Sanitary system to reorganize for purchase

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published September 12, 2017

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ST. CLAIR SHORES — The cities of St. Clair Shores, Eastpointe and Roseville have taken the first steps to reorganize what was a joint venture between the three cities — the Southeast Macomb Sanitary District — into a Public Act 233 entity capable of applying for grants, issuing bonds and purchasing sewer infrastructure from Wayne County.

St. Clair Shores Mayor Kip Walby, who is that city’s representative on the SEMSD, said that the district was approached by Wayne County in 2015 and was offered the opportunity to purchase Wayne County’s Northeast Sewage Disposal System. The SEMSD is a customer of the NESDS, as are the cities of Harper Woods, Grosse Pointe Woods, the Village of Grosse Pointe Shores and the Milk River Intercounty Drain Drainage District, which includes some of those municipalities.

The SEMSD makes up 75 percent of the NESDS, however, which is why Wayne County first approached it to purchase the system, which transfers sanitary waste through the Fox Creek drain and further on into Wayne County. Out of the 170,000 residents using the NESDS, 140,000 of those are Macomb County residents, Walby said. 

“The SEMSD already takes care of pump stations and Martin Road and thousands of miles of sanitary pipes,” he said Sept. 5. “This is what they already do, and that is why it’s a perfect fit.

“The option of someone else running it was going to happen, and we decided that it should be SEMSD.”

The first step in purchasing the $4 million worth of assets — which also come with $13 million in debt that SEMSD is currently paying for through charges from Wayne County — was for Roseville, Eastpointe and St. Clair Shores to all approve the adoption of articles of incorporation establishing the SEMSD under Public Act 233. Currently, it is an Act 129 entity, which provides it different powers and authority.

“It does provide broad authority that currently doesn’t exist under Act 129,” Joseph Colaianne, senior counsel at Clark Hill, who was hired by the SEMSD to work on the project, said at the Aug. 15 Eastpointe City Council meeting.

The St. Clair Shores City Council discussed the matter twice before voting to approve the articles Sept. 5. The first time the matter was introduced, Aug. 21, Colaianne told council members that the Act 233 statute allows the system to utilize eminent domain and issue general obligation debt or revenue bonds, as well as allow the SEMSD to set up contracts with “multiple types of municipal entities,” thus allowing it to purchase the system from Wayne County.

 He said that they don’t anticipate much use of eminent domain because there aren’t any large gaps in the system where the entity would need to seize private property to expand. In addition, he said the system is located in Wayne County, so any potential exercise of eminent domain would not affect the residents of St. Clair Shores, Roseville or Eastpointe.

When St. Clair Shores discussed the issue again Sept. 5, Walby said that there are no plans to increase the debt to the system once it is purchased by the SEMSD.

“Rates may go down or not increase as much,” he said. “That’s part of the goal of this whole program.”

The Eastpointe City Council unanimously approved the articles of incorporation Aug. 15. The St. Clair Shores City Council unanimously approved the articles at its Sept. 5 meeting. Roseville City Council members voted 6-0 on the articles of incorporation Aug. 22, with Councilwoman Catherine Haugh not present.

The next step in the process, Colaianne said, is to draw up a contract to authorize the SEMSD to operate the system. That also will have to come back to all three cities for approval, he said. And as part of the terms of the contract, he said that language could be added requiring the SEMSD to come back before the three city councils for approval of any exercise of eminent domain.

 Colaianne said that the articles mirror the current situation of the SEMSD in that it is a three-member body that operates on majority rule, with certain decisions requiring a unanimous vote. That will not change with the move to Act 233 incorporation, he said. 

And now, Walby said, the sewage rates from the Great Lakes Water Authority will come directly to the SEMSD instead of passing through Wayne County, which also may have added on a cost.

Colaianne said the adopted articles will be published and filed with Macomb County and the state of Michigan while work begins on the contract.

Staff writer Bria Brown contributed to this report.