonal residents here so you know the the family of four use would be x but the seasonal tend to be you know empty nesters and it's even lower well then they then the commodity rate would take over in that case right and then if you really want to benefit those people right i'm just this isn't my idea or anything but a fully burden tiered rate so you don't have any ready to serve as part of that right that's because you're not going to eliminate the current structure you're not going to eliminate with the tiers that ready to serve down so if that's the portion you want to attack but i think there's good logic to the fact

30. 36:15

    we have the like colin said we have the same pie it's how big of a bites are we taking out of it yeah right and so if we feel like that value to the system is and we have to meet the revenue requirement so however less you want to make the lower people pay the top people are paying more so there's this teeter-totter this inverse relationship that goes on there too but certainly there could be there could be that much of a variance i don't see that being the case but certainly the bigger the variance the cert the the bigger the propensity to have you change your activities with the water right right so what uh three tiers have been discussed we could do any number of tiers but sort of one other tier i think about are the folks that that are uh seasonal residents here so you know the the family of four use would be x but the seasonal tend to be you know empty nesters and it's even lower well then they then the commodity rate would take over in that case right and then if you really want to benefit those people right i'm just this isn't my idea or anything but a fully burden tiered rate so you don't have any ready to serve as part of that right that's because you're not going to eliminate the current structure you're not going to eliminate with the tiers that ready to serve down so if that's the portion you want to attack but i think there's good logic to the fact that even when people are down in florida you're still protected by a water system because if your house burns down they're not going to say well they're in florida let's just let it go right and additionally your house you don't physically disconnect the water when you leave for florida each year so there is either i don't know if even people turn it off and we get a lot of calls or their basins and that are being flooded um so anecdotally no but that would be the driver then you know and and they should realize a lower cost simply by their usage so but we are taking on more of a risk with a fully burdened rate and when you think of risk for a water system you mitigate risk with conservative planning so maybe you have to think okay we're going to sell less water then right because you don't want we can't run at a deficit here in the water department right okay a lot of business over the years my thoughts about the ready to serve and what portion it should it should carry has changed and you know presently i think that the ready to serve that should it is important component and it needs to be significant component um mostly because i you know i really think that the building and operating and maintenance of this infrastructure is a community project that we all share in uh regardless of usage

31. 37:30

    that even when people are down in florida you're still protected by a water system because if your house burns down they're not going to say well they're in florida let's just let it go right and additionally your house you don't physically disconnect the water when you leave for florida each year so there is either i don't know if even people turn it off and we get a lot of calls or their basins and that are being flooded um so anecdotally no but that would be the driver then you know and and they should realize a lower cost simply by their usage so but we are taking on more of a risk with a fully burdened rate and when you think of risk for a water system you mitigate risk with conservative planning so maybe you have to think okay we're going to sell less water then right because you don't want we can't run at a deficit here in the water department right okay a lot of business over the years my thoughts about the ready to serve and what portion it should it should carry has changed and you know presently i think that the ready to serve that should it is important component and it needs to be significant component um mostly because i you know i really think that the building and operating and maintenance of this infrastructure is a community project that we all share in uh regardless of usage um and so i would definitely support a you know a healthy percentage that's based that's just a fixed amount um i do like tiers too i do like the idea of one of the super higher users you know paying more for that higher amount and as Neil mentioned you know the heart of this all of this is the capital improvement project and the money we continue to invest I see that as just you know this current taxes being paid to maintain a system currently versus you know we reduce that we're just kicking the can down the road making future taxpayers really carry the burden of something we should have paid for today right so yeah those are a couple thoughts I have off top man thanks a lot so that's a couple things I want to actually I have the similar thoughts to both trustee Barnett as well as the clerk Brooke on capital improvements I think that is not something we should be kicking the cane on the road the cheapest time to be putting something in the ground is right now construction costs are going up a lot higher than our tax rate is or some of these other rates so if we invest in it now all it does is it actually saves taxpayer money long term and as we talked about people wanting to use water and

