Council evaluates possibility of sale of sewer system

In order to make an informed decision about the most beneficial way to fund much-needed municipal building improvements and rebuild its dwindling capital fund, the Plymouth Township Council is taking steps to determine if selling its sewer collection system should fit into the equation.

The governing body, at its September regular meeting, voted unanimously to seek a Request for Qualifications of potential sewer system bidders. Council Chairman Martin Higgins told the handful of residents who inquired that this next step would help the Council determine if there are willing buyers and how much they might want to bid.

From there, the system could be put out to

bid. The Council stressed that a decision would not be made hastily.

The request for qualifications and subsequent bidding could take several months to complete.

“This is a process we’ve been at least exploring for a few years now. We’re seeing it as one piece of a much larger picture,” Councilman Christopher Manero said. “We have a capital fund that is projected to dwindle in the next three to four years. We have a sewer system that’s an asset but also a liability … We have a township building that is over 40 years old and does need repairs, upgrades, renovations. We’re not looking to build the Taj Mahal.”

Higgins said the Council determined that building a brand-new building was too cost-prohibitive. Instead, upgrades are planned, including fixing the leaking roof and replacing the building’s aging HVAC system, among other improvements.

The request for qualifications follows several community meetings the township held in the spring to discuss the possibility of selling the system. The other option to fund building repairs and help replenish the capital fund would be to raise taxes something that Plymouth Township has not done in 25 years.

“We do want to do something to ensure the stability of our finances and infrastructure,” Manero said, adding that selling the sewer is a “last resort.”

The township’s sewer rates have increased 7 percent each of the last two years, officials said. Several residents voiced concerns about potential skyrocketing rates if the system is sold, particularly to a public company. Should the township opt to sell its sewer system, the Council said officials would negotiate to ensure any future rate increases are reasonable.

Councilwoman Karen Bramblett said Council wants to hear from residents.

“We want what’s best for the residents of this township,” Bramblett said. “We’re going to be very cautious.”

Councilman David Gannon stressed that this step is “purely informational” to see if there’s “any interest.”

Township attorney Michael Clarke said PFM has begun valuing the system, which will help officials find a comparable price range once bids are submitted.

If the Council chooses to raise taxes to cover the municipal building renovations, Higgins said several options are available. Possibilities include raising the Earned Income Tax from 1 percent to 1.3 percent or increasing the millage rate from 1.6 to 2.11. Under the latter, the owner of the average assessment of $180,000 would pay about $92 more per year in municipal real estate taxes. Another option is to raise the Earned Income Tax to 1.15 percent and increase the millage rate to 1.85. Real estate taxes for the average property would cost an additional $46 per year.

Both of those scenarios would only cover the $860,000 annual debt service on a $15 million loan. In addition, neither option would replenish the capital fund.

“At least a certain percentage of it has to be earmarked to replenish capital funds,” Higgins said. “We’re trying to solve three problems here. None of them are easy.”