Big Rapids adjusts township user charges to reflect equipment needs

PAY FOR THE PUMP: Big Rapids City Manager Steve Sobers explains how the city has brought user charges to Green and Big Rapids townships more in line with estimated necessary contributions. (Pioneer photo/Adam Gac)

PAY FOR THE PUMP: Big Rapids City Manager Steve Sobers explains how the city has brought user charges to Green and Big Rapids townships more in line with estimated necessary contributions. (Pioneer photo/Adam Gac)

BIG RAPIDS — A malfunctioning pump at the Big Rapids Wastewater Treatment Plant will be disassembled and diagnosed next week. While it’s unclear how much repairs will cost, if the pump cannot be repaired installation of a new one could cost about $250,000.

In anticipation of the need to replace parts at the treatment facility, the city has increased the amount it charges for sewage treatment over the past few years, but Big Rapids residents aren’t being left with the check.

The Wastewater Treatment Plant is a city utility, but it services more than just the residents of Big Rapids. Big Rapids Township and Green Township both treat wastewater at the Big Rapids facility.

Each year, the city performs a study on the cost of operating the plant. The purpose of the study is to set the rates Big Rapids charges the townships for waste water, according to City Manager Steve Sobers.

“It’s a highly-technical financial analysis,” he said. “It separates treatment and administration costs, a whole series of expenses.”

Part of the user charge study is a depreciation schedule. The schedule lists the equipment the city has purchased, its total cost, estimated life span, purchase date and the remaining years in a given piece of equipment’s life-cycle. A formula using this data yields the amount the city has to set aside in order to replace equipment as it becomes obsolete.

In previous years, the city has opted to reduce charges to the townships and not contribute the full amount generated by the depreciation analysis. In 2013, the estimated necessary contribution to the fund was approximately $216,000; the actual contribution was about $55,000, Sobers said. Part of the reasoning behind not keeping up with the schedule was the perception that the fund had an acceptable amount already, about $1 million, he added.

“For a number of years we have been leaning toward sensitivity to the rates more than the financial realities of eventually needing $3 million, which is what the study says,” he said.

The $3 million is the approximate amount it will cost to replace equipment as it ages into obsolescence between now and 2031.

The city has been increasing contributions to the depreciation fund by charging the townships more for the treatment of wastewater. In 2014, the schedule called for a contribution of around $212,000 and the city contributed about $127,000. In 2015, the estimate remained about the same and the contribution increased to $180,000.

The cost of repairs and potential replacement of the screw pump at the Wastewater Treatment Plant is an example of why it is important for the commission to keep the obsolescence of equipment in mind when assessing user charges, Sobers said.

“This is why it’s important in the user charge to fund replacement costs as nearly as you can in case something like this comes up and we need a $250,000 appropriation,” Sobers said. “If we continue to shortfall the depreciation schedule we could literally wipe out the fund.”

Big Rapids Township Supervisor Bill Stanek understands the reasoning behind the increased user charges.

“We understand why the user fee has been going up every year,” he said. “Equipment at the plant is getting older, so we’re preparing to replace parts in the near future.”

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Posted by Adam Gac

Adam is the Pioneer City/County Reporter, covering government in Mecosta County. He can be reached by e-mail at agac@pioneergroup.com or by phone at (231) 592-8347.

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