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Washington Township 2018-2019 Budget Proposal
March 21, 2018
Board of Trustees
Our Principles
1. Preserve the rural character of our community
2. Operate in an equitable manner
3. Manage in a fiscally responsible manner
4. Provide friendly, respectful service
5. Promote a favorable business environment
6. Demonstrate the highest ethical standards
Agenda
• Year In Review
– Financial Goals
– Emergency Services Goals
– Infrastructure Goals
– Customer Service / Other Goals
• Major Influencing Factors
• Goals for the Coming Year
• Budget Overview
Goals Pursued - Financial
Goal Outcome
Collective bargaining with 4 UAW unions Commenced and continuing including IAFF one year early
Sell non-strategic land after rezoning by the PC
Offering pending on 43 acres and 5 acres; Rezoned Jewell to R1B 60 units
Re-evaluate W/S rates after getting County/GLWA increases
Done – 0% for water and 4.9% sewer due to sinkhole costs
Evaluate the impact of the SINKHOLE
Done – incorporated in rates
Community Center Feasibility Teams formed; architect deployed
Solid audit results Another solid year and clean opinion
Goal Pursued – Financial Results
• 2016/2017financials received a clean opinion from Plante Moran:
– Continued focus on infrastructure and service over bureaucracy
– Increased net position since 2009 despite taxable value remaining below 2009 levels – AA BOND RATING!
– Washington compares favorably to neighbors in net position as a percent of expenses for governmental activities.
– Continued aggressive cost management
• Staffing levels responsive to economics
• Reasonable cost structure per employee
• 2017/2018 Not yet complete but proceeding as anticipated
Surplus Fund Balance
Governmental Funds $ 239,174 $22,138,820
Enterprise Funds $1,855,052 $58,901,716
Total $2,094,226 $81,040,536
Township Taxable Value vs Net Position
20
22
24
26
28
30
32
34
36
1,000
1,050
1,100
1,150
1,200
1,250
1,300
1,350
1,400
1,450
1,500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Taxable Value 1,315 1,260 1,155 1,122 1,088 1,113 1,146 1,200 1,241 1,374
Net Position 25.523 26.202 29.634 30.827 31.438 32.087 32.624 34.062 34.968 35.000
Taxable value has
rebounded from
the real estate
crash with the
help of new
construction.
Despite the 10
year drought, our
net position
(health) has
improved steadily.
Net Position as a % of Most Recent Year Costs For Governmental Funds
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
2010 2011 2012 2013 2014 2015 2016 2017
Washington (3/31) 270% 305% 317% 324% 330% 336% 351% 360%
Shelby (12/31) 202% 202% 195% 193% 191% 144% 146%
Bruce (3/31) 155% 148% 106% 91% 80% 64% 59% 38%
Romeo (6/30) 89% 79% 65% 39% 16% -41% -57% -50%
Operating with a Low Millage Rate
But Keeping Property Values High
-
50,000
100,000
150,000
200,000
250,000
300,000W
ash
ingt
on
To
wn
ship
Mac
om
b T
ow
nsh
ip
Shel
by
Tow
nsh
ip
Bru
ce T
ow
nsh
ip
Ray
To
wn
ship
Arm
ada
Tow
nsh
ip
Ric
hm
on
d T
ow
nsh
ip
New
Bal
tim
ore
Ch
este
rfie
ld T
ow
nsh
ip
Ster
ling
Hei
ghts
Mac
om
b C
ou
nty
Ave
rage
Har
riso
n T
ow
nsh
ip
Clin
ton
To
wn
ship
Ric
hm
on
d
Uti
ca
Len
ox
Tow
nsh
ip
Fras
er
St C
lair
Sh
ore
s
Mem
ph
is
War
ren
Mt.
Cle
men
s
Cen
terl
ine
Ro
sevi
lle
East
po
inte
Source: 2017 Equalization Report Excludes 40 homes in the Lake Township portion of Grosse Pointe Shores on the very south end of Macomb County at $618,375; note that villages are combined with townships in this presentation.
