.

Finally, We Have Certainty

It has been a long hard brutal election with spin, attacks and demonizing on all sides. I am very happy this silly season is over and we now have certainty.

It has been a long hard brutal election with spin, attacks and demonizing on all sides.  This approach in choosing our leaders have done nothing to solve the problems, it only caused more confusion, turmoil and chaos.  I am very happy this silly season is over and we now have certainty.

This is not a debate about the choice that was made in the election, as they say “the people have spoken.”  We now have a “New Normal,” we need to understand it and devise our own personal and business plans to meet our goals and aspirations.

If I look up the word “Certainty” in Webster’s dictionary this is what it says:

Cer´tain`ty

  1. The quality, state, or condition, of being certain
  2. A fact or truth unquestionable established
  3. Clearness; freedom from ambiguity; lucidity

We need to know the direction we are on as a Country, State and Rochester Hills.  From this understanding of the path we can all make our personal and business plans to secure our future.  Depending on your personal desires combined with your age and plan for retirement many will choose different paths.  Some will choose a course to survive; others will formulate a plan to thrive.  This will be based on their own personal decisions and appetite for risk.

To understand the “New Normal” we need to look at what is certainly going to happen.  I choose to look at the National, State and City levels and what they are going to do that affects both my personal and business finances.  Once I understand what is certainly going to happen I can formulate a personal plan for me.  I expect most people and businesses are doing this.  As they all move in their chosen paths we will see the combined effect it will have on the economy.

United States of America

We have elected President Obama who has a plan for his second term.  Based on his plan we can be certain of the following actions:

  • Taxes will go up on $200,000 / $250,000 income earners.  These are double income families, executives in corporations, investors, small business owners and many professionals (doctors, lawyers, CPAs, etc.).
  • Capital Gains taxes will go up from 15% to 30%.  This is stock investments, venture capital, angel capital, personal investors and 401Ks.
  • Obamacare will be implemented.  This is certain, but the details are not certain.  It will impact everyone; we just do not know exactly what the impact will be.
  • The 3 houses of government will be in the same deadlock we have experienced in the past years and big things will not get done.
  • We will continue deficit spending and continue to grow the total national debt.
  • The entitlement programs will continue to be unsustainable and further grow our debt.
  • More governmental regulations will continue to be designed and implemented to control our personal and business actions.

The State of Michigan

We have elected the same mix of leaders and will not see a major change in direction.  We rejected the constitutional amendments for many special issues.  We rejected the Emergency Manager proposal and allowed the State to decide on a new bridge.

  • We continue to move in the direction to make us more competitive with other States to attract new businesses; we are not at the top of that list.
  • The cities in financial peril will find it difficult to get money from the State to continue and their spending, there only choice will be bankruptcy.
  • We will have a new bridge to Canada.
  • We will eliminate the property tax on businesses for equipment investments.

The City of Rochester Hills

We have been recognized for a great budget format and presentation that has been passed by the City Council.  In the August primary vote we passed a 2.5 mill increase that can be implemented immediately at the direction of the city.  In the November election we passed movement of money that was saved to be spent elsewhere.

  • The city roads are in bad shape and we do not have the money in the budget to fix them.
  • We have no plan in the budget when the State eliminates the property tax on businesses for equipment investments.
  • We are almost out of reserve money for RCS with an unsustainable budget going forward.
  • Almost every departmental budget was passed with a vote of 100%.

Now is the time when the opinions are formed.  We will all have an opinion on the effects of each of these certainties and how they will impact our personal and business budgets.  If you are not a business owner you will still feel the effects based on your employers decisions to survive and/or thrive.

I am 57 years old and have a short runway to retirement, the decisions I make right now will impact me in the very near future.  I am developing my personal and business plans and in many cases I am already taking action.

I am asking for an adult conversation on this subject and ideas on people’s different plans:

  • What certainties did I miss in my lists?
  • How will these certainties impact your workplace and/or business?
  • How will these certainties impact your personal plan?

