2003 Sewer Project – review of plans and decisions

For a review of decisions made by the Village of Bear Lake which culminated in the decision to withdraw due to cost – see Archived Minutes from 2000, 2001,  2002, 2003 and 2004.

To review the Preliminary Engineering Report – click here

prelim_engineering.pdf

and

seweradd1.pdf

“The total estimated project cost which the Bear Lake-Pleasanton Area Utilities Authority will be financing is $10.75 million. This is detailed in Table 19 and consists of the cost for collection, transmission, treatment and land cost associated with treatment.

4. Debt Retirement. Table 19 contains the estimated project cost of $10,750,000 for wastewater collection, transmission and treatment for facilities constructed by the Bear Lake- Pleasanton Area Utilities Authority. This estimated cost does not include a buy-in cost with the Village of Onekama, which will need to be negotiated between the Authority, the Village of Bear Lake and Rural Development.

An estimated payment schedule has been developed based upon a 40-year loan and an assumed interest rate of 4.5%. Under Rural Development guidelines, the area qualifies as an area of poverty with respect to median family income. Using the above project cost of $10. 75 million, the average monthly payment for debt retirement is $70.00 per month. This is based upon using 695 REUs to pay for the estimated $584,000 per year debt payment. This combined with the annual operation and maintenance monthly average payment of $10.5 per month produces a monthly average payment of $80.50 for debt retirement and operation and maintenance.”

Village of Bear Lake – Utility Authority November 3, 2003

As a result of the correspondence received recently by the BLP Utility Authority from USDA RD; the discussions with the Village Attorney; the consensus of the last Utility Authority Board meeting; and the comments made and actions taken at the October 2003 Bear Lake Township Meeting there are a number of questions and issues Council needs to come to a consensus on.

To recap:

June 2000: The Village pledged to pay $5000 as 1/3 cost of the Sewer Feasibility Study. At that time only a municipal sewer system was proposed although other treatment options were to be considered.

March 2001: Feasibility Study published.

April 2, 2001: The Feasibility Board showed a Balance on account of $2249.33

June 16 2001: Public Meeting.

On the basis of the Feasibility Study a figure of $37,5000 was proposed to fund a “Preliminary Engineering Study” which was supposed to consider a wider range of options and give a more in depth review of the demographics and volume of system that would be needed.

The only written request for funds was received in August, 2001 requesting 1/3 of $37,500 for funding the engineering study.

November 2001: Village approved payment of $2,5000.00

The Feasibility Board was formed under Urban Cooperation Act of 1967, as contained in MCL 124.501, et seq. which would have allowed the Board to apply for storm water control funding in addition to water systems and sanitary collection and treatment.

In April of 2002 that agreement was extended for another 12 months forming the BLPL Sewer Board. (But the agreement only authorized a payment of $5000 per entity, both in the original and in the extension.)

July 13, 2002 the Village Paid $5000.00

In 2002 the 2 Townships began negotiations to change the scope of the project to send treatment and collection to the Village of Onekama rather than build our own treatment facility. USDA RD indicated that might increase the likelihood of funding.

April 14, 2003: The Village paid $5000 to complete our requested funds,$12,500.00.

Under pressure from the 2 Townships the Village agreed to sign the new agreement to form the Bear Lake Pleasanton Area Utilities Authority – not signing would have effectively removed the Village from further participation in sewer/sanitation planning.

The new agreement was drafted under the MUNICIPAL SEWAGE AND WATER SUPPLY SYSTEMS Act 233 of 1955 which specifically designates funding and excludes funding for storm water control.

Glen Moore and Dendra Best were appointed to be the Village Board members with Carol Urbanus as our alternate. (Neither of the Townships have appointed an alternate member to this point.)

Following the first meeting of the BLPAUA a report was sent to Council relaying your representatives concerns and areas where there were points that needed clarification. (See the Village web site: reports are attached to the Minutes.)

Chief among them was the question of whether there were outstanding bills from the previous Board – we were told there were none.