Washington’s
approach to
development and
building a great
lifestyle has helped
us maintain the
highest property
values in the County.
Staffing Comparison
2008 Current Proposal
General 20 FT 1 PT 16 FT 1 PT 16 FT 1 PT
Fire/Ambulance 27 FT 15 POC 27 FT 9 POC 27 FT 13 POC
Public Works 13 FT 1 PT 12 FT 1 PT 15 FT 1 PT
Building Inspection 6 FT 2 POC 6 FT 7 POC/PT 6 FT 7 PT/POC
Total 66 FT 19 PT/POC 61 FT 18 PT/POC 64 FT 22 PT/POC
We continue at lower staffing vs 2008 despite the economic recovery and
despite having 1/3 MORE residents to serve.
The 2nd year of this budget will add 3 FT firemen for new station
Today assumes open accounting position (General) and engineer/inspector (PW) filled
Engineer and Insp in PW as home in proposal column as well as 2 new utility (camera/meters); Today is just Engineer/Insp
Floaters shown in their home dept. Elected shown in General
Staffing Cost Structure
2008 Now
Union CBA’s 7 6
Legacy $7mm unfunded; $1mm/yr after Permanently eliminated
Retirement Out of market Reduced by 7%-46%
Salary Some positions out of market Cut up to $10k – tier 2
Medical No responsibility; high cost Shared / mitigated cost
Time Off Out of market Reduced (tier 2)
COLA Auto Cola – no incentives Some incentivized
Clerical Probation 3 months 2 years
Flexibility to shift Limited Broad
Other New hires get same benefits Tiered
We reduced the cost per employee, not just the number of employees.
This budget assumes the same contracts plus COLA.
Goals Pursued – Emergency Services
Goals Outcome
COMTEC Conversion Done – EMD recently in; reasonable priority guidance; reporting issues
Fire station land and initial design Acquired 2 parcels; not yet designed
Install 3-5 “dry hydrants” Still working through challenges; 1 new project going in with hydrant
Re-deploy fire resources Done
CAD Units in trucks Maps, building footprints, hydrants in
Hose purchases This traunch is done
Ambulance remount Done
Goals Pursued - Infrastructure
Goals Outcome
Garland parking lot (finalize) Lot complete; ticket station outstanding
3 Miles of limestone Done – Schoennher 26 to 29 Mile
Township lot (punch list) Done
Sewer plant construction Underway – complete in < 12 months
Acquire a backhoe Postponed
Election equipment Done
Pursue strategies to generate economic activity in Van Dyke corridor (sewer)
2 SADs circulating (TWP may do one)
Goals Pursued – Infrastructure, continued
Goals Outcome
GIS – incorporate storm sewer Postponed (potentially indefinitely)
Continue sewer integrity efforts Asset mgt strategy devised - $1mm each year (Hayes Rd $1.8mm plus grouting and pipe repair) and new camera truck
Pursue replacement of older water meters
Replaced 315 meters this year
Next phase of sidewalks
Proposal before board for West; Octagon repair pending; meeting Breckinridge
North side windows, vestibule improvements, board table, LED sign, sound system, and chairs
Postponed
Potentially internal road and water lines for community center
Postponed – CC teams now meeting
Goals Pursued – Customer Service
Goals Outcome
Issue Master Plan
Hearings held, neighboring communities and agencies solicited, awaiting PC
Invasive Species Efforts
Grant assistance received and spent for Macomb Trail (4X), Campground Y, Meijer, Twp properties; AF Jonna; Willow Ridge and Trailside (they paid for cut)
Conclude on monthly vs quarterly water bills
Postponed
Improved communications bi-annually with the public
Issued 4 communications to date
Planning and Zoning software
Proposal before the board tonight
Manage development Another challenging year – see list
Development Issues Impacting Planning, Public Works and Building
Commercial/Industrial
Total Soccer Proline Asphalt Radio tower
Go Ape/Baypoint/Boat launch
TBD Industrial Bldg Romeo High
