2017-10-26 / Views

Complexities of sewer millage make it suspect

Eventually the reality of the size of debt still owed on the Northport Village and Leelanau Township municipal sewer system will need to be addressed. So our enlightened conversation with recently appointed Northport Village Council trustee Campbell McLeod was encouraging.

Mr. McLeod seemed acceptable to both sides of the aisle in Northport, and we could only wish that the divisional line represented some distinguishable difference in political philosophy. It doesn’t. The political divide in Northport is based on personalities and past digressions — and, of course, the sanitary sewer system.

But Mr. McLeod managed to gain appointment by unanimous vote of a divided Village Council. That was encouraging.

Even more encouraging was his priority of addressing problems associated with the municipal sewer, which include the remaining debt on $13.3 million in bonds sold in 2007 to build the system. Bond payments are draining $60,000 annually from the general funds of both Northport Village and Leelanau Township — but that won’t be enough for the township, which at its recent pace would still owe a bunch at completion of the repayment schedule in 2028.

Through a short-sighted decision made a decade ago, the township is saddled with 20 percent of the sewer debt but has only 13 percent of the users. The township absorbed a higher percentage of the debt because it was more expensive to lay infrastructure outside of the village.

While that may be so, the difference should have been addressed at the time through higher hook-up and user rates for township residents.

But financial reality had little to do with the sewer repayment schedule, which was based on anticipated growth rather than guaranteed users. That’s a no-no in the accounting world. Instead, hook-up fees that now run more than $17,000 per residential user discourage new commercial and residential construction, even for “affordable” housing.

So where do we go from here?

Leelanau Township is considering asking residents to approve a new property tax for the sewer debt. The layers of inequities built into such a request make its chances for approval suspect. You would have Northport Village residents paying $60,000 from their General Fund, then an additional tax to the township — on top of their quarterly user fees. And most township residents would be paying for a sewer they can’t hook up to.

So the easy answer is not so fair.

We’d start a road to the future with an open meeting of the Village Council and Township Board. As Mr. McLeod has suggested, put everything on the table.

And we’d look closer at whether the Northport-Leelanau Utilities Authority has been accomplishing its mission, which is to run the sewer as a business and to manage its finances free of political sway.

Ultimately, it will be up to the Northport Village Council and the Leelanau Township Board to make ends meet.

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