Secondly was the issue of what stage the BLPAUA application process at to USDA RD was – we were concerned that no contract be signed or approved until we had received the Preliminary Engineering Report from Prein Newhoff and had had time to consider the projects potential impact on the community.

A draft of the Preliminary Report was received in April and Council had serious concerns that it seemed to merely repeat the information contained in the Feasibility Study with the same errors in listing the demographics plus financial errors in listing the newly increased costs and scope of rerouting the collection and treatment to the Village of Onekama.

No other options were presented for consideration in this Report. We also had serious concerns about a) the assumptions made for ‘zero growth’ ; and b) the impact on groundwater in light of our delineated Wellhead Protection area. The proposed irrigation field comes within 6/10 of a mile of the wellhead catchment and there is insufficient data to satisfy us this will not present a future pollution source.

The Final format of the Preliminary Report was received within the week without any of the requested changes being made – but a response from Prein NEwhof indicated our points of concern would be sent on to USDA RD.

The Final Report included an extension of the service area south on US31, which was added after the fact.

The Village of Onekama now has an official ‘option to purchase’ the Bear Lake Township Supervisor’s property, on Linderman and 11 Mile Road, on which they intend to construct their, and potentially our, irrigation.

At several meetings we have asked on the status of the ‘application’ – has one been made or not? It appears from the response from USDA RD that the preliminary application was sent in on May 7. The BLPAUA met on May 21 and did not approve that action until that time. We believed we were seeking a provisional opinion only.

Council requested our Attorney review the 2 contracts being presented for approval – presented as being a precursor to any application. On his advice we requested additional language be included in both the contract for legal and engineering services. We also asked that no contract be awarded without a formal bidding process. Attorney Wilson asked for and was awarded the contract for legal services. It was our understanding that his contract did not come into effect until we accepted a USDA RD award.

The Preliminary Engineering Report speculated that the monthly fee ( including construction and debt repayment costs) would be @$80 per month for a single family dwelling, or REU (residential equivalency unit) That figure would be multiplied for larger units such as the schoool or reataurants based on a USDA RD formula,

HOWEVER – the Report also noted several areas where there would be additional costs which could not be estimated – chief among them being additional legal fees, and a ‘buy-in’ per month cost to be levied by the Village of Onekama for operating collection and treatment at their facility on our behalf – the figure stated by them was $21.67 per month in addition to the proposed $80.

It should also be noted that the debt repayment cost is for the maximum of 40 years and interest rate was estimated at poverty rate of 4.5% – and that monthly sewer bills would be sent out whether a resident was here for 3 or 12 months.

The Village has consistently requested a full projected Budget be prepared for us to adopt, as is required under the Articles of Incorporation of the BLPAUA.

Act 233 states: 124.293 Authorization to raise or pay money for administrative expenses or other purposes; direct taxing power.

Sec. 13.

The legislative body of each municipality which is a member of the authority is authorized to raise by tax or pay from its general funds, any money required to be paid by the articles of incorporation for administrative expenses or for the purpose of obtaining maps, plans, designs, specifications, and cost estimates of a proposed sewage disposal system, water supply system, or waste management system. The authority shall not have direct taxing power.

Neither of the 2 Townships has adopted such a budget, merely agreeing to pay $6,1000 to the Utility Authority. Under both the General Law Village Act and Uniform Accounting Standards the Village may not amend its operating budget capriciously. As we have not been asked to allocate additional funds none were included as a line item in our FY2002/3 or FY2003/4 Budgets.

Council approved a letter to be sent to Bear Lake Township Clerk and presented to the BLPAUA Board stating our legal position.

The BLPAUA declined to prepare or adopt a full line item budget – deciding instead to merely present a 3 line item request for legal, admin and general engineering costs. Glen and Dendra voted to present this Budget for Council to consider but it was our advice that Council reject it as inadequate.

A request was sent to the Village for a payment of $6,100.00 to cover (in conjunction with an equal payment from the 2 Townships) the outstanding bills, plus Attorney Wilson’s projected services for the coming FY, plus an additional amount to cover projected Engineering costs.