Washington Landing PUD Vanessa Center Mods Gemelli Concrete
Capital Pointe Office Trailside Ice cream Van Dyke Retail
Newberry Commercial Mines (brownfield, etc) Orchard Ridge Church
Cavataio Center Michaelangelo (Dinoto)
Development Issues Impacting Planning, Public Works & Building
New Residential
Newbury On the Green
7 Lakes Expansion (3)
Kirkway Expansion
Washington Creek PUD
Wood Duck Court
Washington Landing PUD (residential)
Township Acreage (43 acres)
Powell Ridge
Forest Brook
White Oaks
Meadowland
Veridian
Ongoing Residential
Park Avenue
Bradbury
Glacier Club
Greystone Estates
Orchard Brook
Orchards Hillcrest
Franklin Park (including drainage issues)
Stonecrest
Accessory Structure Amendment
CCN and Hidden Pond drainage issues
Goals Pursued - Talent
Goals Outcome
Continue to recruit POC/PT Ongoing battle
Hire engineer/inspector Postponed to this next budget
WS Field Hires Done
Other Accomplishments
Authorized new pumper GLWA amendment Drone
DPW/Fire trailers Policy to finance utility expansions
Comment policy
Stretchers Water asset mgt plan authorized
Managed dewatering issues and added 26 customers at Powell
AT&T settlement Managed sinkhole comms and legal decisions
Upgraded fire code
Fire Chief contract WBRW anniversary and continued improvement
Held emergency drill
Waste events Fire grants (Gloves/Foam) Metropark relationship
Parking lot light repair and sealcoating
PC, ZBA, Library/BOR appts Updated Engineering Ordinance
Other Accomplishments, continued
Began sign ordinance review
Commenced Community Center teams
Partnered with Octagon on silo drill
Federal Investigation
Federal Investigation
• The Federal investigation was known to limited persons in Washington Township offices who had initiated some of the probe.
• It has been a substantial drain on intellectual capital and operations for years.
• The ongoing Federal Investigation has so far netted 19 persons.
• It is far from over as is the backlash against those who helped.
• Clinton Trustee Dean Reynolds
• Chesterfield Supervisor Mike Lovelock
• Macomb Trustee Clifford Freitas
• Macomb Trustee Dino Bucci
• New Haven Trustee Chris Craigmiles
• New Haven Trustee Brett Harris
• Detroit Deputy Poice Chief Ceila Washington
• GWE Engineer Paul Modi
• GWE Engineer Jim Pistilli
• Washington PWD Steve Hohensee
• Shelby Engineer Fazal Khan
• Motor City Rep Robert Maechtle
• Chuck Rizzo (trash)
• Charles Rizzo (trash)
• Chris Sorrentino (Macomb contractor)
• Angelo Selva (attorney)
• Quinton Ramanauskas (Rizzo)
• Derrick Hicks (trash)
• Gasper Fiore (towing)
Background Factors Impacting 2018/2019
• Property Values
• Federal initiatives on tax reform and infrastructure
• State budget impact on revenue sharing (assumed 2% increase) or cost pushdowns
• CBA impacts (none assumed other than inflation)
• Sewer system expansion
• Fire expansion
• Commercial market uncertainty
• Priority balancing given financial and intellectual resource limitations
• Significant infrastructure spend
• Interest rate changes
• Continued population migration
• The Federal investigation
General Fund Profit (Excluding Transfers)
(200,000)
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,0002
00
8
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
P
20
19
B
20
20
B
03/2017 is the last “actual” year available. 03/2018 is conservatively projected. It is lower than budget due to the lack of a land sale but that is offset by less sidewalk and other capital spending than anticipated. 03/2019B assumes the 43 and 5 acre land sales. Without the land sales, the 03/2019 would be $102k loss due to significant capital investments (West Road sidewalk alone is $200k). 03/2020 is positive but bears a $300k investment in sidewalk near Hevel.
