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Macomb Township to pay for drain improvements in bond installments

By: Alex Szwarc | Macomb Township Chronicle | Published July 21, 2020

 Earlier this month, Macomb Township agreed to pay for the next construction segment of improvements to the Oakland-Macomb Interceptor Drain in bond installments.

Earlier this month, Macomb Township agreed to pay for the next construction segment of improvements to the Oakland-Macomb Interceptor Drain in bond installments.

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MACOMB TOWNSHIP — Macomb Township, like other area municipalities, is required to take part in paying for the next construction segment of improvements to the Oakland-Macomb Interceptor Drain.

The only decision to be made was the manner in which it would be paid.

At the July 8 Macomb Township Board of Trustees meeting, the board unanimously approved a resolution to pay in bond installments. It also had the option to prepay.

The drain serves 850,000 residents in Macomb and Oakland counties and is 22 miles long.

The first series of bonds for the extension and improvement project assessment will not exceed $84 million. Macomb Township’s share is almost 9.5%, amounting to $7,842,075.

On June 22, Macomb Township Treasurer Karen Goodhue received a letter from Macomb County Public Works Commissioner Candice Miller and Oakland County Water Resources Commissioner Jim Nash.

The letter indicates that the drainage board for the drainage district will soon commence the next construction segment of improvements to the drain.

“They are going to start a project to fix the Oakland-Macomb Interceptor,” Goodhue said. “All the communities that are serviced by it, which we are one, are asked to help pay for the bonds.”

The project calls for electrical and mechanical equipment at a pumping station and rehab approximately 7 miles of sanitary sewer.

The township, which is required to pay for part of the project, will have 21 installments, through 2041. Its first bond, for the fiscal year ending June 30, 2021, is expected to be $67,366.

After meeting with other township officials and analyst Dawn Lund, vice president of Utility Financial Solutions LLC, Goodhue said the group saw the factors and different projects in the water and sewer department’s capital improvement plans for the future.

Goodhue said the drain commission apologized for not giving the township more of a notice. It had to receive an answer from the township on which payment route it chose by July 22.   

She explained that in looking at the capital improvement plan, money is allocated for certain future projects.

“If we decided to pay out the amount up front, we would deplete that amount,” she said. “We can’t see into the future to see what water rates will be. It also affects our credit rating if we prepaid.”

The interest rate is 2.25%, with the township paying around $100,000 a year in interest.

Clerk Kristi Pozzi said going the installment way gives the township a better opportunity at getting a future bond, opposed to in a few years depleting the water and sewer cash fund.

A third bond is anticipated for $15 million next summer, with the township paying over $1.4 million.

Other Macomb County communities that contribute toward paying for the drain include Clinton Township, Fraser, Harrison Township, Shelby Township, Sterling Heights and Utica.

Also at the meeting, Macomb Township Parks & Recreation Director Sal DiCaro was reappointed to serve on the township’s building authority. His former term ended June 30, and the current term expires June 30, 2023.

Related to the building authority, the board also approved to appoint a committee to update building authority bylaws.

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