Upon learning that Prein Newhoff and Attorney Wilson had outstanding invoices Council requested copies of all invoices paid by Bear Lake Township toward both the Feasibility Board and the Sewer Board. An itemized listing was given to Council at its October meeting. It should be noted that Bear Lake Township charged a 25 center per sheet copying fee for allowing us access to the bills we were being asked to pay.

It is our contention a 3 line Budget does not meet the test for government accounting standards. In addition the Village net revenue cannot accommodate unlimited additional requests for money for over-extended expenditures of the Utility Authority. We need to know in advance. The UA seems willing to amend their ‘budget’ as and when they need to.

The additional concern is that, as Village residents pay tax to both the general fund of the Village and Township, Village residents are bearing an unfair proportion of the total fees.

We are insisting that proper fiscal controls be put in place to control costs and return responsibility for Authority activities to the Authority Board. It is our belief that if such fiscal controls had been in place the level of unauthorized expenses would have been properly curtailed or at least pre-approved.

October 2003 USDA RD Proposal:

It appears that an official application was sent to USDA RD for consideration, limiting the project to be considered solely to a joint facility with the Village of Onekama – an expansion of the original project which explains why the cost of the project has risen consistently since 2001. There is a substantial increase in the scope of construction, transmission and treatment, and hence legal and admin expenses, which are a fee based on a % of the total.

The characterization that the cost has increased because of delaying tactics by the Village is both erroneous, discourteous and inflammatory.

We have consistently asked that this project be held to accountable standards and that it be accountable to the tax paying public. It should be remembered that Village residents are being asked, in effect to pay 3 times, in Village, Township AND Federal tax dollars.

The terms of the letter from USDA RD were read into the October Minutes of the Council Meeting. Upon realization that the terms were at a higher interest rate than 4.5%, plus that the ratio of loan to grant money would place an unacceptable burden on residents of the Village, Council voted by unanimous motion to respectfully decline the offer as presented.

Council did not intend that to be construed as a total withdrawal from the BLPAUA but merely that the terms and the project as presented, in our considered opinion, were unacceptable to Village residents.

It was also noted, in the correspondence from USDA RD, that they had the same doubts about specific assumptions and generalization made in the Preliminary Engineering Report as we had expressed in May to Prein Newhoff. USDA RD also questioned how the engineering fees had been calculated and expressly stated that the Report as presented had not documented definitive data showing ‘need for the project’.

These matters, plus the receipt of the Environmental Report were discussed at the last Utility Authority meeting.

Specifically it should be noted that within the Environmental Report is a letter questioning the capacity of the soils in the proposed irrigation area to accommodate the volume of liquid without significant drainage to the aquifer and speculates that this may result in contamination of area drinking water wells.

Council may recall we sent the same concerns in a letter following the publication of the Wade Trim Environmental Report for the Village of Onekama’s part of this project earlier this year. We have formally asked for a copy of the results of the hydrology studies being done on the property. It should also be noted that an area of high ground water pollution has been documented to the south east corner of the proposed irrigation field caused by dumping of PCA sludge.

A proposed course of alternate action:

It is appropriate to restate here the fact that it is the Village which has gone out of its way to keep the public informed about this project. We published an information newsletter prior to the first Public hearing; we published the Feasibility Study on our web site; we have also kept the public informed about our questions and concerns of the administration and design of the system; we published the Preliminary Engineering Report in total on our web site where over 800 people have read it.

And now we offer our suggested retooling of this project.

In view of the figures being quoted, the considerable gaps in projected expenses, the repeated advice from USDA RD themselves in their letter that funding MAY only be available in 18 months, in view of a realistic appreciation of the income levels, and publicly voiced opposition, of our residents, (both Township AND village) we offer an alternate path.

Begin by granting the Village’s share of payment of per diem expenses of our Representatives, plus $1000 toward the additional legal fees, while recognizing that we did not approve those fees. = $3.020.00

Mandate that no additional fees shall be incurred while we proceed to further investigation of alternative options.