General Fund Revenue Trends We’re Finally Recovering BUT with MORE People to Serve
791
817
783
708 697
675 690
714
763 773
800
845 858
550
600
650
700
750
800
850
900
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18P
20
19B
20
20B
Property Tax Revenues Due to State law, the dramatic
decline in property values is not
reversed by subsequent dramatic
increases for existing, unsold
properties. Taxable value increases
are capped at inflation plus
additions.
We are finally drifting back to 2009
tax revenue levels due to market
recovery PLUS significant
development.
During the downfall, we avoided tax
increases through cost controls
despite inflationary cost increases
and additional clients to serve.
General Fund Revenues Other Trends
0
200
400
600
800
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
P
20
19
B
20
20
B
Interest Revenues
0
200
400
600
800
1000
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
B
20
19
B
20
20
B
Other Revenues
0
500
1000
1500
2000
2500
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
B
20
19
B
20
20
B
Revenue Sharing
Lower interest
absorbed thru cost
control measures.
Interest rates,
improved savings,
and change in
approach is
improving interest.
The census will help
SRS which helped
mitigate some
revenue losses since
‘08. However, we
have more people to
serve. Estimates are
conservative.
Other revenues
exclude the land
sale and cable fees.
They are lower due
to lack of
Romeo/Bruce fees,
lower SADs, and
grants.
General Fund Expenses
2018B had a number of budget items that increased costs. We postponed the costs for another year, driving up 2019B costs. Key items included in 2019:
• Board room
• Vestibule
• Paint
• Sign
• Windows
• Planning software
• Legal for CBAs, etc.
• Sidewalks (see left)
0500
1000150020002500300035004000
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
P
20
19
B
20
20
B
Red line is
2008 inflation
adjusted by
1.5% per year.
All other than
‘09 expense
would be
>$300k more if
OPEB not cut
West Road sidewalk ($200k) in
2019 and Hevel ($300k) in 2020 vs
generic $100k (not spent ) in 2018.
Improvement Revolving
2019 2020
Powell area road 2,750,000 1,650,000
3 miles of limestone 30,000 30,000
Planner & Architect 100,000
TIP or microsurfacing 50,000 200,000
Watershed Training 600 600
Engineer 5,000 5,000
NPDES permit 500 500
PEP assistance CRWC 1,800 1,800
Workshop 500 500
Mac Orch Trail 5,000 5,000
Dry Hydrants 28,000 28,000
Siren Main 4,500 4,500
Total Estimate 2,975,900 1,925,900
Figures assume no SAD for the road project and also do
not consider our share of a sewer line SAD.
Police Trends Revenue and Expense In Sync
0
500
1000
1500
2000
2500
Rev
Exp
Rev 1237 1259 1176 1177 1111 1081 1081 1133 2341 2084 2189 2183 2226
Exp 834 863 868 869 851 981 1005 1200 2017 2052 2094 2129 2213
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018B 2019B 2020B
New Deputy added Nov 2011
Doubled to 14 Jan 2015 following millage increase
Fire and Ambulance Income / Loss History
(2,000,000)
(1,500,000)
(1,000,000)
(500,000)
-
500,000
1,000,0002
00
9
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
B
20
19
B
20
20
B
Income Income history is driven by major capital expenditures
- Fire station (3/11) - Tanker (3/17) - Dispatch/CAD (3/18) - New Station land (3/18) - Ambulance remount and
hose (3/18) - Engine (3/19) - Tanker (3/20) - New Station (3/19 and
3/20) - 3 New FT – (3/20)
Fire / Ambulance Revenues
2008 2009 2010 2011 2012 2013 2014 2015 2016 20172018
B2019
B2020
B
Tax 4244 4297 4060 3650 3590 3490 3575 3696 3913 4273 4422 4888 4986
Amb Fee 315 388 452 498 445 529 589 521 538 538 520 500 500
Grants 13 44 0 1436 180 34 43 16 148 2 0 0 0
Int/Other 324 442 54 67 43 58 101 4 58 104 49 94 94
0
1000
2000
3000
4000
5000
6000 Taxes hurt by the market decline
finally rebounding due to new
construction. But now we serve
more people.
