MILFORD – Town councilmen decided Monday to have a rate study done in preparation for raising sewer rates.
They previously discussed raising rates a small amount and saving about $10,000 on the cost of a full study, but learned Monday that – while technically not illegal – they’re going about funding town utilities the wrong way.
With its current user rates, Milford subsidizes water and sewer with County Economic Development Income Tax funds.
But rates must be high enough for the departments to be self-supporting and to pay back bond holders, town attorney Jay Rigdon told the council.
“It’s not illegal, but we’re not doing it the right way,” councilman Bob Cockburn observed. “If we don’t do anything at all, we’ll have to continue the way we’re doing, which is wrong.”
A rate study would apprise the town of its needs and ensure a rate increase would be sufficient, Rigdon said. Without it, he said the town could raise rates too high with nothing to back up the decision, or too low, essentially “putting a band-aid where you need a tourniquet.”
The council voted to hire H.J. Umbaugh & Associates to perform a sewer rate study for up to $5,500, though they expressed hope the company could amend its 2010 rate study at less cost.
The council also had its first look at the 2013 budget, with an overall increase of $155,558.
The 2013 budget of $1,667,737 includes an increase in the General Fund to cover a 3-percent salary increase and the purchase of a replacement police car.
It also includes an extra $20,000 for the town’s subsidy for Multi-Township EMS.
Most funds will stay at the same amount as this year, though at $50,000, the Redevelopment Fund is cut in half.
The council will adopt the budget at its Oct. 15 meeting.
Also Monday, the council approved the purchase of two vehicles for the utility department and close to $8,000 in other repair and supply costs at superintendent Randy Veach’s request.
Milford will buy a demonstration model street sweeper from Brown Equipment for $164,950 and a used utility truck from Van Buren Township for $2,500.
Councilmen previously discussed the need for a street sweeper, which they said will reduce cleanup costs by keeping leaves and trash out of storm sewers. The demonstration model is $10,000 cheaper than a new model.
“This is probably the most important piece of equipment we could have for the sewer,” councilman Dan Cochran said. “I love to say no, but probably not now.”
Other utility expenses the council approved included $5,600 to replace a door header and three doors in the town hall and the community building; $1,655 for a replacement ammonia meter in the water plant; and $557 for wear rings for the town hall basement pump.
Veach also announced that water meter reading will begin Sept. 18.
