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2017-12-13 / Letters to the Editor

Letters to the Editor

Dear Editor,

As the lead consultant responsible for Project Rising Tide I would like to respond to two issues of community concern: the Community Master Plan and the Utility Rates.

First, I would like to address the concerns expressed in a local petition sponsored by Newberry resident Mike Schnorr. This petition expresses its displeasure of the Community Master Plan for suggesting that the Village of Newberry evaluate the possibility of becoming a Home Rule City because it will ruin local relationships between the Village and adjacent townships, and the concern about a zoning ordinance preventing local cottage industries/businesses.

As noted by Mr. Schnorr the Community Master Plan does recommend that the Village consider the preparation and adoption of a zoning ordinance. A zoning ordinance helps protect property values, regulates where non-residential uses can be located in the community, and provides for the enforcement of rules and regulations. Mr. Schnoor states in the petition that “the proposed zoning fails to recognize the importance of cottage industries operating within residences to the area's economy and culture.” Actually, the zoning ordinance would encourage home occupations and cottage industries because they are an integral part of the 21st century economy. Page 71 of the Community Master Plan states, “The Village is committed to supporting existing businesses to help them continue to grow and react to changing conditions. Additionally, Newberry is looking for opportunities to support small business development and entrepreneurs.” The Action Plan on page 73 encourages the Village to “explore economic gardening and incubator efforts to support small business development and entrepreneurs.” A component of economic gardening are home occupations and cottage industries. Mr. Schnorr’s contention that the Master Plan will prohibit these businesses is untrue.

Mr. Schnorr’s petition also implies if the Village changes to a City it will impair relationships with adjacent Townships. The rationale to consider changing from a Village to a City is focused on fiscal concerns and restructuring local government to provide more efficient services to Village residents. Currently, Village residents pay Township taxes and the transformation of the Village to City would result in retaining those revenues in the community for the benefit of Village residents. It doesn’t matter if the Village stays a Village or becomes a City, relationships are developed between people not units of government.

Lastly, I would like to address the Letter to Editor authored by Eric Buckler, P.E., former Superintendent of Newberry Water and Light. Mr. Buckler’s letter is based on his opinion and not the facts associated with reasons behind the utility rate increases. The Village of Newberry between 2002 and 2014 has borrowed $8,359,000 for water system improvements, $5,143,620 for sanitary sewer improvements, and $3,820,000 for electric system improvements. Collectively, this amounts to $17,322,620 resulting in annual bond and loan payments in the amount of $965,066.

Ongoing correspondence between the Village and USDA Rural Development focused on the lack of sufficient utility revenues to pay for water bond and loan payments. As a result, the Michigan Economic Development Corporation, through Project Rising Tide, provided the Village with additional funds to retain Plante Moran, a highly respected accounting firm that specializes in municipal finance, to review the general fund and the respective utility funds, also known as enterprise funds. Their 2017 budget analysis stated, “The Enterprise funds (water, sewer and electric) are using cash at an accelerated rate as a result of poor utility rate development. If not addressed soon, this will begin to affect the General Fund which will be forced to step in and provide financial support.”

Plante Moran’s Use of Cash analysis based on audited statements of cash flow indicated that since 2012 (the period that Mr. Buckler was Superintendent) the electric, water and sewer funds were operating in a negative cash flow position. Failure to revise the utility rates was not an option for the Village. The bond and loan documents specify that if the Village defaults on their obligations the Court will appoint a receiver to run the utilities in order to maintain solvency.

As a result of the Plante Moran memo the Village collaborated with Michigan Rural Water who provided technical assistance to review the utility rates. Utility revenues come from utility usage and general fund revenues come from taxes. You can’t mix utility revenues with general fund revenues as decided in the legal decision Bolt vs. City of Lansing. Each utility fund needs to account for its own operational expenses, distribution and collection costs, debt payments and capital improvements.

The Michigan Rural Water model accounts for operational expenses (personnel, benefits, equipment, supplies, etc.) debt payments, debt reserve fund (required by USDA) and anticipated capital improvements. This amount is then divided by the number of utility users resulting in the rates needed to pay for the expenses. A big portion of the expenses in the water and sewer rates is the annual debt service payment needed to pay off the $13,502,620 borrowed by the Village since 2002.