Amb. fees are uncertain. Interest
also is insignificant. Both were
estimated conservatively.
To maximize value to customers, we
rebalance emergency millages each
year based on where the capital
spend needs are without increasing
taxes.
Fire and Ambulance Expenditures
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018B 2019B 2020B
Exp 3574 4430 4273 6726 4443 3613 4009 4230 4159 4816 5162 7113 6579
0
1000
2000
3000
4000
5000
6000
7000
8000- Fire station (3/11)
- Ambulance
10/12/14/15/16/17/18/19
- Tanks (Grant) bought in 2015.
- 3 new paramedics in 2016
- Tanker (3/17)
- Dispatch/CAD (3/18)
- New Station land (3/18)
- Ambulance remount and hose
(3/18)
- Engine (3/19)
- Tanker (3/20)
- New Station (3/19 and 3/20)
- Additional staffing in 3/20
OPEB was only in 2009; would be
> $350k/yr if not cut)
Why Invest in Personnel and Stations
• Run Count is up 29% since 2009.
• Influx of development and senior living creates a need.
• We were DOWN staff prior to last hires since ‘08.
• Counting brass, we have 1 FF per thousand residents. Bruce/Romeo were at 1.8 per 1,000.
• Every 3 hirings raise costs $200-400k over time.
0
1000
2000
3000
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Runs
Runs
Manpower Factors:
Only 28% hydranted
Metropark (2mm visitors/yr)
We transport
36 square miles
M53 split
Home compostion –petrochem
Age and existence of assisted living
Fire Department Cost Mitigation Efforts
• Split various Coordinator positions between shifts
• Created a shifted part-time role with cooperation from unions.
• Expanded mutual aid to automatic mutual aid for fires to increase resources.
• Improved tech for report processing to reduce man hours.
• Eliminated Clerical Position
• CBA Concessions:
– OPEB eliminated
– Some COLA shifted to bonus
– Reduced retirement
– Increased staff medical cost
– Restructured new hire pay
• Shifted to ambulance remounting
• Merged Fire Marshall and Assistant Fire Chief (till 2019)
• Now using COMTEC to free staff
Health Governmental Fund Balances
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017201820192020
Police
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2008200920102011201220132014201520162017201820192020
General and Other
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fire/Amb
Health is strong. Aggressive spend
(for parking lots, roads, tanker,
ambulances, station, etc) will reduce
fund balances somewhat. We still
have > 1 year in reserve for General
1.5 for Fire/Amb and 2 for Police.
Note that you need 70% of budget
to cover timing.
Enterprise Funds
Enterprise funds are government run businesses:
– deliver services not done best by private enterprise
– no taxing authority or use of taxes
– generate revenues from fees for the services
– recover their cost of capital expenditures over time
– Cannot be supported by tax $.
Building Fund Fees
• Charges fees for reviewing building plans and inspecting construction.
• Revenues from:
– Plan review fees
– Bldg. inspection fees
– Electric inspection fees
– Plumbing inspection fees
– Mechanical inspection fees
• Expenditures are primarily for personnel
• We turned this fund around by:
– Use of paid on call
– Pay freezes
– Staff reductions at key times
– Elimination of Opeb ($1mm liability and $114k per year)
– Absorbing other activities
– Significant CBA concessions.