32. 38:45

    of this infrastructure is a community project that we all share in uh regardless of usage um and so i would definitely support a you know a healthy percentage that's based that's just a fixed amount um i do like tiers too i do like the idea of one of the super higher users you know paying more for that higher amount and as Neil mentioned you know the heart of this all of this is the capital improvement project and the money we continue to invest I see that as just you know this current taxes being paid to maintain a system currently versus you know we reduce that we're just kicking the can down the road making future taxpayers really carry the burden of something we should have paid for today right so yeah those are a couple thoughts I have off top man thanks a lot so that's a couple things I want to actually I have the similar thoughts to both trustee Barnett as well as the clerk Brooke on capital improvements I think that is not something we should be kicking the cane on the road the cheapest time to be putting something in the ground is right now construction costs are going up a lot higher than our tax rate is or some of these other rates so if we invest in it now all it does is it actually saves taxpayer money long term and as we talked about people wanting to use water and the assets associated with it the best time to invest in it is right now so I don't want any plan in which we're kicking that can on the road I think that is just short-sightedness and that's not what we're here about it's long-term visibility Neil's been on the board for 20 years and 24 right so but the reason that we continue to have a good water department because we've been investing it for 24 years we don't kick the cane down the road for political reasons or to get reelected it is about making sure it's good for generations so i want to continue that because of the fact that we have our water rates are a lot of times tied to big water usage and we have the thirst on our thirstiest day of our thirstiest month i do think where the tiers come in is to kind of make those people pay their fair share but making sure that the family of four or those fixed income people can drive their rate can determine how much they want their bill to be so that's kind of where i see those to be so similar to what you've said and echoing some of our um senior people here on the board thank you what's he calling senior people yeah tenured excuse me your tenure your experience i like that tenured and experience good i've got a question about uh

33. 40:00

    taxpayer money long term and as we talked about people wanting to use water and the assets associated with it the best time to invest in it is right now so I don't want any plan in which we're kicking that can on the road I think that is just short-sightedness and that's not what we're here about it's long-term visibility Neil's been on the board for 20 years and 24 right so but the reason that we continue to have a good water department because we've been investing it for 24 years we don't kick the cane down the road for political reasons or to get reelected it is about making sure it's good for generations so i want to continue that because of the fact that we have our water rates are a lot of times tied to big water usage and we have the thirst on our thirstiest day of our thirstiest month i do think where the tiers come in is to kind of make those people pay their fair share but making sure that the family of four or those fixed income people can drive their rate can determine how much they want their bill to be so that's kind of where i see those to be so similar to what you've said and echoing some of our um senior people here on the board thank you what's he calling senior people yeah tenured excuse me your tenure your experience i like that tenured and experience good i've got a question about uh monthly billing uh currently uh water and sewers is charged central services fees and they bill quarterly the charge from related to billing is 177 000 a year going to monthly billing what will be those new charges i'll have to ask jason they do the central services i'll have to wait for the report i don't i don't know the answer to that how they will basically i know they have the report then our amount we need to give per year is in that report and then they split it up i assume he'll be taking it then out in 12 months installments or 12 monthly installments but i don't know that but you're doing more work and instead of doing it four times a year we're now doing it 12. so i'm expecting those rates to go up and then we have to explain to our residents that we increased rates because we went to monthly billing because we have more costs coming in for central services now central services that the water department pays is for like the township supervisor's time the accounting department's

34. 41:15

    your tenure your experience i like that tenured and experience good i've got a question about uh monthly billing uh currently uh water and sewers is charged central services fees and they bill quarterly the charge from related to billing is 177 000 a year going to monthly billing what will be those new charges i'll have to ask jason they do the central services i'll have to wait for the report i don't i don't know the answer to that how they will basically i know they have the report then our amount we need to give per year is in that report and then they split it up i assume he'll be taking it then out in 12 months installments or 12 monthly installments but i don't know that but you're doing more work and instead of doing it four times a year we're now doing it 12. so i'm expecting those rates to go up and then we have to explain to our residents that we increased rates because we went to monthly billing because we have more costs coming in for central services now central services that the water department pays is for like the township supervisor's time the accounting department's time hr so um our handling of more transactions will not augment that and if anything i've looked at it there's a hundred and seventy seven thousand dollar charge yeah i get for collecting water and sewer rate fees and doing the billing and the central service calculation you are saying we're going to go from four months to 12 months that i'm expecting to triple and i don't well if it's not going to triple what will it be so two things number one the water department does the billing not the treasurer's office the treasurer's office just collects uh they do the billing and we are already billing 12 months months of the year we are just billing one third of the customers each month so that each third gets billed four times but we are going through the process of billing 12 months out of the year so whether you bill one-third of the customers or all of the customers in a given month the marginal cost is going to be minimal and most of it's going to be bared born by the water department already because they're

