1. Village of Almont WATER, SEWER, AND SSO RATES 2012 – 2013 FISCAL YEAR

2. WATER & SEWER RATES  There are six basic goals used when setting utility rates: Collect the money necessary to maintain the water and sewer systems. Collect the money necessary to maintain the water and sewer systems. Collect these funds as fairly as possible. Collect these funds as fairly as possible. Ensure each system is self-sufficient. Ensure each system is self-sufficient. Prevent a situation in which the Village incurs debt. Prevent a situation in which the Village incurs debt. Prepare for vital infrastructure needs that extend the service life of the water and sewer systems. Prepare for vital infrastructure needs that extend the service life of the water and sewer systems. Ensure the protection of public health, safety, and welfare and compliance with environmental regulations. Ensure the protection of public health, safety, and welfare and compliance with environmental regulations.

3. What happens when rates are not sufficient to cover expenses?  Proper maintenance will not be performed, reducing the lifespan of system infrastructure and increasing long- term operating costs.  Financial risk to the Village and taxpayer is increased, since general fund revenues, which fund police protection services and other administrative functions, must be used to compensate for any shortfall in the water and sewer systems.  Service quality can be disrupted and the health, safety and, welfare of Village residents may be threatened if infrastructure needs are ignored.

4. RECOMMENDED FUND LEVELS CASH ON HAND 1-2 BILLING CYCLES RESERVE FUNDING 1 YEARS BUDGET VILLAGE OF ALMONT WATER SYSTEM CURRENTPROJECTIONRECOMMENDED CASH ON HAND $19,200$200,000.00 RESERVE FUNDING $10,800$440,000.00 Previous cash on hand amount was -$15,000.00 for the water system. VILLAGE OF ALMONT SEWER SYSTEM CURRENTRECOMMENDED CASH ON HAND $78,000.00$200,000.00 RESERVE FUNDING $0.00$500,000.00

5. VILLAGE OF ALMONT WATER SYSTEM

6. History of DWSD Increases   The Detroit Water and Sewerage District has applied several increases to the cost of water purchased by the Greater Lapeer County Utilities Authority. These increases include the following: 2012 – 2013 Fiscal Year-Roughly 10% Increase 2011 – 2012 Fiscal Year-Roughly 10% Increase 2010 – 2011 Fiscal Year- Roughly 15% with new fixed charge 2009 – 2010 Fiscal Year-Roughly 20% Increase DWSD instituted their fixed charge during the 2010 – 2011 fiscal year and has increased it by over 375% since that time. DWSD’s continued practice of increasing the fixed charge means that even if the Village sells less water it is obligated to pay more to DWSD for water costs.

7. GALLONS PURCHASED BY THE VILLAGE FROM DWSD AND GALLONS SOLD TO RESIDENTS FROM THE VILLAGE Year GALLONS PURCHASED GALLONS SOLD 2012 – 2013 Est. 77,700,000 Est. 77,700,000 Est. 58,600,000 Est. 58,600,000 2011 - 2012 Est. 78,000,000 Est. 78,000,000 Est. 60,000,000 2010 - 2011 86,541,000 86,541,000 63,110,615 63,110,615 2009 - 2010 58,364,250 58,364,250 62,688,335 62,688,335 2008 - 2009 52,210,500 52,210,500 The main water meter used by the Detroit Water and Sewer District had previously miscalculated the amount of water the Village was purchasing. When the main water meter was recalibrated in early 2011, this increased the volume of water the Village must purchase, and pay for, on an annual basis [this explains the significant increase in gallons purchased between 09-10 and 10-11]. Table below based on 905 system users. A 2.3% decrease is planned for consumption between 7/12 and 6/13.

8. Cost Liabilities   The following cost liabilities, in addition to general operating costs, will exist for the water enterprise system during the next fiscal year: $30,000 in additional projected charges that the Village will be required to pay to DWSD. $20,000 in projected additional costs that will be required for the repair and replacement of several components of the Glover Road Booster Station. $5,000 that is being designated for implementing a more robust preventative maintenance program.

9. Water Rate for the 2012 – 2013 Fiscal Year   In consideration of these cost liabilities, the water rate for the 2012 – 2013 fiscal year has been adjusted so that the fixed charge will increase from $25.00 per billing quarter to $30.00 per billing quarter and the consumption charge will increase from $4.75 per 1,000 gallons to $5.25 per 1,000 gallons.