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Lee Zendel November 19, 2012 at 03:30 PM
Dayrl- It's hard getting through to you. Rochester Hills as a city has the second lowest millage rate in Oakland county at 9.7 mills A number of Oakland county cities have millage rates 2 to 2 1/2 times as much. Much of that 9.7 mills has been dedicated BY THE VOTERS for specific purposes and CANNOT legally be used as the Administration and Council might desire. Such things as fire and police protection, public library, OPC, RARA, Pathway, and Green Space Preservation. Subtract those items from the 9.7 mils and the City is left with 3.9 mills. The $10 million dollars that is estimated to be required for street/road maintenance and reconstruction EVERY YEAR roughly equal to 3 mills. You're a self described numbers man- do the math. What do you want to do away with- Clerk's office, treasurer's office, -Sorry required by state law. Do away with the parks- that only gets you a bout 1/3 of the way there. Come on Daryl, this is not a coming event, it is a every year event. Like you said there is no money tree. Therefore the residents have two choices as a former mayor said either tax themselves more or eventually drive on gravel. P.S. I live on a gravel road that is owned by the Road Commission of Oakland County. A Rochester Hills street/road millage would not directly benefit me but would still add to my taxes.
David November 19, 2012 at 03:45 PM
Daryl is a tea bagger. No real solutions. Fringe thinking.
doug November 19, 2012 at 04:30 PM
Paul: LOL.....
Daryl Patrishkoff November 19, 2012 at 04:43 PM
Lee, We agree there is a problem with the roads and it needs to be solved. However we approach the solution differently. The approach I use in my business consulting practice; we turn around organizations and get them to fix themselves. All assumptions go out the window; just because the rules say something does not mean they cannot be changed. These are roadblocks put up to protect special groups, everyone is special. The City needs to identify the core services required and fund them and put away reserves for future surprises. Then make sure they are providing these services the most cost effective way. If there is money left over, then you get to decide on what extras you can afford. This is fiscal responsibility with a sustainable model. If there is not enough money to cover the core services, present the process to the citizens and see if they will fund more. If not, they have to cut back the core services provided; the citizens get to decide not the elected officials. The answer is not to just keep asking for more money. If the City wants more money they have to prove their point honestly and see if the citizens agree. The City can immediately add a 2.5 mil increase, which was approved in the August Primary vote. They used the same argument you did about process and procedures and gave us a non-binding promise. Why did they support non-competitive wages to the OPC? Why should we trust them based on previous behavior?
Daryl Patrishkoff November 19, 2012 at 04:51 PM
David, When you were growing up and you asked your Dad for something and he said we cannot afford it we have only so much money. Did you call him a "Tea Bagger with no real solutions and a Fringe Thinker"? Maybe he could not afford it. There is no magical money tree, we can only afford so much. Where is everyone going to come up with the cash to pay more taxes in this economy? I know many people who do not have the disposable income to pay more, they are behind the curve and are trying to survive and recover from 2008. I have been called radical because I want a fiscal responsible government that is sustainable and be a good steward with our tax dollars with accountability. I will proudly wear that tag of Radical. How about some adult comments on your plan to survive and/or thrive in this economy?
Lee Zendel November 19, 2012 at 09:21 PM
Daryl- You keep using the phrase " future surprises". The street/road problem is not a future surprise ! When all is said and done the problem is that the founders of Rochester Hills in 1984 thought that a 5 mil limit on the General Fund would be enough forever. They failed to consider or foresee the effect that the Headlee Amendent and Proposal A would have on city millages and assessments. Daryl- Learn about the Headlee amendment and Prop A before you make any further comments about how this city should have done something or now should do something. Learn that even if your home's market value returns next year to its peak value in 2006-2007 it maybe 5-7 years before its taxable value returns to that level. Learn about the un-funded state and federal mandates forcing the city to spend funds it otherwise would not. Go through the General Fund budget line by line trying to find MEANINGFUL cuts in the spending. Remember, the estimated ANNUAL need for street/road maintenance and reconstruction is $10 million. Find it, please P.S. This past August those Rochester Hills taxpayers who you say cannot afford to pay increasing property taxes voted 58% in favor of taxing themselves for the Detroit Institute of Arts.
Mike Reno November 19, 2012 at 10:39 PM