35. 42:30

    water department pays is for like the township supervisor's time the accounting department's time hr so um our handling of more transactions will not augment that and if anything i've looked at it there's a hundred and seventy seven thousand dollar charge yeah i get for collecting water and sewer rate fees and doing the billing and the central service calculation you are saying we're going to go from four months to 12 months that i'm expecting to triple and i don't well if it's not going to triple what will it be so two things number one the water department does the billing not the treasurer's office the treasurer's office just collects uh they do the billing and we are already billing 12 months months of the year we are just billing one third of the customers each month so that each third gets billed four times but we are going through the process of billing 12 months out of the year so whether you bill one-third of the customers or all of the customers in a given month the marginal cost is going to be minimal and most of it's going to be bared born by the water department already because they're the ones that do the billing so postage line item so the cost to do the billing is going to go up and we're going to charge our customers higher rates because we're billing once a month instead of billing once every four months yes there's a cost to that yes and so our rates are going up because we're going to go from quarterly bills to monthly bills whether or not rates go up is another decision but the cost the cost the biggest cost the biggest cost is going to be the postage and we are we are the cost the cost of the billing and the collecting is not going to change dramatically because it's already done 12 months out of the year what about the new uh bsa online can we do yes we can we we are always encouraging customers to get an e-bill instead of a paper bill so we encourage people to get an e-bill we also encourage people to pay online or to set up an auto pay well maybe we would have something where if you a lot of businesses do it where you say if you want a monthly bill mailed to your house every month but if you're willing to do online with like an email reminder maybe you save a couple bucks

36. 43:45

    minimal and most of it's going to be bared born by the water department already because they're the ones that do the billing so postage line item so the cost to do the billing is going to go up and we're going to charge our customers higher rates because we're billing once a month instead of billing once every four months yes there's a cost to that yes and so our rates are going up because we're going to go from quarterly bills to monthly bills whether or not rates go up is another decision but the cost the cost the biggest cost the biggest cost is going to be the postage and we are we are the cost the cost of the billing and the collecting is not going to change dramatically because it's already done 12 months out of the year what about the new uh bsa online can we do yes we can we we are always encouraging customers to get an e-bill instead of a paper bill so we encourage people to get an e-bill we also encourage people to pay online or to set up an auto pay well maybe we would have something where if you a lot of businesses do it where you say if you want a monthly bill mailed to your house every month but if you're willing to do online with like an email reminder maybe you save a couple bucks or something because that would send postage is like you said postage is going to be a big we're increasing expenses noah has confirmed we're increasing expenses we don't need to keep increase those expenses on the on our rate providers just because we want to go to monthly billing i mean this is a question that comes up from every there are a lot of people that want monthly billing they don't want quarterly billing so it's a response to resident demand too so what do we do or not they can it's not just about you know convenience for us the people that want quarterly can pay less yeah i just want to make sure so the driver of the monthly billing isn't the board it is residents response so as that when we come up with the reasons of why they've asked us to do that that was a feedback strong control my bill support i want to be able to factor it that's the reason we're doing it so residents tell us they want to do something even if it drives costs whatever that dollar amount is that's what we're supposed to do we're here to represent i have i have not heard of one person asking to pay more money so i can pay monthly i have not heard one person ask me we did a study um what martin three four years ago um and invited the public and people wanted the monthly billing because what noah explained is that

