Fletcher: Of fire departments, water rates and city managers

Sometimes good things come from adversity. As an example, take the fact that the East Long Lake/West Grand Lake Fire Department has been replaced by a contract with Alpena Township for fire protection service.

Although no one likes the fact the fire department got into financial trouble, it looks to me as though the new arrangement should result in faster response time for the residents of that area because of the combination of a volunteer/full-time department.

The arrangement of having 24-hour/seven days a week full-time employees at the fire house should result in the equipment getting to the scene of trouble as soon as possible. After all, in the worst case scenario the full-timers are sleeping next to the emergency vehicles. The call comes in, the trucks roll, and the volunteers meet at the scene. Theoretically, this new arrangement should provide for faster response.

This segues into the great water controversy. Good numbers lead to good discussion and easy agreements. Municipalities are not required to use any specific accounting system for municipal water and sewage systems. However, there is something called “The Uniform System Of Accounts For Water” and you can find it on the Internet. If both parties are using the same system of accounting, then negotiations might be easier to conclude.

I believe current negotiations between Alpena Township and the City of Alpena are foundering because they use different accounting systems. The numbers are changing continually. Maybe, just maybe, the city and township will start using the Uniform System to add transparency to the process.

We have been reading about the value of the city’s water and sewer system. Luckily there are publicly held companies in that business. In the AUS Utility Reports monthly utility report of electric, natural gas, and water companies (talk about an obscure publication), there are published financial ratios for water companies. The depreciated net plant for the companies listed runs between 2.04 and 5.41 times the total revenue. All of the companies listed made a profit. If the city has $4 million in revenues, then the indicated value of the system would lie between $8 and $22 million if it were making a positive net income. The report doesn’t say if these listed companies have sewer systems also.

Lastly, kudos to Onaway and Rogers City for investigating the possibility of sharing a city manager. Sharing is the baby step in gaining governmental economies of scale, leading to less taxation.