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(A) The City Council has determined that not all classes of users of the system cause the same costs of service. Based on the recommendations of independent engineering consultants to the city, City Council has determined the following:
(1) The commodity costs of water supply and some portions of the costs of sewage disposal are uniform among users in accordance with the volume of use;
(2) Indirect costs of water supply and sewage transportation, including size of service pipe, materials used, locations of meters, size of storage and treatment facilities, and maintenance, billing and collection costs vary according to the size of meters;
(3) While all users benefit equally from capital improvements to the system, users taking possession of previously undeveloped properties, and users changing the nature and amount of use of the system at renovated or expanded properties would not bear equally the cost of those capital improvements unless required to pay a system equity charge;
(4) Certain types of property uses require a reservation of a greater capacity of the system than others;
(5) At least 50% of the costs of service to all customers is related to the indirect costs of service;
(6) Current technology does not support the efficient and cost effective metering of sanitary sewage discharged into the sanitary sewage disposal system. As a result, the city has determined that the most equitable measure of the volume of sanitary sewage discharged into the system is the amount of water consumed;
(7) The city will offer service to properties located outside the city limits only pursuant to city-township contract.
(B) The City Council has therefore developed the following classes of users.
(1) For meters of the following sizes, the following meter equivalency ratios for purposes of allocating the base amount of the indirect costs of service and calculating the quarterly base rate per meter size:
Meter Size (inches) | AWWA Meter Capacity Ratio |
Meter Size (inches) | AWWA Meter Capacity Ratio |
5/8 and 3/4 | 1.0 |
1 | 1.6 |
1-1/2 | 3.3 |
2 | 5.3 |
3 | 10.0 |
4 | 15.5 |
6 | 33.3 |
(2) All classes of users shall pay the same rate per gallon of metered water for water supply and sewage transportation services.
(3) For purposes of calculating the system equity charge, City Council has decided to use a table of unit factors, a copy of which is on file with the Director, based on a unit equaling 250 gallons of water consumed per day per year, as recommended by the city's consulting engineers.
(4) The base charge shall be calculated so as to produce no less than 50% of the annual budgeted expenditures of the system.
(5) The amount of water consumed is generally an appropriate and fair indicator of the amount of sanitary sewage discharged into the sanitary sewage disposal system.
(6) Where a user discharges sanitary sewage into the sanitary sewage disposal system but does not use the water supply system, or where a property uses large quantities of water that are not disposed of through the sanitary sewage system, the Department shall propose and the City Council shall adopt, methods of allocating the costs of service to those properties based on the estimated use of the sanitary sewage system.
(1993 Code, § 68-100) (Ord. passed 1-22-2001; Ord. 2014-01, passed 1-27-2014)
(A) Consumption charge. Every user shall pay a consumption charge calculated on the basis of metered gallons per day of water consumed at a rate determined by City Council to produce an estimated 45% of the annual budgeted revenues of the system.
(B) Base charge. Every user shall pay a base charge calculated on the basis of meter capacity ratio in an amount determined by Council to produce an estimated 50% of the annual budgeted revenues of the system.
(C) System equity charge. The purpose of the system equity charge is to recover certain of the capital costs incurred to provide sufficient capacity to all users from those users that have not previously paid their share of those costs. Every person seeking to utilize the system for a use estimated to demand the reservation of greater capacity of the system shall pay a system equity charge established and managed as provided in this section.
(1) Calculation of estimated demand on capacity. The estimated demand on capacity of the system shall be based on the unit factor assigned to the type of use described in the table of unit factors approved by City Council from time to time, based on historic average use for each type of use.
(2) Calculation of system equity. System equity shall be determined annually on the basis of the value of system assets comprising the backbone facilities of the system, including, but not limited to, wells, reservoirs, treatment plants, mains, distribution mains and high service pumps, plus funds in the Replacement and Improvement Fund, plus accumulated depreciation, less the amount of any grants received to fund system assets, and less the principal amount of bonds remaining outstanding and incurred to finance those assets.
(3) Calculation of system equity charge. The system equity charge shall be determined each year as follows:
System Equity x residential equivalent unit factor Total number of existing Meter Equivalent Units
(4) Credits. If the system equity charge relates to an increase in demand on capacity, the city shall provide residential equivalent unit credits in the following order:
(a) The number of documented residential equivalent units previously paid for connection of that property to the system;
(b) If the number of residential equivalent units paid for previously can not be identified, the residential equivalent units shall be determined by the latest 2 year average billable flow divided by 250 gallons per day per year;
(c) If the latest 2 year average billable flow cannot be determined, the residential equivalent units shall be determined by the table of unit factor based on the properties' previous use.
(5) Use of proceeds of the system equity charge. Proceeds of the system equity charge shall be used exclusively to pay for replacements and improvements to the system, other than extensions of service to new users.
(6) Appeals. A person may challenge the unit factor applicable to the property being connected to the system, or the amount of the system equity charge by bringing an appeal to the Utility Board of Appeals within 24 months of payment of the charge and after review of the City Manager. In considering the appeal, the Utility Board of Appeals shall take into account the historical volume of use by the appellant for the previous 24 months.
(D) System equity charges for buildings built before 1960. The purpose of this section amendment is to encourage the redevelopment of structures originally constructed before December 31, 1959. For all structures built before this date which: 1) involves a change of use and 2) which use is estimated to demand a greater reservation of capacity, the equity investment fee shall be half of the fee set by resolution of the City Council for new construction. By resolution of the City Council, payment for the equity investment charge can be deferred for a period of up to 2 years. Any deferrals shall be filed as a lien on the property.
(E) Tap fee. Each person connecting to the system shall pay the actual costs of the material, meter, labor, equipment and supervision related to the installation of the connection and the meter, plus an administrative charge equal to 10% of the actual costs of the connection.
(F) Inspection fee. Each person connecting to the system shall also pay a fee for inspection of the premises during connection to the system, which fee shall be set from time to time by City Council by resolution.
(1993 Code, § 68-101) (Ord. passed 1-22-2001; Ord. passed 1-13-2003(1); Ord. 2014-01, passed 1-27-2014)
As authorized by the provisions of Public Act 94 of 1933, being M.C.L.A. §§ 141.101 through 141.138, as amended, if a user shall fail to pay a bill within 6 months of the date on which the bill is due and payable, the delinquent bill and all penalties thereon shall become a lien on the premises served. The City Assessor shall place such charges on the next general tax roll, and the charges shall be collected in the same manner in all respects as provided by law for the collection of taxes by the city.
(1993 Code, § 68-102) (Ord. passed 1-22-2001; Ord. 2014-01, passed 1-27-2014)
§§ 68-103 – 68-119 RESERVED.
ARTICLE IV. SEWERS
DIVISION 1. GENERALLY
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