37. 45:00

    or something because that would send postage is like you said postage is going to be a big we're increasing expenses noah has confirmed we're increasing expenses we don't need to keep increase those expenses on the on our rate providers just because we want to go to monthly billing i mean this is a question that comes up from every there are a lot of people that want monthly billing they don't want quarterly billing so it's a response to resident demand too so what do we do or not they can it's not just about you know convenience for us the people that want quarterly can pay less yeah i just want to make sure so the driver of the monthly billing isn't the board it is residents response so as that when we come up with the reasons of why they've asked us to do that that was a feedback strong control my bill support i want to be able to factor it that's the reason we're doing it so residents tell us they want to do something even if it drives costs whatever that dollar amount is that's what we're supposed to do we're here to represent i have i have not heard of one person asking to pay more money so i can pay monthly i have not heard one person ask me we did a study um what martin three four years ago um and invited the public and people wanted the monthly billing because what noah explained is that they bill people a chunk of the residents every quarter okay every month every month a third so in january a third of the residents get a bill february a third of the residents so we're all on different cycles but we're all getting bills we're all they're keeping track of our usage every day so the volume will increase which means the expenses are going to increase and rates are going to go up because of the human resource side and the processing of the billing period period no well the rate is separate but monthly billing will add extra cost monthly bill will add extra cost the bottom line to residents the bulk of it would be postage yes it's still going up um and i like the idea by the way of potentially saying well there's a little savings if we people sign up for online stuff i get solicited by that all the time all constantly and just save money with my verizon bill and it goes back to what people have said and similar what you said neil is people to drive their their they have the ability to drive their uh bill and actually save money it gives them more opportunity and it's very simple what will happen with the extra cash that becomes available when you go to monthly billing it's still paying for the commodity so it basically we're

38. 46:15

    um and invited the public and people wanted the monthly billing because what noah explained is that they bill people a chunk of the residents every quarter okay every month every month a third so in january a third of the residents get a bill february a third of the residents so we're all on different cycles but we're all getting bills we're all they're keeping track of our usage every day so the volume will increase which means the expenses are going to increase and rates are going to go up because of the human resource side and the processing of the billing period period no well the rate is separate but monthly billing will add extra cost monthly bill will add extra cost the bottom line to residents the bulk of it would be postage yes it's still going up um and i like the idea by the way of potentially saying well there's a little savings if we people sign up for online stuff i get solicited by that all the time all constantly and just save money with my verizon bill and it goes back to what people have said and similar what you said neil is people to drive their their they have the ability to drive their uh bill and actually save money it gives them more opportunity and it's very simple what will happen with the extra cash that becomes available when you go to monthly billing it's still paying for the commodity so it basically we're going to have to determine what that hills and valleys money what's required into the future but we'll spend down to the reserves to the amount that we feel comfortable right now we keep in reserves o and m money to cover the hills and valleys if you're collecting every month and as if you're collecting every month it's going to go down quite a bit theoretically we should go down to some other level and then we'll spend the reserves down to that level what's the expectation since we are billing right now the expectations of how much that can be lowered i don't know we haven't even set the tiered rate we haven't looked if we have no you know it depends on the components of the rate and things like that so what do we receive tiered rates from sakwa no so that means that the rates tiered rate that we're going to charge are not going to be consistent what the township is being built well yeah we're charged each each community that's part of sakwa is charged an individual rate correct and it doesn't vary based on time of the year does it well it takes into account time day peak hour so yes certainly does if we're a high irrigation they give you one rate

39. 47:30

    available when you go to monthly billing it's still paying for the commodity so it basically we're going to have to determine what that hills and valleys money what's required into the future but we'll spend down to the reserves to the amount that we feel comfortable right now we keep in reserves o and m money to cover the hills and valleys if you're collecting every month and as if you're collecting every month it's going to go down quite a bit theoretically we should go down to some other level and then we'll spend the reserves down to that level what's the expectation since we are billing right now the expectations of how much that can be lowered i don't know we haven't even set the tiered rate we haven't looked if we have no you know it depends on the components of the rate and things like that so what do we receive tiered rates from sakwa no so that means that the rates tiered rate that we're going to charge are not going to be consistent what the township is being built well yeah we're charged each each community that's part of sakwa is charged an individual rate correct and it doesn't vary based on time of the year does it well it takes into account time day peak hour so yes certainly does if we're a high irrigation they give you one rate or do they give you two rates they take a rate that encompasses all one rate well actually two a ready to serve and a variable okay so there is no tiered rate for usage from sakwa correct that the township can identify and match up with the rates we're charging that becomes a problem they're charging on a different unit which is different it's a different animal from a supplier standpoint look that becomes a math problem it's chemistry 101 we all talk about units and chemistry in high school it's not a difficult problem my concern is if we are not getting tiered rates from sakwa or the water provider then why would we charge a tiered rate to our customers because we you know about our residents and what their usage is, SOCWA doesn't. So they wouldn't be able to set a tier grade. They don't know what our high users are versus our middle versus our low. But we are not getting charged for water based on a tier grade from SOCWA. We buy a pie and we decide how that pie is going to be cut up. SOCWA sells us the pie. You buy a pie that doesn't vary based on tier structure. Right. We cut the pie up. Yes. So we will be overcharging and undercharging some customers. No. But Mark, one of the things you're not