Lee... the local impact of Headlee (aside form theoretically protecting against state mandates), is that it limited the increase in property taxes to the rate of inflation. Not trying to be argumentative, but I'm curious... you think our local government cannot just live on annual increases... but need to increase at a rate faster than inflation? SECTION 31: "A key provision of this section limits revenue from property-assessment increases. If the assessed value of a local unit’s total taxable property, excluding new construction and improvements, increases by more than the inflation rate, the maximum authorized property tax rate must be reduced so that the local’s total taxable property yields the same gross revenue, adjusted for inflation, as collected on it at its prior assessed value. (However, the assessment on individual property still could increase more than the inflation rate, because the limit applies to all property combined, not each parcel.)"
Daryl Patrishkoff November 20, 2012 at 12:17 AM
Lee, I have been using the term "future surprises" as a sarcastic comment; I agree these were not and never have been a future surprise. They just decided to ignore the obvious and spent the money in other areas expecting to get increases for what they are calling a future surprise. Sorry if I seemed to be sarcastic, it was not intended to be pointed at you, it is pointed at our politicians who think we are stupid and can pass something past us with rhetoric. The Headlee Amendment and Proposal A were passed many years ago; these were no surprises to the politicians. They just decided to ignore the obvious and expect to pass it on to the citizens with later tax increases. They have kicked the can down the road for years and now it is coming to a head. It is time to get back to the basics, only address the core services needed and what the citizens can afford. The DIA tax increase was a total scam with misinformation and untruths; they did not even say it was for the DIA. They passed it in an August Primary vote with low turn out to get it passed with strong marketing approach threatening the closing of the DIA. This was fabricated and not actual and the citizens fell for it. This is the same approach the City of Rochester Hills did to trick us into passing the 2.5 mil increase. They are dishonest and do not deserve our trust, why would we keep falling for this same trick? Now they are positioning to raise taxes for the roads.
Lee Zendel November 20, 2012 at 02:35 PM
Daryl- the one wager I am willing to make is that the City's 2012 and 2013 total millage rate of 9.7060 mills will not go up in the 2014 budget. Prat endlessly about the 2.5 mills but that 9.7060 mil rate will not change before 2015, if then. Now you say- "Now they are positioning to raise taxes for the roads." No they have been "positioning" since 1991 to essentially no avail. Why are you so positive that this time-if there is such a vote which I doubt will happen- that now the city will win when its overall batting average on street/road millages elections is .142 and its batting average on such millage elections for significant street/road millages is .000
doug November 20, 2012 at 03:26 PM
Lee: You may not want to hear this, but both you and Daryl are somewhat right. The City was dishonest in the last election by fooling the passive voter in a low turnout election that the dedicated Police millage was simply nuetral. Most didn't realize that it raised the ceiling the City and Council have for future taxes. They can raise them without a vote. To you point, I don't expect they will raise them anytime soon. The Mayor does a decent job of running the city day to day, but his and the councils record on long term planning is weak. The character of the city has been eroding for years. RHils is looking more and more like any other Detroit suburb...crummy roads, strip malls, etc.. With his likely running for re--election in two years as a write in candidate, you can bet he won't raise taxes, regardlesss of whether its the right thing to propose for the long term.
Derrick November 20, 2012 at 04:12 PM
Mayor doesn't want to upset Buick dealers.
Erin November 20, 2012 at 05:34 PM
Baylea -it's difficult to respond to posts because of your conflation of issues - involving more emotion, than reality and historical fact. RE: Forbes - we're not talking about GM. "in the work force? " - I'm a SAHM at the moment, but have mainly worked in workforce in small business(es). Sorry to hear about your business, not sure what industry you're in, but I would encourage you to reach out to your legislators for constituent services - that's what they're there for. RE: hospitals merging - it's a long-term trend that far predates O admin, reflecting market forces + shift towards outpatient health maintenance. Today, Hostess + labor in mediation, averting shutdown. Of course taxing the rich won't solve our problems, but a balanced approach to fiscal solvency - what voters were saying "yes" to when they pulled that lever. RE: companies & h/c - I'd hang on - I foresee tweaking in the ACA in 2013-14, and some of the mandates for the smaller co's especially should ease. O - IS a friend to business. Business and banks have done exceedingly well under his admin. And excellent meeting at WH last week, + on phone over w-end. There are always bumps in the road. But most Americans are seeing brighter times ahead according to rising Consumer Confidence Index, Housing. New Realities - pass. We lived through a Civil War, Depression, Civil Rights struggles. We've lived with doing more with less for last 30 yrs - Trickle Down doesn't work. We're trying to turn the tide now.
Erin November 20, 2012 at 05:59 PM