Building Fund Major Assumptions of Budget
• 175 Residential new home permits
• $70k of Commercial permits
• 425 Misc Building permits
• Building Official has help of Facility Mgr and OE officer and Engineer
• Continued POC model for Plumbing, Mechanical, Electrical
• 3 Clerical plus a part timer
• Many cost risks are revenue dependent
• Capital for field PCs
Building Fund Revenue/Expense Trend
-75-249 -295
-75
72187 160 237 293
425 385270 254 247
-500
0
500
1000
15002
00
7
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
P
20
19
B
20
20
B
Revenue
Expense
Net Income
Had OPEB not been cut out, profits would be reduced by $100k/yr or more.
Note that, due to market uncertainty, we typical budget this fund
conservatively. Revenues for the current year are projected to be
almost $200k higher than plan as is net income. The next two years
are planned based on 175 housing units.
Building Fund Permit Trend
0
100
200
300
400
500
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
P
2019
B
2020
B
Com
Res
Peak residential building was 422 in 2000. Low since was YE 3/31/2010. 2018P was budgeted at 175 homes and we have 167 with 2 weeks left. 2019B and 2020B assumes 175 residential each.
Profitability is largely maintained by cost
flexibiilty down to 100 residential permits.
Building Fund Fund Balance
-1000
0
1000
2000
3000
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
P
20
19
B
20
20
B
Fund BalanceFund Balance was $1mm worse than shown here prior to eliminating unfunded OPEB. Note that in addition to having negative equity AND a $1mm unfunded liability, this fund owed several hundred thousand to the General Fund. It now has no legacy, debt or negative equity – a > $3mm swing!
Low point was $100k negative equity plus $1mm
OPEB liability plus several hundred thousand of
debt to the General Fund in 2010
Water and Sewer Fund
• Delivers water and transports sewerage for 6,045 “accounts” or approximately 20,000 “People” by DEQ standards.
• Revenues from:
– per unit charges
– fixed meter charges
– contributed pipe
– tap and capacity fees
– interest
– Permits/Inspection fees
– Grants
• Expenditures for: – Pass-through cost of GLWA
for water (fixed and variable)
– Pass-through cost of GLWA, Macomb County, and Macomb Township for downstream sewer transport
– Infrastructure, mostly within the township (lines, pump stations, meters, trucks, remote readers, etc.)
– Field personnel
– Administration
Water and Sewer Key Infrastructure
Sewer System • 390,842 feet of sanitary sewer
main (74 Miles)
• 5 pump stations
• One meter pit
• Sewer plant (pending)
• 3% “ownership” of 11 member district assets
Water System • 515,338 feet of water main
(97.6 Miles)
• Water storage facility (1.5mm g)
• 2 booster stations
• 2 GLWA meter pits
• 7 pressure reducing valves (PRVs)
• Meters / remote reading devices
Water and Sewer Active Accounts Trend
0
2000
4000
6000
8000
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
Accounts
Customers
Water Only 588
Water & Sewer 5,237
Sewer Only 220
Total Accounts 6,045
RN
*excludes all Sprinkler accounts
96%
4%
Residential
Non Residential
Accounts
DPW Specific Key Drivers
• Economic development of north end through sewer project
• New rates from GLWA/County for water and sewer (estimated to be 3.1% and 7.5%).
• Development projects underway and in infancy
• System maintenance / System Integrity
• Aging meters
• Lead and copper rules
PW Budget Assumptions Water
Water Purchases – Assumes we buy 73,800 MCF
based on GLWA projections for Yr 1. The 5 year average is 72,200.
– The purchase commodity and fixed rates for Yr 1 are based on the weighted average published rates for the year from GLWA
– The purchase commodity and fixed expense for Yr 2 are inflated at 3%
Water Sales – Assumes we sell 73,800 MCF
based on GLWA projections for Yr 1. The 5 year average is 72,200.
– The sales rate assumes no change in volumetric rate for either year.
– We assume a 3% growth on fixed charges due to new customers each year.
PW Budget Assumptions Sewer
Sewer Purchases
• Based on 5 year average of our flows vs total, we pay 2.807% of the County costs
• We use their projection of a 7.5% increase for the last 9 months of Yr 1 over current charges.