40. 48:45

    account time day peak hour so yes certainly does if we're a high irrigation they give you one rate or do they give you two rates they take a rate that encompasses all one rate well actually two a ready to serve and a variable okay so there is no tiered rate for usage from sakwa correct that the township can identify and match up with the rates we're charging that becomes a problem they're charging on a different unit which is different it's a different animal from a supplier standpoint look that becomes a math problem it's chemistry 101 we all talk about units and chemistry in high school it's not a difficult problem my concern is if we are not getting tiered rates from sakwa or the water provider then why would we charge a tiered rate to our customers because we you know about our residents and what their usage is, SOCWA doesn't. So they wouldn't be able to set a tier grade. They don't know what our high users are versus our middle versus our low. But we are not getting charged for water based on a tier grade from SOCWA. We buy a pie and we decide how that pie is going to be cut up. SOCWA sells us the pie. You buy a pie that doesn't vary based on tier structure. Right. We cut the pie up. Yes. So we will be overcharging and undercharging some customers. No. But Mark, one of the things you're not considering is that we are paying the capital improvement. So if Martin uses twice as much water as Neil, should they pay the same rate? Because he's putting more water through those pipes and we got to replace those pipes when they break. If that's the case, the engineers in the community, whenever they size our system, they always put in a portion of the cost that it's needed to support public safety requirements and fire hydrants. We have not had a rate increase for maintaining the system to meet public safety requirements in a very long time. And if you're talking about that, then that's the same thing. I'm not talking about that. And when we have, when we have renters that are not paying property taxes, that should be paid by the owner, not the renter. Because that is part of a component. It's part of the component every time they come in here. Even in here. Even back in august of 2013 when the engineers sized the connection to sakwa they included the requirements for public safety and that adds volume whether it's used or not and we keep

41. 50:00

    be overcharging and undercharging some customers. No. But Mark, one of the things you're not considering is that we are paying the capital improvement. So if Martin uses twice as much water as Neil, should they pay the same rate? Because he's putting more water through those pipes and we got to replace those pipes when they break. If that's the case, the engineers in the community, whenever they size our system, they always put in a portion of the cost that it's needed to support public safety requirements and fire hydrants. We have not had a rate increase for maintaining the system to meet public safety requirements in a very long time. And if you're talking about that, then that's the same thing. I'm not talking about that. And when we have, when we have renters that are not paying property taxes, that should be paid by the owner, not the renter. Because that is part of a component. It's part of the component every time they come in here. Even in here. Even back in august of 2013 when the engineers sized the connection to sakwa they included the requirements for public safety and that adds volume whether it's used or not and we keep hearing about potential to use but those charges aren't going back to public safety okay any other comments or questions yes um dirk becker leg a couple years ago um treasurer so stack at the time he was a trustee he asked about reducing the minimum water consumption a year and dirk's response was you have to have a fact basis for reducing it and my questions are all tied to the fact basis what's the fact basis to going to treat tier structure if we do not have a requirement from sakwa to pay on a tier based structure if you cannot identify the savings then that gets the township into trouble that also comes by the way so there's there's how we set the rate you know what what we get charged from sakwa by the way

