ALPENA - The City of Alpena has been losing revenue in its water fund for the last several years. The decline is due in part to maintenance costs to the existing system and because many of the water meters in the city are old and not reading properly.
To help rectify the problem Alpena Municipal Council approved installing new wireless meters that would accurately gauge the amount of water consumption, thus boost revenue. It also has been paying on loans and bonds taken out for past system projects that have come directly from the fund.
Clerk/Treasurer Karen Hebert said through November 2012 there was $297,000 in the fund, which was a decrease from $825,000 from the previous year. She said there are several factors that have caused the drop. She said the $1.5 million loan through United Water for the new meters and the installation comes with a $15,000 a month payment. She said repairs and maintenance that have been done also came with a large price tag.
"It has been decreasing for the last three years because we have done a lot of capital projects, including the new water meters," Hebert said. "We have also noticed there is a lower flow and usage has went down. We also have a 10 year maintenance plan on our two water towers which is $200,000 for the first couple of years, so that is significant."
Hebert said the city had taken out several low interest revolving loans from the state for capital improvements to the water system. She said many of them have become due and the payments come out of the water fund. The city has had a contract with Alpena Township for water, but the agreement expired last year. The two sides did not enter into a new contract yet because the city chose to take part in a water study, which will determine what the appropriate charge for the service to the township should be.
"Right now we have just agreed to carry on like things have been until we can get the water and sewer rate study done," Hebert said. "We will bring the results to council hopefully in March, decide what direction we want to go in and then get with the township and work on the rates with them. They are aware of the study and I believe they think it is a good thing too."
Before the new meters began being installed United Water said some of the meters were reading as much as 95 percent low and because of that some customers were not being charged what the use really was. Hebert said the project is nearing completion and it will take a significant period of time to see if there is an increase in revenue from the accurate measurements and how much it will be.
"It would be nice to have a cycle of about a year so we can check one year to another," Hebert said. "I'm really curious to see the numbers too. I know right now everyone is extremely happy with the new meters and the technology that comes with them. It is a new program and it is going to take some time to see the results."
The water fund is important because the city relies on the money for improvements to the water and sewer system. Because the fund has been depleting, the needed work has been delayed. An increase in revenue however could help make some of the needed work a reality.
Hebert said she would like to see about $500,000 in the fund in case there is an unexpected expense or expensive repairs needed. She said this year the engineering department asked for $1.4 million in funds for capital improvements to the water system. She said some work has been done on Lake Street and there will be some to Grant Street. Hebert said there are many more improvements that need to be done before things get worse.
"We have done a lot of work, but there is still a whole lot to do," she said. "We can't get too far behind on things because the system continues to age and as time goes on the cost of everything goes up."
Steve Schulwitz can be reached via e-mail at email@example.com or by phone at 358-5689.