Traverse City Record-Eagle

Grand Traverse County

September 17, 2008

Septage plant turns profit in 2008

Treatment plant has $438K deficit from prior years

By BRIAN McGILLIVARY

TRAVERSE CITY -- Grand Traverse County's septage treatment plant will make money in 2008, the first in-the-black showing in its troubled history, though not enough to erase a $438,000 operating deficit from prior years.

County financial officials estimate the five townships that own the plant will need to borrow $290,000 to make a November bond payment.

The need to borrow that much money surprised Acme Township Supervisor Wayne Kladder, chairman of the county sewer and water committee that oversees the plant.

"It was quite a bit different than what we had been told, and we were all caught off-guard," Kladder said.

County Department of Public Works Manager Chris Buday initially told the committee the plant would erase all but $90,000 of its debt this year. Buday offered slightly more optimistic projections than the county's financial experts. The main difference was due to a mathematical error, he said.

The water and sewer committee, comprised of supervisors from Acme, Peninsula, East Bay, Garfield and Elmwood townships, wants to ask the county board for another one-year loan. Some county commissioners want those townships to cover its losses.

"While $290,000 is better than $438,000, I was personally expecting a little bit more of a turnaround," said Grand Traverse County Commissioner Larry Inman.

The plant needs about $400,000 to cover its deficit and give it a cash cushion to operate, Inman said. He suggested the county and the five townships each kick in about $66,000.

"The question is, should we keep going along making cash advances or should we just put a cash infusion in and be done with it," Inman said.

Kladder said he sees value in putting the financial problem in the past, but he'd also like to see the plant work itself out of the hole.

For the first eight months of 2008, the plant took in 50 percent more septic tank, holding tank and grease trap waste than for the same period in 2007, Buday said.

The increase, however, still leaves the plant short of the volume originally projected when it was built in 2005. An infusion of contaminated groundwater leachate from Bay Harbor Resort in Petoskey -- almost 14 million gallons estimated for 2008 -- contributed about $563,000 to the septage plant and kept it in the black this year.

But the money from Bay Harbor is expected to end by 2010.

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