42. 51:15

    requirements for public safety and that adds volume whether it's used or not and we keep hearing about potential to use but those charges aren't going back to public safety okay any other comments or questions yes um dirk becker leg a couple years ago um treasurer so stack at the time he was a trustee he asked about reducing the minimum water consumption a year and dirk's response was you have to have a fact basis for reducing it and my questions are all tied to the fact basis what's the fact basis to going to treat tier structure if we do not have a requirement from sakwa to pay on a tier based structure if you cannot identify the savings then that gets the township into trouble that also comes by the way so there's there's how we set the rate you know what what we get charged from sakwa by the way is tiered in a way because it is a specially designed rate just for us that takes in consideration our high peak usage times. It's not then tiered individually, but that tiering is considered in the specific rate we're charged. On top of that, how they charge us is not a factor that we have any obligation to consider in how we charge our residents. Yes, it is. You say it's important to you, but this board will decide how we actually set that rate. We're using water and we're putting in fancy meters and looking at the consumption. They have a meter in our connection and they're charging a rate based on what we use, right? And other factors. And well, then they should charge a tiered rate to us. Well, they don't have to charge a tiered rate to us. Yes, but we are separate and that rate should be tied to what the use that's actually happening. And because we aren't being charged extra and you can't calculate it out, then we shouldn't be charging tiered rates, period. I disagree. Lastly, OPEP. We are fully funded on OPEP. Will the rates include payments into the OPEP fund,

43. 52:30

    is tiered in a way because it is a specially designed rate just for us that takes in consideration our high peak usage times. It's not then tiered individually, but that tiering is considered in the specific rate we're charged. On top of that, how they charge us is not a factor that we have any obligation to consider in how we charge our residents. Yes, it is. You say it's important to you, but this board will decide how we actually set that rate. We're using water and we're putting in fancy meters and looking at the consumption. They have a meter in our connection and they're charging a rate based on what we use, right? And other factors. And well, then they should charge a tiered rate to us. Well, they don't have to charge a tiered rate to us. Yes, but we are separate and that rate should be tied to what the use that's actually happening. And because we aren't being charged extra and you can't calculate it out, then we shouldn't be charging tiered rates, period. I disagree. Lastly, OPEP. We are fully funded on OPEP. Will the rates include payments into the OPEP fund, either as contributions or benefits. Thank you. uh we're quantifying that question with the rate consultant right now like if it were a hundred thousand dollars in interest income that were transferred over from the general fund what would that mean to the rate and so we should be able to provide that data um i i asked about opeb right opeb is fully funded it has nothing to do with the interest rates on the cash okay so i guess is that a fee being charged to us it's a quarter million dollars a year and that will that be i believe there's oped charges in there yeah so there's no fact basis again because milliman and i've heard this over and over again from chris he trusts the milliman reports and if the liability is fully funded then that should not be there my other concern is comments that were made in the uh meaning for the budget if we're putting money in from water and sewer when the actuary doesn't

44. 53:45

    I disagree. Lastly, OPEP. We are fully funded on OPEP. Will the rates include payments into the OPEP fund, either as contributions or benefits. Thank you. uh we're quantifying that question with the rate consultant right now like if it were a hundred thousand dollars in interest income that were transferred over from the general fund what would that mean to the rate and so we should be able to provide that data um i i asked about opeb right opeb is fully funded it has nothing to do with the interest rates on the cash okay so i guess is that a fee being charged to us it's a quarter million dollars a year and that will that be i believe there's oped charges in there yeah so there's no fact basis again because milliman and i've heard this over and over again from chris he trusts the milliman reports and if the liability is fully funded then that should not be there my other concern is comments that were made in the uh meaning for the budget if we're putting money in from water and sewer when the actuary doesn't require it even if it is to cover benefit payouts to keep the township off of a correction corrective action plan for me that's inappropriate uh lastly uh thank you for making the comment on interest you had 20 million dollars in cash that's at four percent that's for eight hundred thousand dollars lastly regarding tiered rates if we did actually have a tiered rate or even an evening rate from sakwa then we could look at other opportunities for savings we have a million gallon storage facility uh which we aren't buying water in the evening even though glee well offers lower rates uh and then letting it out into the uh township during the day so we aren't doing that and we're not getting a special rate for buying water at night martin yeah so mark i want to i appreciate the the opeb questions you bring up and they and we've heard them many times and you're raising them again here here today and uh i mean it's a