Daryl - I think you don't realize that when you talk of Obama - you reflexively go to worst case scenario of his policy outcomes. IMHO, that reflects ideology rather than cold analysis of the situation. Of course business and individuals have to plan, but it's folly to plan long term, or make big changes, based on - at best - estimates, not "certainties". Tell me when you, me, or GE, have had absolute "certainty" in planning? All we are certain of is that Obama and other legislators won the election. Everything else is probabilities based on current status, opening bids of policy negotiations, and realities of who has political leverage. IMO - I foresee probability of tweaking of ACA for small business, tax change debate go to $1mill (not $250K) - keep in mind, rates stay the SAME for money earned under cap, only first dollars AFTER cap will go up, I suspect, 2-3%. Of course, "This is not a Democratic and Republican issue or debate" - but there are political realities of what gets done. I recommend we as citizens get together on what we all can agree on, and let our legislators know what that is. Or else, K Street lobbyists have the biggest voice as to what's best for them, not us or our country's future.
Mike Reno November 20, 2012 at 06:09 PM
Erin... we need to go have the post-election beer you proposed! It would be a much more productive way to help heal this Obama-itis! that afflicts you! :-) But in the meantime, here is something that can address the part of the illness that allows you to believe that "O is a friend to business" http://spectator.org/archives/2012/04/27/the-list-could-be-longer The List Could Be Longer By GARY SHAPIRO on 4.27.12 @ 6:08AM Fifty ways the Obama Administration has hurt the economy and job creation. There are certainly some that believe "0" is friendly to business... but it is not business owners and business executives that think that.
Baylea November 20, 2012 at 09:23 PM
Erin, You seem to put stock in what Forbes has to say.They predicted GM will need more money in 3-4 years. We own a small business. Many small businesses are increasingly nervous about the economy and government mandates. Many are not paying their bills, others are holding back because of what lies ahead. You may read about jobs/ O, we are living it. Big difference. Look for elderly parents living with kids because the alternatives are too costly or just too awful. Choices for seniors are narrowing. No one will want to be in hospitals -inpatient populations will be sicker and infections will be rampant. Millions of people will be added to Obamacare. Some one has to pay. Erin, where will that money come from? As I see it, jobless rates are going up, will continue to rise, medical costs will go up. I do not know of any small business owner that thinks O has the best interests of business at heart. Jobs will be lost at Hostess one way or another. They must scale back if they re going to survive. We will get through it? I hope so. We will all be paying more and doing with less. Government is a money junkie. They cannot stay within a budget. We cannot keep printing and spending money. It is unsustainable. Agree? O spends more in year than he can possibly take from the rich in a year. Agree? Ask any small business owner, if they are going to compete and make money they will have to make cuts in staff or benefits.
Lee Zendel November 20, 2012 at 10:52 PM
Doug- " but his and the councils record on long term planning is weak." Sorry to disagree. The planning starts with the Master Land Use Plan, then there is the Transportation Plan, the Water & Sewer Plan, The Capital Improvement Plan, the Parks and Recreation Plan, and the Facilities Plan. Those are normally at least 5 year plans at a minimum with some planning for a 20-30 year horizon.. Then there is the 5 year Financial Forecast and Projection Plan which is the basis for the 3 year Budget Plan. What suggestions do you have to strengthen the city's planning ?
doug November 20, 2012 at 11:38 PM
Lee All those plans mean nothing if the character of the city changes. This city used to be unique. A rural feel with historic roots, yet still offering nice suburban living. Every historic home we tear down, road we widen, strip mall we add, neon sign we build, that uniqueness is eroded. Long term housing values will pay the price. Why drive the extra 20 minutes to RHills when we look and feel no different than a dozen other local cities. I am sad to offer this commentary. I have lived here for 25 years and have watched this steady change. If that's what people want, then that's ok i guess.. A master plan should set a goal and support it with initiatives and investments. I simply don't see it..
Derrick November 20, 2012 at 11:46 PM
There is only one person on the council who has character and puts the community ahead of his own interests.
Dee Kay November 21, 2012 at 01:06 AM