Mr. Buckler also mentioned that AECOM the engineering firm that worked on the water system upgrades was not consulted about the rate evaluation. This was not correct. A meeting was held with AECOM (water system consultant) and C2AE (sanitary system consultant) to discuss rates and future capital improvements. Both firms provided future projects that were factored into the Village Capital Improvement Program (CIP) resulting in $3,489,211 for full infrastructure (water, sewer and road improvements) to six streets in the Village and $990,000 for DPW, water and sewer equipment. And since the first draft of the CIP was issued in April 2017 a future water tower and several other projects need to be added to the list.

What Project Rising Tide brought to the community was technical assistance to reinforce and strengthen Village finances, recommend actions to stabilize the general fund and utility funds, develop a long range plan for the Village, assist the Newberry Area Tourism Association, and work with elected official and business leaders to position the Village and greater Newberry area for economic growth. The current administrative staff of the Village is reorganizing the Village to work more efficiently as a municipal government based on best practices used by other Michigan municipalities. We look forward to continuing this work in 2018 and I would like to wish all Newberry residents a Merry Christmas and Happy New Year.

John Iacoangeli, AICP, CNU-A, LEED AP
Principal
Beckett & Raeder, Inc.
Landscape Architects, Planners & Engineers

In order to address questions received and information that is either misleading or misinformed, or misinterpreted, I am writing this letter to take a look at the draft Master Plan for the Village of Newberry. Specifically, there are two issues that are being bandied about concerning the draft Master Plan: 1) Newberry is going to become a city, and 2) that zoning will hurt cottage businesses and result in reduced property values, restrict property rights, and that businesses will be penalized substantially for starting up a business in the village limits.

A Master Plan is just that, a plan. It is a vision of what the village could look like in the next 10-25 years, and how to improve to get to that vision. A Planning Commission looks at different elements, including: transportation, housing, economic development, natural resources, recreation, services, the goals, and implementation. A plan is drafted, public comment is received, and a Master Plan is either adopted or not adopted.

During the process of drafting the Master Plan, advertised public meetings were held to get stakeholders input on a vision for Newberry. These stakeholders included: residents, business owners, and property owners.

The biggest question is: Why have a Master Plan at all, when we haven’t had one before?

There are a couple of big reasons. One is that in order to qualify for certain grants from Lansing, a municipality needs to have a Master Plan. Another reason is that a community, no matter what the size, should have a plan for the future and how to achieve that plan. As individuals, we plan all the time. Whether it be for the holidays, appointments, or vacations. It’s something we do. A community needs to have a goal to shoot for, whether it be more tourism, industry or housing, or all three. The Master Plan gives the people of Newberry a positive goal and a way to achieve that goal.

Will adopting a Master Plan make Newberry a City? NO. On page 72 of the DRAFT Master Plan, a goal is to “Explore the establishment of Newberry as a city.” It is given a high priority and the time frame is 1 year, to explore the possibility that Newberry become a city. It does not state that Newberry will become a city. Exploring becoming a city is a high priority in the Master Plan because, if after study and public input at the beginning, there isn’t enough support, is goes on the back burner for a long time. It’s about doing due diligence and exploring ways to make Newberry better.

In order to become a city, a village must go through a process that would likely take 3-4 years and some 20 steps. A committee has to be formed that would investigate and study all of the issues, costs and benefits that the community would have when transforming from a village to a city. And there would be a lot of public input, and a public vote. There are a lot of hurdles on purpose, to make sure things are done correctly and with public input.

No, the Master Plan does not make the village a city. To say that is to manipulate what the document says.

The Master Plan also does not make zoning ordinances. A zoning commission does. Does Newberry have a zoning commission? NO. The Master Plan does speak to zoning on pages 67-68. It does not make zoning ordinance. Will small businesses be penalized by the Master Plan? NO. The Master Plan is a plan, not an ordinance. Will the Master Plan restrict property rights? NO. It is a plan.

To say that the Master Plan will do things that it will not, is at best, misinformation. I cannot say as to the motivation to make the Master Plan do more than it can. The Master Plan is a vision for the future. The future of Newberry. The planning commission wants Newberry to be vibrant, for residents and visitors alike. The planning commission wants Newberry to hold onto the uniqueness that makes Newberry the way it is. It’s people are great and should be celebrated.

Lawrence Vincent
Village of Newberry Planning Commission Chair.

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