• Year 2 includes a 5% expense increase.
Sewer Sales
• Both fixed and variable revenues are assumed to be increased in Yr 1 by 8% over the projected year end 3/31/18.
• This % is due to growth assumption of 3% and rate increase of 5%.
• Year 2 we increased both fixed and variable by 5% (higher than water because we assume water RATE increases are frozen and they only experience growth).
Other Key Assumptions
• Staff - 1 PW Director, 8.5 Field, 4 clerical, and ½ Engineer ¾ inspector
• Maintain focus on significant maintenance and capital
• Plant - built by year end. Operator hired in August. Hauling starts Jan 2019 through end of year 2.
Why Are Water Rates Higher Here?
GLWA sets rates based on 3 factors –
• distance from plant (we are far)
• Elevation (we are high)
• usage during peak times (we are a bedroom community).
Washington prefers lower density development so has a higher infrastructure cost PER CUSTOMER because a mile of water main in another community might be borne by many more homes than it is in our town. That is a cost we bear for our lifestyle choice.
0
2
4
6
8
10
5 Year AverageIncrease Pre-
Storage
2016 2017
% Increases Passed to Customers Before Vs After Building a Water Storage Facility
Zero
The Water Storage
Facility Is Benefiting
Customers
Investments Paying Off for Residents
Water and Sewer Income
Overall income of $3mm for YE 2019 and $2.3mm for 2020. The net income includes contributed pipe (not cash) which, for each of the two years, is less than the total income. We need to cover bond principal of $811k per year over 20 years. Note that Opeb would have hurt by $200k per year if not cut. -1000
-500
0
500
1000
1500
2000
2500
3000
3500
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
B
20
19
B
Income
Pipe
TRUE
Major Capital Initiatives 2019 2020
Waste Water Treatment Plant 11,163,565
Water Main Extension on West Side 1,000,000 1,000,000
Hayes Road Pump Station Rehab (1976) 900,000 900,000
Sewer Line to 31 Mile 875,100
30.5 Booster Station Rehab (1995) 300,000
Transit Truck for Sewer Televising 250,000
Contracted Sewer and Manhole Replacement 100,000
Meter Change Out Program 86,000 90,000
Worksite Pro 45 Incompact Track Loader (Skid Steer) + Trailer79,000
Scada System Upgrade (60/40 W/S) 50,000
Upgrade to Mega Net Collection System (MTU Tower) 49,850
F150 4x4 with Plow/wo Plow 34,252 22,000
Temporary Pressure Monitoring Stations 12,240
Rain Guage 10,000
Tapping Machine 8,500
Backhoe and Dump Truck 235,000
PRV Pits/Booster Station VD/26 and Jewell/27 100,000
Vactor Truck Replacement (1994) 300,000
29 / VD Booster / Meter Pit (another water access point) 400,000
14,918,507 3,047,000
Funded from Bond 7,525,722 -
New Cash Outlay 7,392,785 3,047,000
Sewer plant
Cash Needs
2019 2020
Net Income 2,979,000 2,347,000
Subtract Contributed Capital (2,162,000) (2,084,000)
Add Back Depreciation 1,680,000 1,976,000
Net Available for Capital and Debt 2,497,000 2,239,000
Capital Not From Bond (7,393,000) (3,047,000)
Principal on Bond (811,000) (811,000)
Cash from Reserves (5,707,000) (1,619,000)
The capital investment program results in a decrease in
cash in the short term in return for future cash flows
going forward. These cash needs are funded from
earmarked cash of $10mm of our $20mm of working
capital that was set aside for exactly these purposes
years ago.
