11-25-13 Common Council Meeting Minutes

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REGULAR MEETING NOVEMBER 25, 2013 it Councilmember Dieter: Dr. Varner talked about a lot that I wanted to,but one question as you said,tough choices now, lower rates later, when would later be? Eric Horvath: I think you know what I meant by that is that if you do a rate sensitivity analysis and you know assuming that there are certain projects that have to be done. I understand you are saying lets question those assumptions and part of the plan, the reason that we are moving forward with parts of it now are because they are the projects that were separating sewers and they are the ones that are in the Phase I that we have to have done by 2017. So it makes me nervous if we don't move forward that we are just not going to get there with all the projects. What happens on the rate sensitivity analysis is that if you look at 9%raises over the next four years then your subsequent raises to meet the capital needs of the plan are much less than that and we showed the entire plan to and the rates and I think in year 16, year 15, one of them was zero, one was 1%, so it went down significantly, if you do it the other way around, we did five (5%) percent increases for the first half of the plan, we would end up with rates that would be 15%, 18% at the end and our total monthly charge would go from somewhere you know with the plan that you've got in front of you and $95.00 a month, to somewhere in the realm of$130.00; $140.00 per month depending on how you do it. That's what I meant by that, obviously, if you raise rates, it's generating capital over 16 years as opposed to if you do it later, when it generates it over the last period of the program. Councilmember Dieter: I understand but when you say something like that, I interpret it and I don't know if people paying that bill interpret it that you talk about the lower rates will decreasing throughout the process of the entire project, when people I think the normal person; lay person; they think lower rates okay, it's going be lower than what were are paying now or whatever. Again, it's not anything indicative of all the, I think it's just Dr. Varner said we've been going through this for a long time and this thing has exploded into something that I think we can do, work harder and get something a lot better for the tax payers. Councilmember Dr. Fred Ferlic: The only question that I have to ask really is, that I think your analogy that it is going to cost us more later if we don't come up with it now is based on a$600 million dollar project. But if your project can be cheaper from the onset you may be better off to slow it down now, and add on later. So I think that it's depends on how you interpret your numbers obviously. I agree with Dave completely and I have a sense with talking to you over the last two (2) months about this and you're willing to work with us for the betterment of the city and I think that is the way we should go. So I agree with Dr. Varner and commend you for willing to be opened minded about this whole thing. Councilmember Schey: Eric, I will just reiterate what I had said in committee earlier today. I think that with the federal mandate there aren't any members of Council here that would argue that we do not want raw sewage running into the river, so we are of course going to support you in all your efforts to remediate that issue. However, what I had mentioned earlier is there is the need to have and there is the nice to have. And one thing that at least during my time on Council I feel we haven't done we as a City maybe haven't done as good of a job as possible, is separating those costs. There are the need to have's, there is the actually infrastructure that has to be put in place to separate the storm water and sewage. But then there is the nice to haves and those are the streets, the more elaborate streetscaping improvements that are done on the back of the funding for the CSO project. And I think in the spirit of transparency and accountability we are being a bit disingenuous when we tell the residence you know it's going to cost this much, well the federal mandate portion to eliminate the sewer overflows yes, that is going to cost this much,but the more embellished street scape replacements that are going in after the work has been done, that's a nice to have. And, so in the spirit transparency and accountability we would serve the community well by providing a more detailed analysis of those costs. Council Attorney Kathleen Cekanski-Farrand: Mr. Horvath this presentation somewhat different • than what was presented at the last public hearing. Could you make sure that the City Clerk's get a copy of it. Eric Horvath: Absolutely, it's pretty close, but absolutely. Council Attorney Kathleen Cekanski-Farrand and in particular the one thing is the slide number 8, there was a change to an item that's been under much discussion about meeting the Michigan • • 9 • •