Doug, progress means that you move ahead and make different decisions with different results than we had 10-20-30 years ago. No place stays the same as it once seemed to be when we first discovered it. History is nice to learn from but not so great to relive. Reality is often harsh, but we either progress or else we wilt and die. Losing historic sites is not always easy to do but without progress, the next generations may miss out on additional opportunities to make their own history or have their own historic sites, which may be better than the original. We may want to try to preserve historic sites, but if there is a good plan for making that site into a better vision for the future, who decides what stays or what goes? Plaques, engraved rocks, and even statues can be erected at historical locations, while still allowing the site to be used for current or future needs. With the cameras of today, recording devices, etc., we can have the best of both worlds while still preserving historic sites. Books and video archives are a great source for history. No matter how much people may dislike it, time moves on. We either go along for the ride with a smile or we stay in the past grumbling about "the good old days" while missing out on the excitement of the future. Someone is always going to be upset no matter which way things turn out. I choose to cherish past memories while also looking with excitement to the future. To each their own.
Scot Beaton November 21, 2012 at 01:26 AM
doug... I sincerely appreciate your comments. My parents move out here in the early 70's and I have been a property owner for almost 30 years. I don't think we ever had a Mayor that was pro residential character... and if there is any chance of hope for our community's future that is going to have to change, or we will become faceless Detroit urban sprawl. Lee... You know government studies are rarely worth the paper they are printed on -- I wonder how many in our community know that we spent $40,000 studying water tanks when Bryan Barnett was a council person and then spent another $40,000 on a study with the same firm to do virtually the same study on water tanks... let's be real -- when this kind of spending gets out, public opinion diminishes on future tax decisions. doug... When you have time please read this -- thanks Replace officials to stop water fund leak Published: Sunday, February 27, 2011 
http://www.theoaklandpress.com/articles/2011/02/27/opinion/doc4d67018ce9351599362197.txt In 1997 Rochester Hills had nearly a $71 million balance in the water/sewer fund. Today, that balance has been depleted to just under $19 million.
Daryl Patrishkoff November 21, 2012 at 11:03 AM
Lee, I can think of 2 scenarios the City will use to cash in on the 2.5 mil increase and avoid political implications. It is creating a crisis and the only solution is to use the 2.5 mil to fund it. The crisis is created because they did not plan for these events; these are both obvious future events that will happen. Simply they either are incompetent or missed these obvious future surprises, or, they mislead the citizens. All of these are disturbing and proof they do not deserve our trust. Scenario 1: The State of Michigan will eliminate the business property tax and each community will have a reduction in tax collections. This has been known since Snyder took office and where was the planning to fill this future surprise? Scenario 2: The roads are in bad shape in Rochester Hills, we do not have the money in the current budget to even begin to solve the problem. The drum beat is starting and the rhetoric will continue until they believe the citizens believe it needs to be done. Where was the planning for this future surprise? We have an award winning budget that looks good with lots of shinny things. But it clearly misses the planning of certain events. The emperor has no clothes. They watched RCS pull of this same stunt years ago when they raised our mil rate without a public vote. Now RCS is in deep financial peril because they did not address the real problem with a sustainable solution. Why are we going down the same path?
Daryl Patrishkoff November 21, 2012 at 11:20 AM
Erin, Business planning is essential for the security of the company, predicting future events and understanding certainty is the core assumptions that give the plan credibility. All scenarios have to be considered and a SWOT (Strength, Weaknesses, Opportunities and Threats) analysis is conducted to check the viability of the plan. The stakeholders (investors, board, management, etc.) review this in detail and challenge every aspect. Once the reworked and final plan is approved it gets implemented in January. To get all of this planning done to the companies start in the Fall. In this year we had 2 very different paths to be considered with the November being the decision date of the path chosen by the citizens. Many companies had 2 different plans prepared based on the election results. Now the election is done and a path is chosen by the citizens business knows which plan to execute in January. This is certain. We cannot hope something changes, January is here and we have to start. With all the crisis talk of the Fiscal Cliff, the government will do what they did last year. They will have a last minute deal and all of the tax laws will be changed in the last minute and business will not even be ready to withhold the correct amount from their employees in January. This is a fabricated crisis. This is what kicking the can down the road does to business. We have to plan and execute to certainties NOW. Hope is not a plan.
Lee Zendel November 21, 2012 at 02:04 PM