It needs be restated here WHY we began this research, consideration and planning of how best to protect the groundwater and public health of our community in the first place.

* We are a community with the ‘potential’ for growth.

* Many of our single family homes within the Village are 3 bedroom homes occupied by single older adults or currently have no children present.

* All our homes are within close proximity to our neighbors.

* ALL our streets flow downhill to the Lake. The Lake is our chief cultural, environmental and economic asset.

In the Village our municipal drinking water supply is protected and monitored stringently. HOWEVER, we and our neighbors are dependent on the same underground aquifer – we know from our Wellhead Protection report that within 40 years we will be drinking the water that came into the aquifer today.

We have no accurate documentation of the age and condition of current onsite septic systems and drain fields. We know it is good policy to have a septic tank pumped every 2-3 years but how many residents actually do that?

We know it is a dangerous and bad practice to put man made chemicals into a septic tank and drain field but we all do that every day. When we talk about groundwater contamination from septic tanks and drain field, it is as important to consider chemical pollutants as it is human wastes and gray water.

Human waste degrades naturally, high concentrations of chemicals do not. We have only to remember the devastating consequences of the PCA sludge dumping and other toxic spills in our area to realize the seriousness of ground water contamination. A single failing septic system may seem trivial – but multiply that by how many individual systems we have in the Village. One individual may be a conscientious home or business owner – but is it fair to them if their neighbor is not?

The Village storm water control system is outdated and simply does NOT work. Unfortunately, by reforming the BLPAUA under Public Act 533 we cut off our source of funding for bonding to rebuild or redesign that storm water control system.

In the 3 years we have been on this journey, technology and DEQ regulations have changed. Solutions which may not have seemed viable in 2000 are eminently viable today.

We agree with USDA RD. Apocryphal, anecdotal statements will not do.

We simply have not done enough groundwork to document the need for a full-blown  municipal sewer system, Moreover, to build such a high cost civil engineering project requires far more resources than this community is currently able or willing to devote or envision.

HOWEVER- doing nothing is NOT an option. If the sewer is the ‘Cadillac’ option – what can be done to protect the groundwater and the public health without subjecting ourselves to a debt of $11.5 – $14M for the next 40 years?

We ask Council to consider returning this challenge and responsibility to the individual. Are we, as a community, prepared to police ourselves?

1) Accept that we are all in this together and eliminate the ‘us and them’ finger pointing. The Village has maintained an informed and professional approach to this issue – we should continue that way. A fouled lake is a fouled lake whether you live on its shores or in the Village. An overflowing septic system stinks whether you are a lakefront property owner or live on Maple Street. At the moment the Lake is NOT polluted – what are we, the community as a whole, going to do to prevent that from happening?

2.) Begin preparing a mandatory septic system monitoring program – look for funding to install small data loggers in every septic tank to document which are working and which are not. Run them for a full 4 seasons to get a real life picture of how this community changes in composition throughout the year.

3) Adopt an ordinance to require a mandatory inspection and pumping of septics every 3 years. Include testing to see if the drain field is saturated and needs to be replaced.

4.) During the year of data logging, look for sources of funding to establish a loan/grant program to help people who simply can’t afford to replace their aging septics.

5) Adopt the same regulations covering septic installation as are currently in use elsewhere – which require gradual increase of filtration devices on existing septic systems in direct relationship to how close your property is to the water front or to the water table.

6) Look at the option of installation of small ‘community’ treatment systems, whereby a street or a block of property could use a central collection point, treatments and drain field. This would specifically benefit downtown business development.

7) Explore the option of contracting with a private entity to build, operate and maintain an central treatment facility as a public/private utility – or contract with the Village of Onekama to accept and treat the contents of mandatory emptying of current septic tanks. This is already being done by other small communities such as ours – why not here? Admit we simply don’t have the personnel and sophisticated expertise to ‘hand hold’ a project of this magnitude but also recognize that leaving it to others to make our decisions for us doesn’t always give the result we were anticipating.