10. PROFIT AND LOSS CASH HISTORY YearREVENUEEXPENSES PROFIT / LOSS 2012 - 2013 $ Est. 437,550 $ Est. 437,550 $ Est. 435,040 $ Est. 435,040 $ + 2,510 $ + 2,510 2011 – 2012 $ Est. 394,000 $ Est. 394,000 $ Est. 374,000 $ Est. 374,000 $ +20,000 $ +20,000 2010 – 2011 $ 291,000 $ 291,000 $ 370,000 $ 370,000 $ (79,000) $ (79,000) 2009 – 2010 $ 290,885 $ 290,885 $ 349,884 $ 349,884 $ (58,998) $ (58,998) 2008 – 2009 $ 304,464 $ 304,464 $ 347,794 $ 347,794 $ (43,331) $ (43,331) 2011 – 2012 figures are based on estimated figures on 6/8/2012; 2012 – 2013 figures are projections based upon the proposed operating budget.

11. Water Loss Control   The Almont DPW has taken aggressive steps to control water loss and it is estimated that they have successfully prevented the loss of 4,000,000 gallons over the course of the past year. This has resulted in a net savings of $8,080 to the Village and has helped to keep water rates down by approximately $0.14 per 1,000 gallons [this equates to about a 0.8% impact for the average system user]. These water loss control activities will continue in full force for the 2012 – 2013 fiscal year.

12. ALMONT SEWAGE SYSTEM

13. Sewer History Year GALLONS CHARGED 2012 – 2013 Est. 53,500,000 Est. 53,500,000 2011 - 2012 Est. 54,570,000 Est. 54,570,000 2010 - 2011 56,914,000 56,914,000 2009 - 2010 57,508,000 57,508,000 2008 - 2009 57,750,000 57,750,000 The following table details the gallons charged for sewer use within the past four fiscal years and estimates the gallons that will be charged for the upcoming fiscal year. It is based upon 905 system users and plans for a roughly 2.0% decrease in the upcoming fiscal year.

14. Cost Liabilities  The proposed 2012 – 2013 annual operating budget includes a sewer rate increase from $25.00 fixed and $7.23 per 1,000 gallons to $27.00 fixed and $7.95 per 1,000 gallons in order to pay for three major capital improvement projects: The upgrade of the East St. Clair lift station [which will help to prevent sewer back-ups in the eastern portion of the Village]. The upgrade of the East St. Clair lift station [which will help to prevent sewer back-ups in the eastern portion of the Village]. The maintenance/replacement of the tertiary treatment system at the treatment plant [which will allow the plant to meet its DEQ permit requirements and avoid environmental violations and fines. The maintenance/replacement of the tertiary treatment system at the treatment plant [which will allow the plant to meet its DEQ permit requirements and avoid environmental violations and fines. The repair of the treatment plant roof [which is needed to protect the sensitive equipment inside of the treatment plant]. The repair of the treatment plant roof [which is needed to protect the sensitive equipment inside of the treatment plant].

15. Sewer Rate for the 2012 – 2013 Fiscal Year   In consideration of these cost liabilities, the sewer rate for the 2012 – 2013 fiscal year has been adjusted so that the fixed charge will increase from $25.00 per billing quarter to $27.00 per billing quarter and the consumption charge will increase from $7.23 per 1,000 gallons to $7.95 per 1,000 gallons.

16. PROFIT AND LOSS CASH HISTORY YearREVENUEEXPENSES PROFIT / LOSS 2012 – 2013 Est. $524,700 Est. $524,100 Est. $600 2011 - 2012 Est. $475,000 Est. $455,000 Est. $20,000 2010 - 2011 $445,938$394,700$51,238 2009 - 2010 $437,171$404,000$33,171 2008 - 2009 $430,752$426,949$3,803

17. SSO Charge  In late 2011 the Village refunded the bonds it issued for the completion of the equalization tanks at the treatment facility in 2002. This allowed the Village to decrease the SSO rate from $2.52 per 1,000 gallons to $1.75 per 1,000 gallons for the 2012 – 2013 fiscal year.  The refunding of these bonds by the Village Council and staff prevented all of the utility rates for the 2012 – 2013 fiscal year for the average system user from being raised by an additional 4.4% and saved the average system user $53.90 a year in additional costs.  SSO revenues are calculated by multiplying the SSO charge by the number of sewer gallons charged.

18. Percentage Impact for System Users Based on Consumption   This table illustrates the impact of the rate adjustments on system users, based on quarterly consumption: ConsumptionOld BillNew BillChange% Change 5,000 gallons$122.50$131.75$9.257.55% 10,000 gallons$195.00$206.50$11.505.90% 15,000 gallons$267.50$281.25$13.755.14% 17,500 gallons [Average User] $303.75$318.63$14.884.90% 20,000 gallons$340.00$356.00$16.004.71%

19. Community Collaboration  The Village wants to hear ideas as to how rates can be decreased or how bills could be lowered in a fair manner. At any time feel free to contact Village Manager Oliver Turner at (810) 798-8528 and he will investigate each idea and follow-up with the individual who suggested it. At any time feel free to contact Village Manager Oliver Turner at (810) 798-8528 and he will investigate each idea and follow-up with the individual who suggested it.