45. 55:00

    uh meaning for the budget if we're putting money in from water and sewer when the actuary doesn't require it even if it is to cover benefit payouts to keep the township off of a correction corrective action plan for me that's inappropriate uh lastly uh thank you for making the comment on interest you had 20 million dollars in cash that's at four percent that's for eight hundred thousand dollars lastly regarding tiered rates if we did actually have a tiered rate or even an evening rate from sakwa then we could look at other opportunities for savings we have a million gallon storage facility uh which we aren't buying water in the evening even though glee well offers lower rates uh and then letting it out into the uh township during the day so we aren't doing that and we're not getting a special rate for buying water at night martin yeah so mark i want to i appreciate the the opeb questions you bring up and they and we've heard them many times and you're raising them again here here today and uh i mean it's a it's a great question um and i want to talk a little bit about you know why i think it's we're doing the right thing and what the past process is so number one there is no adc that's been defined by milliman for the this last this current budget year which ends march 31st so there's no adc next year so water sewer is not making a monetary contribution to to the uh opeb um the 1.25 million that the township put in this year um you know it is goes into the trust by the way it's one trust um that's legally compliant everybody's in it everybody puts money in it And all the benefits are paid out of that one trust. But the 1.25 million that was scheduled this year comes from the general fund and public safety funds. And ultimately, we paid 2.5 million as was authorized by this board, which comes from general fund and public safety fund. Wasn't there any water and sewer funds that make those payments? The benefit payments did go out and when we get the report. Let me get to that, I was about to get to that. So then your question is, so one, there's no money going into it from water and sewer.

46. 56:15

    and we've heard them many times and you're raising them again here here today and uh i mean it's a it's a great question um and i want to talk a little bit about you know why i think it's we're doing the right thing and what the past process is so number one there is no adc that's been defined by milliman for the this last this current budget year which ends march 31st so there's no adc next year so water sewer is not making a monetary contribution to to the uh opeb um the 1.25 million that the township put in this year um you know it is goes into the trust by the way it's one trust um that's legally compliant everybody's in it everybody puts money in it And all the benefits are paid out of that one trust. But the 1.25 million that was scheduled this year comes from the general fund and public safety funds. And ultimately, we paid 2.5 million as was authorized by this board, which comes from general fund and public safety fund. Wasn't there any water and sewer funds that make those payments? The benefit payments did go out and when we get the report. Let me get to that, I was about to get to that. So then your question is, so one, there's no money going into it from water and sewer. As a structure of the system, all current benefits are paid with current funds, whether it's public safety or general or cable or water and sewer. That it's being handled consistently throughout every department that current benefits are paid through current funds. Why? Well, because the fund is so underfunded, we are working in a place where we're trying to accumulate assets into the fund. And that process has been ongoing for now well over a decade. We're making a really great progress. In fact, the corrective action plan, which we were under until just now, required us to make these contributions. The plan had two components. One was money from the current benefits were paid with current funds. And two, we were putting at least $1.25 million every year. So that corrective action plan. which was approved by the state required us to do that only this year now since we're not under the plan could we possibly entertain a different policy decision only this year well in the past it had to be that way if that's the direction you want to take water and sewer was paying in the benefit and an

47. 57:30

    So then your question is, so one, there's no money going into it from water and sewer. As a structure of the system, all current benefits are paid with current funds, whether it's public safety or general or cable or water and sewer. That it's being handled consistently throughout every department that current benefits are paid through current funds. Why? Well, because the fund is so underfunded, we are working in a place where we're trying to accumulate assets into the fund. And that process has been ongoing for now well over a decade. We're making a really great progress. In fact, the corrective action plan, which we were under until just now, required us to make these contributions. The plan had two components. One was money from the current benefits were paid with current funds. And two, we were putting at least $1.25 million every year. So that corrective action plan. which was approved by the state required us to do that only this year now since we're not under the plan could we possibly entertain a different policy decision only this year well in the past it had to be that way if that's the direction you want to take water and sewer was paying in the benefit and an actual error actuarially determined contribution 2018 2019 2020 2021 2022 2023 2024 through 2025 and that was never required by water and sewer to pay that in and what we found out was was because of the calculations and how we could get out of that corrective action plan that benefited the township it did not benefit the rate payers no I disagree I mean you're right that there were money money's going into it and they were never approved by the board and they were not included in the corrective action plan yes what what Milliman has been saying and when we can afford it put in more has been said the trust is single trust it's not to buy it up and to divide it up as a is a folly you know path so I think that where we're going is great however it is a good question because sometime soon we may want to look at this and do it differently at some