8) Form a community ad hoc advisory committee to do GIS mapping of who lives here now and what the actual current and potential volume of usage is. (Which is what we all thought would be the result of the Preliminary Engineering Study.)

10) Consider reforming the BLPAUA under a return to the Urban Cooperative Act and allow all 3 units of government to explore ways to control run off storm water pollution as well as seek funding for sanitary systems and treatment.

11) In short, our proposal is to respect what we have learned, not blast it as an utter waste of effort – but rather look at it as finding out what we CAN’T do – which now gives us an incentive to go back to the drawing board to find a better way, one that our community can live with economically and will sign on to as plain common sense.

We may not be able to afford our ‘Cadillac’ in this year 2003, but in 2008 or 9, who knows what the economic climate may be?

If we can get the job done within the next 3 years by putting in place a perfectly workable protection plan based on inspection, regulation of compliance and making onsite replacement resources available to anyone – isn’t that a more fair and equitable solution?

Isn’t the bottom line to make sure we all follow the same rules and practice plain common sense?

The argument is that one sewer system is better than 300 points of potential contamination, but what if we could take simple steps to ensure that the vast majority of those 300 systems were up to date, in compliance and working properly?

We are suggesting a more practical and pragmatic solution, one that we can put in place today, one that will protect our community without bankrupting us, and one that treats everyone, regardless of personal wealth or property value or location, equally.

Respectfully:

Dendra Best.

Glen Moore.

December 12, 2003

2 thoughts on “2003 Sewer Project – review of plans and decisions

  1. If I’m reading this right, it was 10 million back in 2003 and now it is 60 million? It would have been $70 a month back then? Seriously?!

    1. See Village Council Minutes: October and November 11, 2003
      October 14, 2003
      New Business: Pay the BLPUA Budget Request. Dendra provided a break down of the BLPUA bills. Dendra feels that the Village may not responsible for some of the bills incurred by the BLPUA, we will wait for an opinion from the Village Attorney. Dendra read the letters received from USDA Rural development listing the tentative offer of future fundaing at $8,363,000.00 in the form of loan and $2,500,000.00 as a grant. A copy of the letter is attached to these minutes. Total costs are $11,409.806.00. Motion made by Dendra seconded by Vern that Rural Development loan/grant offer is not acceptable. Motion carried. Responses to the survey that went out with the water bills, concerning the sewer project; came back as follows: 9/for; 33/against, 1/yes, if it is affordable….

      November 11, 2003
      Sewer: President Moore and Dendra Best met to discuss and compile a Report To Council on the sewer project, the correspondence received from USDA Rural Development, and alternative options available to us. After discussion, Council requested a copy of that Report be attached to these Minutes. Village Attorney Hyrns was consulted on the several issues with which Council had serious concerns…. Council determined that with little public support and no financial controls in place to contain costs it was time to withdraw.

      …October 2003 USDA RD Proposal:

      It appears that an official application was sent to USDA RD for consideration, limiting the project to be considered solely to a joint facility with the Village of Onekama – an expansion of the original project which explains why the cost of the project has risen consistently since 2001. There is a substantial increase in the scope of construction, transmission and treatment, and hence legal and admin expenses, which are a fee based on a % of the total….

      ….The terms of the letter from USDA RD were read into the October Minutes of the Council Meeting. Upon realization that the terms were at a higher interest rate than 4.5%, plus that the ratio of loan to grant money would place an unacceptable burden on residents of the Village, Council voted by unanimous motion to respectfully decline the offer as presented…..

      …The Preliminary Engineering Report speculated that the monthly fee ( including construction and debt repayment costs) would be @$80 per month for a single family dwelling, or REU (residential equivalency unit) That figure would be multiplied for larger units such as the schoool or reataurants based on a USDA RD formula,

      HOWEVER – the Report also noted several areas where there would be additional costs which could not be estimated – chief among them being additional legal fees, and a ‘buy-in’ per month cost to be levied by the Village of Onekama for operating collection and treatment at their facility on our behalf – the figure stated by them was $21.67 per month in addition to the proposed $80….

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