Scot- you said- "In 1997 Rochester Hills had nearly a $71 million balance in the water/sewer fund. Today, that balance has been depleted to just under $19 million." It has not been "depleted". The $71 million came about from the charge made to every builder for attaching a new home to the water and sewer system. A decision was made that the best use of some of that money, which could not be used by any other fund within the city, would be to use the some of that money to reduce the residents water bills. In other words the money was used to sell water to the residents for less that the Detroit Water department charged the city itself. You may argue that it shouldn't have been done but the residents were the one who directly benefited. In essence you're saying is that it would have been better to just let the money sit there enshrined forever.
doug November 21, 2012 at 03:08 PM
There are countless examples of cities who recognize that preserving the character of a city is a competitive advantage. It keeps home values higher and creates differentiation. Just visit the Boston area as one great example. Our own Petoskey has done a great job. You missed my main point. You can move forward with progress and still preserve the character of a city with good planning. Change is not a bad thing. It just needs to be managed to come out with the best outcome
Scot Beaton November 21, 2012 at 04:27 PM
Kristin, Daryl, Rolly, Paul, Marty, Erin, Lee, Bertram, Trevor, Baylea, Mike, Doug, David, Derrick, Dee Thanks for all your great comments and happy thanksgiving to all. ~Scot
Scot Beaton November 21, 2012 at 04:51 PM
Lee... You know our water sewer system is our/city's responsibility... zero outside government help not even from Detroit... LOL -- and you know a water sewer system is just like roads and will not last forever. This system will grow old and will have to be replaced -- will grow old all at one time because most of the city's growth happened during a 'boom' in development. Where are the millions going to come from to replace it? We paid for this system with our 30 year mortgages and would have hoped after that bill; we would not be stuck with a new bill to replace it. Lee there is no 'benefit' when government... even at the local level kicks the can down the road for some future generation to pay for it. note: The city will not need a new tax to replace and maintain our water sewer system they can just 'up' your water sewer bill without your permission.
Scot Beaton November 21, 2012 at 06:23 PM
Dee... 
 Wow -- your a great writer... do you write for a living? My background; 30 years in the advertising business... your good. Dee... when I made the business decision to invest in Rochester Hills -- buy a house -- there were some principles that even our 'founding elected officials' 30 years ago... even to this day need to still be recognized to uphold and protect that investment. 1. Protect our community's natural beauty -- one of the reasons we still today have a woodlands -- steep slope -- and wetlands ordinances. There is now new talk to weaken those ordinances. 2. Protect our historical past -- recently our current Mayor and members of City Council totally ignored the recommendations of our Historic Preservation Committee and voted to let a developer tear down a historic house on Rochester Road -- in exchange for a new Strip Mall development. note: The land was zoned office -- when I was on Council the land was zoned residential. 3. Protect our community's density -- our Mayor's new master plan now encourages neighborhoods like Christian Hills to combine two home lots and divide into three home lots.
Scot Beaton November 21, 2012 at 06:47 PM
Dee... 4. Retail development was zoned to only handle our community needs... look at our Mayor's City Council voting record -- many YES votes have turned residential zoning to strip mall development. Many YES votes have turned Office Research Technology into Strip Mall development. Our City is now over zoned commercial that is why we now have empty storefronts. When I left Council you had to own an acre of land to build fast food drive-through restaurants -- just recently I found out that our Mayor has changed too, now you only need a half acre. Our current Mayor's own voting record proves disregard to those 'founding elected officials' wishes 30 years ago -- and now our City is on a path to be nothing more than faceless Detroit urban sprawl. Dee... thanks for your post Happy Thanksgiving.
Lee Zendel November 21, 2012 at 06:58 PM
Scot- A water system has a much longer life that the street. Cast iron water pipe is considered to have a 75-100 year life. The newer ductile iron water pipe is estimated to have a 125 year life. Either way the U.S. as we know it will be bankrupt and destroyed before those pipes need replacing. As has been said civilizations are destroyed when the majority of its citizens learn they can vote themselves monies from the public treasury.
Lee Zendel November 21, 2012 at 09:38 PM
Scot- " This system will grow old and will have to be replaced -- will grow old all at one time because most of the city's growth happened during a 'boom' in development. Where are the millions going to come from to replace it?" Wrong again Scot- The city is including a depreciation expense in the water charge to the residents. The systems is being depreciated on a 50 year basis, even though the life of the major parts of the system have a 75-125 year estimated life. So far the accumulated depreciation is well over 40% of the current book cost of the system. that's where the money will come from. Assuming this society exists another 45 years the fund will have 100% of its original cost. The years after that would pay for any replacement inflation.

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