48. 58:45

    direction you want to take water and sewer was paying in the benefit and an actual error actuarially determined contribution 2018 2019 2020 2021 2022 2023 2024 through 2025 and that was never required by water and sewer to pay that in and what we found out was was because of the calculations and how we could get out of that corrective action plan that benefited the township it did not benefit the rate payers no I disagree I mean you're right that there were money money's going into it and they were never approved by the board and they were not included in the corrective action plan yes what what Milliman has been saying and when we can afford it put in more has been said the trust is single trust it's not to buy it up and to divide it up as a is a folly you know path so I think that where we're going is great however it is a good question because sometime soon we may want to look at this and do it differently at some soon we're going to hit the 40% rate of a funded rate at that point is probably a great time to think about maybe we should be you know using some of the trust fund to pay current benefits and also this fall we'll get a new actuarial report to tell us where we are and that's another great opportunity to look at this and decide what what to do but presently the actuarial has no contribution for this year and the overall practice is that all current benefits are paid from current assets because we're trying to build accumulations in the trust which sadly weren't properly funded long time ago so we're in a bad spot because of that but it's a conservative budgeting process and we are making great progress on the overall value of the of the fund and I I did have a quick communication that went to me from from our Gatsby folks that looked at this and if we just simply took building and cable and water we just took those and said we're going to treat them differently than everybody else and can pay those benefits from from the trust it would reduce the path to 40% and 100%

49. 1:00:00

    soon we're going to hit the 40% rate of a funded rate at that point is probably a great time to think about maybe we should be you know using some of the trust fund to pay current benefits and also this fall we'll get a new actuarial report to tell us where we are and that's another great opportunity to look at this and decide what what to do but presently the actuarial has no contribution for this year and the overall practice is that all current benefits are paid from current assets because we're trying to build accumulations in the trust which sadly weren't properly funded long time ago so we're in a bad spot because of that but it's a conservative budgeting process and we are making great progress on the overall value of the of the fund and I I did have a quick communication that went to me from from our Gatsby folks that looked at this and if we just simply took building and cable and water we just took those and said we're going to treat them differently than everybody else and can pay those benefits from from the trust it would reduce the path to 40% and 100% funding by 10 to 15% means that's again an estimate based on what's happening now you know so that's a you significant change. And I just don't think we want to compromise the path we're on to be conservatively and as quickly as possible, bring the OPEB trust fund into a funding level that's appropriate. So how is a funding level for water and sewer over 100% funded and appropriate? It's one trust. To look at it separately doesn't make any sense. Well, then maybe we should consider removing the three fully funded trusts. Well, that will increase costs. It will increase costs which will increase rates and we don't want to do that, right? The benefit payments are in excess of $350,000 for those three funds. That's the benefit payment. So when you say an increased cost, what costs are actually going to go up? What goes up is that by having smaller funds to invest, we'll get lower returns and higher investment fees.

50. 1:01:15

    pay those benefits from from the trust it would reduce the path to 40% and 100% funding by 10 to 15% means that's again an estimate based on what's happening now you know so that's a you significant change. And I just don't think we want to compromise the path we're on to be conservatively and as quickly as possible, bring the OPEB trust fund into a funding level that's appropriate. So how is a funding level for water and sewer over 100% funded and appropriate? It's one trust. To look at it separately doesn't make any sense. Well, then maybe we should consider removing the three fully funded trusts. Well, that will increase costs. It will increase costs which will increase rates and we don't want to do that, right? The benefit payments are in excess of $350,000 for those three funds. That's the benefit payment. So when you say an increased cost, what costs are actually going to go up? What goes up is that by having smaller funds to invest, we'll get lower returns and higher investment fees. And lower returns means we have to increase our contributions of actual dollars. It's fully funded. We're talking about the fully funded. It's only momentarily fully funded. This is a prediction out many years of lots of variables. Right now the market's going in a direction none of us like. That's going to change these funding ratios dramatically. And if we don't be conservative, then we're going to get ourselves another hole. And thank you for confirming that we overcharge water. sure to pay in the ADC when it was never required. Don't make statements like that. There's an appropriate charge to maintain the trust fund. No, I just think we're done. Okay. Any other comments or questions? No. Okay. All right. Thank you, Noah. Thanks, Noah. Thanks a lot. Thanks, Raftelis. Thank you. That's still there. Okay. All right. So we'll move for adjournment, and we'll see you in a half hour. I would make a motion that we adjourn. Thank you. All in favor, say aye. Aye. Good. Thank you.