County board authorizes bonding for sinkhole

By: Thomas Franz | Fraser - Clinton Township Chronicle | Published March 21, 2017

MOUNT CLEMENS — Residents in communities that are part of the Macomb Interceptor Drain Drainage District, or MIDD, now have a clearer view of how much of a financial impact they will see in order to fund repairs to the Fraser sinkhole.

On March 15, the Infrastructure and Economic Development Committee of the Macomb County Board of Commissioners approved a resolution that pledges the county’s full faith and credit on drain bonds by a 10-1 vote. It effectively authorizes the MIDD to issue up to $240 million in bonds for funding repairs to the sinkhole.

The commissioners then unanimously approved the authorization in its finance committee and full board sessions March 16.

The approval means that in a worst-case scenario where the entire $240 million would be needed and used, each home in the MIDD would pay $55-$60 per year for 25 years. Residents would see the increase on their sewer bills. Residents who don’t use the city sewer won’t be impacted.

“This will provide a much better interest rate than we could get on the bond market without the full faith and support of the county,” said Brian Baker, the chief deputy public works commissioner.

Financial adviser Bobby Bendzinski said during the March 15 meeting that the bonds issued as part of this project would have about a 3.25 percent interest rate.

Of the program’s $240 million, $90 million already exists from a 2010 bond that would be refinanced in order to have a better interest rate. County officials estimated savings from that refinancing to be about $2 million.

The 2010 bond relates to the purchase of the interceptor from the city of Detroit, Baker said.

For the remaining $150 million, the funds would be split into two halves, with the first half going toward fixing the sinkhole. The other half would go toward lining repair of the remaining length of the interceptor, but it has yet to be determined if that work will actually come to fruition.

Baker said that a $1.5 million SAW — or Stormwater, Asset Management and Wastewater — grant is being used to inspect the condition of the interceptor to see if the second half of the project is necessary, and the results of that study would be available this fall.

If it’s determined that more work beyond the repair of the sinkhole would not be needed, residents would see an increase of $25-30 per year, as opposed to the $55-60 estimate.

Baker said that the county was notified earlier in the week prior to the March 15 meeting that it would be receiving a $2 million grant from the Michigan’s State Administrative Board.

As for the actual repair of the sinkhole, Baker said the public works team is on target for finishing repair work by the end of September, so that road repairs on 15 Mile Road could be completed by the end of November.

A contract was awarded to Dan’s Excavating March 13 in the amount of $32.7 million for the actual repair work on the sinkhole.

“One of the first actions we took was soliciting bids on the repair,” Baker said. “We awarded it to the lowest bidder and the most qualified bidder who can get the job done in a quicker amount of time to save the ratepayers money.”

Work on the repair of the sinkhole is scheduled to start around March 27, which is when Baker estimated the long-term bypass around the sinkhole would be completed.

County Commissioner Andrey Duzyj, D-Warren, was the lone dissenting vote during the infrastructure meeting March 15, but he voted for it in finance and full board meetings later in the week.

“I didn’t like how it was done by combining all of this stuff. I understand we’ll be saving $2 million further down the line, but I didn’t like combining it,” Duzyj said. “We have to keep the taxpayers and the people who are paying these bills at the forefront of all of these deliberations.”

Baker said there was an initial offer of compensation made March 13 to homeowners who won’t be able to return home because of the sewer collapse. He added that his department is also close to reimbursing families who had to temporarily vacate their homes in the days shortly after the sewer collapse.