Risks and Opportunities
Risks
• Revenue Sharing • Ambulance fees • Property Tax Values – long term • Infrastructure deterioration • Facility needs • Push down from State/County • Service level requirements • Building trends • New regulations for Flint driving
costs for local governments • CBA negotiations • Land price risk
Opportunities
• Attrition causing more 2nd tier • Markets – interest • Building trends • Grants • Revenue Sharing • Ambulance fees
Resident Benefits Over Bureaucracy
2008 YE 2019
Full time staff 66 FT 64 FT at a lower cost per person
Unfunded Legacy $7mm Eliminated
Police 6 14
ISO ratings 5 and 9/10 3 and 4/10
Infrastructure dilapidated Lined and repaired sewers Added water main Built a water storage facility Built a new fire HQ New sewer plant 5 miles paved road 24 miles limestone New water tanker New ambulance fleet Public parking 180 acres added land
Fund bal. (net of $7mm legacy) Governmental (5 legacy) Enterprise (2 legacy)
$14.4mm $46.9mm
$18.6mm $64.5mm
Operating with a Low Millage Rate
But Keeping Property Values High
-
50,000
100,000
150,000
200,000
250,000
300,000W
ash
ingt
on
To
wn
ship
Mac
om
b T
ow
nsh
ip
Shel
by
Tow
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ip
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ow
nsh
ip
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To
wn
ship
Arm
ada
Tow
nsh
ip
Ric
hm
on
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ow
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ip
New
Bal
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ore
Ch
este
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ld T
ow
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ip
Ster
ling
Hei
ghts
Mac
om
b C
ou
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Ave
rage
Har
riso
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ow
nsh
ip
Clin
ton
To
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ship
Ric
hm
on
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Uti
ca
Len
ox
Tow
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ip
Fras
er
St C
lair
Sh
ore
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Mem
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War
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East
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Source: 2017 Equalization Report Excludes 40 homes in the Lake Township portion of Grosse Pointe Shores on the very south end of Macomb County at $618,375; note that villages are combined with townships in this presentation.
Washington’s
approach to
development and
building a great
lifestyle has helped
us maintain the
highest property
values in the County.
Health Governmental Fund Balances
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2008200920102011201220132014201520162017201820192020
Police
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2008200920102011201220132014201520162017201820192020
General and Other
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fire/Amb
Health is strong. Aggressive spend
(for parking lots, roads, tanker,
ambulances, station, etc) will reduce
fund balances somewhat. We still
have > 1 year in reserve for General
1.5 for Fire/Amb and 2 for Police.
Note that you need 70% of budget
to cover timing.
Sampling of Businesses Choosing Washington - 2009 to Present
Jake O’Malley’s
Brown Iron Brewery
Art and Jakes
Pizza Nostalgia
Bangkok Cuisine
Sapori’s
Taco Bell
Pamela’s Catering
Jimmy Johns
Michigan Planners
Angelica’s Place
Pure Sleep
Powerhouse Gym
Salon V
Total Health Systems
Miracle Ear
AAA
Anytime Fitness
Sylvan Learning
Movement Project
Yoga
Salvation Army
Advanced Auto
Rite Aid
Brush Salon
Momentum Church
All State
Crittendon Medical
Katy’s Corner
Autozone
Serra Kia
ReCycle Fitness
Verizon
Total Soccer
Sally’s Beauty
Orielly’s Auto Parts
Basement Salon
Diversified Financial
Escape Room
Randazzo Call Center
United Framing
Gemelli Concrete
A Great Place to Live…
3 local orchards
20 dine-in 12 fast-food restaurants
Several golf courses
Sports facilities
Amazing emergency services
Clean water and waste services
Park’s and Recreation activities
AA bond rating
Washington Historical Society Museum
Octagon House
Art Guild
Macomb Orchard Trail.
Washington Lions
Sportsman’s Club,
Boys and Girls Club
Library and Schools
WBRW TV
16 religious congregations.
Stony Creek Metropark
• swim,
• fish,
• bike,
• nature center,
• disc golf,
• boat,
• sled,
• cross country ski,
• music in the park,
• camp,
• zip-line aerial course.
More to come…
What is Next?
• Must adopt budgets by 3/31.
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