Officials to pay interceptor upgrade bill over time
Macomb Township recently selected the installment plan for its portion of the Oakland/Macomb interceptor drain project, with board members citing concerns about depleting water and sewer funds as the reason for denying a lump sum payment.
On June 8 during an audio-conferenced Board of Trustees meeting, Treasurer Karen Goodhue presented information regarding the Oakland/Macomb interceptor drain extension and improvement project.
“This was a surprise. We did not anticipate this one,” Goodhue said.
Goodhue also made the motion to deny prepayment of the township’s costs for the drain project, which was seconded by Trustee Nancy Nevers.
Goodhue confirmed that instead, the township would pay installments. The board adopted the resolution unanimously.
On June 22, Goodhue received a letter signed by Macomb County Public Works Commissioner Candice Miller and Oakland County Water Resources Commissioner Jim Nash stating a project was in the works to fix the Oakland/Macomb interceptor drain. She said all communities serviced by it, including Macomb Township, would be asked to help pay for bonds on it.
“It is an $84 million bond. Our portion is $7,842,075.36 if we decide to prepay. We need to pass a resolution to either prepay or make this in installments,” Goodhue said.
Trustee Charles Oliver
said that the township had to pay the bill, it only had the option of determining how to do it.
“I have to say that the drain commission did apologize for the short notice because we do have to give them an answer by July 22,” Goodhue said.
The June 22 letter indicates the drainage board for the Oakland/Macomb Interceptor Drain Drainage District would soon begin the next construction segment of improvements to the Oakland/Macomb interceptor drain. The project will replace the electrical and mechanical equipment at the northeast sewage pumping station and rehabilitate about seven miles of the northeast interceptor east arm sanitary sewer.
The $84 million cost will be financed through issuing the 2020A bond series.
It further outlined that on June 17, the drainage board approved assessment roll number one relating to the series 2020A bonds for the work.
“They are selling the bonds, and we need to make the payment, our portion of the payment on the bonds,” Goodhue said.
Each community involved has the opportunity to prepay all or a portion of its assessment before each series of bonds are issued.
To do this a resolution
Each community involved has the opportunity to prepay all or a portion of its assessment before each series of bonds are issued. To do this a resolution needs to be adopted by individual boards or councils indicating interest in prepaying the assessment, and the amount of prepayment. According to the letter, communities that select not to prepay will be included in the series 2020A bond issue and assessments will be collected over 20 years.
needs to be adopted by individual boards or councils indicating interest in prepaying the assessment, and the amount of prepayment.
According to the letter, communities that select not to prepay will be included in the series 2020A bond issue and assessments will be collected over 20 years.
The letter also listed the anticipated bond sale date of about Aug. 19. Information included with the letter indicates that another bond issue for an estimated $15,000,000 is anticipated for approximately the summer of 2021.
Clerk Kristi Pozzi said that for Macomb Township this will be about $1,415,160.
Goodhue said that at a recent meeting including some township department heads, a review was presented of factors and projects in the township’s capital improvement plan for water and sewer. Board members were later asked to review the same information.
Goodhue said that the capital improvement plans for the township’s water and sewer indicate between four and five different items that will need fixing.
“That money is allocated for those different capital improvement plans. If we decide to pay out this whole amount up front it would deplete that amount,” Goodhue said.
Goodhue further said there is also uncertainty as to water rates in the future.
“It also affects our credit rating, it depletes, you know, it depletes us right down. So it was suggested at the meeting that we not prepay it and make the installments instead,” Goodhue said.
The installment plan involves 21 installments for Macomb Township, out to the year 2041.
“It looks like it would be about $2.5 million in interest over that period of time,” Goodhue said.
Pozzi said that by choosing the installment plan, the township will be in a better position with regards to bonds.
“We have these capital improvement projects already anticipated which is going to deplete our cash fund in the water and sewer department. So right now if we choose to go in and take the installments we’re at a better, we will have a better rate at getting a bond, a better opportunity of getting the bond versus in a few years when we significantly deplete that fund with projects anticipated,” Pozzi said. “So that was something they brought up as well is that if we are going to go the path of installments it is better to do it now than later because of the anticipated projects we have coming.”
Also on July 8, the Macomb Township Board of Trustees:
• Awarded construction materials testing for the 2020 pathway gap closure program in the amount of $17,980 to Testing Engineers and Consultants, Inc. Engineer James Van Tiflin said that at a prior board meeting, the board awarded the 2020 pathway gap closure program construction contract, and that construction was set to start shortly. The materials testing firm will ensure that materials placed meet township specifications, Van Tiflin said.
• Reappointed Parks and Recreation Director Salvatore DiCaro to the building authority with a term to expire June 30, 2023.
• Approved a motion for a committee to update and examine the bylaws for the building authority.