Loan approved for sewer collapse repairs

By: Thomas Franz | C&G Newspapers | Published February 14, 2017

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MOUNT CLEMENS — Macomb County officials have approved a $20 million loan that will help fund repairs related to the 15 Mile Road sinkhole.

The funds are specifically earmarked for the Macomb Interceptor Drainage District, or MIDD, and will come from a combination of the county’s general fund and delinquent tax revolving fund.

The MIDD will pull funds from the loan when needed and will pay back the loan within four months through a bond issue. The district will pay a 0.55 percent annual interest rate.

“It gives us a line of credit for up to $20 million for 120 days, and we will draw on the money as we need it, as invoices are coming in and need to be paid for the sewer collapse,” said Public Works Commissioner Candice Miller.

The Macomb County Board of Commissioners unanimously approved the loan during a Feb. 9 meeting.

Funds will be used to primarily pay for expenses related to the repair of the damaged interceptor near 15 Mile Road and construction of a temporary bypass line that officials expect to be completed in early March.

“Then we can all take a breath, because at that point we’ll be able to change the flow from the interceptor over to the bypass,” Miller said of the temporary bypass construction.

Miller estimated the total cost of the initial work could reach about $75 million.

Officials said sewer rates will increase for the 11 communities that are part of the MIDD, but they are unsure of how big of an increase will be needed.

“I have no idea how much they will be, but there’s 150,000 households in this drainage district, and it will be a 25-year bond issue,” Miller said. “We don’t know yet if we’re going to get outside financing from the state or federal government. Those are unknown factors, so I don’t want to throw a cost per household.”

As for the loan’s impact on the county, Macomb County Finance Director Steve Smigiel said it will not impact the county’s bond rating, and there are no concerns about a liquidity shortfall in the four-month time period of the loan.

County Board Chair Bob Smith, D-Clinton Township, credited the county’s budget processes as being a key reason for it having the ability to provide a loan to the MIDD.

“To be able to do something like that and not have it affect us for four months is a testament to how the whole budgeting of this county has been for numerous years,” Smith said. “This is one of the reasons that you’re fiscally conservative, so when something like this needs to be done on behalf of the county, we do it. We have the ability to do it.”

Miller called it a “win-win” for the district and county.

“There will be no negative impact to the county at all. We intend to pay them at an interest level of exactly what their investments are earning them right now,” Miller said. “Everyone has really wanted to step up to the plate and help in any way that we can.”

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