City Prepares for $4.3 Million Wastewater Treatment Plant Improvements
Auditor Reports Budget Deficits; Governor Freezes Bus Station Funding
By Ryan Schlehuber

St. Ignace City Council, hired Wilcox Professional Services of Escanaba Monday, May 7, to find $4.3 million to upgrade its wastewater treatment system. The engineer consulting firm will seek federal and state grants. Council also received its 2006 audit report and was told funding for construction of the city's new bus station has been frozen by the state.

The wastewater treatment system project includes replacement of the vinyl liners at the wastewater treatment plant's six ponds in Evergreen Shores, the wastewater disinfecting system, a lift station on the north side of town, two force mains, and a half-mile of sanitary sewer lines. No new sewer lines will be added.

An upgrade also is planned for the plant's effluent screening machine, which prevents refuse from being discharged into Lake Huron.

The city is bound by a Michigan Department of Environmental Quality administrative consent order to make improvements to its wastewater treatment system by November 15, 2008. The city has been making improvements to its force main section by section, when it could afford it, for several years.

The city's Heritage lift station at the north end of town and liners at its ponds area must be replaced by 2009. One pond has been off-line since last year owing to deterioration.

The city's wastewater treatment plant serves approximately 1,200 customers in the city and in Moran and St. Ignace townships. The city's wastewater treatment system utilizes aerated lagoons and ultraviolet disinfection with a rated capacity of 1.5 million gallons a day. The wastewater collection system consists of four major lift stations and approximately 90,000 feet of 6-inch to 27-inch gravity sewer.

Chuck Lawson, the consulting leader for Wilcox, explained that the city could have several funding options available. One would be to split the costs between two grants, funding improvements to the sewer collection lines and force mains with the United States Department of Agriculture (USDA), and paying for improvements to the wastewater treatment plant from the State Revolving Fund.

Mr. Lawson said he would like to leverage one funding source against the other. There is a possibility that one source could fund the entire project.

As it stands now, the USDA loan offers a 40-year repayment plan with a 4.5 percent interest while the State Revolving Fund offers a 20- year repayment plan with a loan rate of 1.625%, a more attractive option for the city, as the loan would be paid off in half the time.

The debt could cost the average homeowner about $15 a month, according to a project plan draft prepared by Wilcox.

"We're hoping for no increase (in sewer rates) at all, but we waiting on the final numbers from the grants," said Mr. Therrian.

Mr. Lawson is hoping the state will pass legislation for a hardship interest rate by next year, which discount rates as much as 60 percent to communities at or below the poverty rate.

He said it is more likely the city would go entirely with the State Revolving Fund, which would include a grant to cover engineering costs.

As it now stands, the city will apply for $2,040,000 from the State Revolving Fund for mechanical treatment, and $2,260,000 from USDA for sewer line replacement.

Mr. Therrian said replacement of the gravity sewer line on Portage Street, between Fourth Street and State Street, will also have to be done, which is estimated to cost $1.2 million.

Including planning and contingency costs, total estimates from the State Revolving Fund would be $2,503,000 and, from the USDA, $2,787,000. Costs include road reconstruction, as well.

The city's plastic (PVC) sewer lines, which have been proven in the last 20 years to be less reliable, will be replaced with the more durable ductile iron lines, said Mr. Therrian. Eighty percent of the city's sewer lines have already been replaced.

City Audit

Nancy Stempky of Rehmann Robson, the city's auditor, told Council that the city's general fund balance in 2006 was $156,000, a $9,000 decrease from the year before.

"You're a little on the short end of the fund balance," she said. "Unfortunately, that's not that unusual for cities and counties in this day and age, but we do still recommend you watch that."

Mrs. Stempky pointed out the city's sanitary sewer disposal debt fund, which is supposed to contain $244,000, equal to the amount of one payment, has no money in it.

City Manager Eric Dodson said the sewer department has been operating at a deficit for the past few years and it has been difficult for the city to build up its reserves, but he said the city has been making plans to replenish it.

Other areas with a cash deficit:

Community Center Special Revenue (includes Recreation Debt Service), $15,000; Building Authority Fund, $10,163; Water Enterprise Fund, $177,000; Sewer Enterprise Fund, $149,000; Marina Enterprise Fund, $56,000; Data P r o c e s s i n g , $4,100; Office E q u i p m e n t , $3,400; Heavy Equipment Fund, $25,600.

Mr. Dodson said the figures reflect a "snapshot in time" of city ledgers on a particular day last year, which, he said, much may have changed since then. He noted that the deficit in the Marina Enterprise Fund would not be as much had the city received the $25,000 promised by the state's Waterways Commission for the construction of the lighthouse, which now stands at the end of Chief Wawatam Park.

On a good note, the city was able to retire debt amounting to $920,000 in 2006, including $754,000 in governmental activity debt and $166,000 from the sewer and water departments.

Also, in November, the city made its final payment of $230,000 on a 1986 bond for the wastewater facility.

Mr. Dodson said the sewer deficit now stands at $195,253, while the water deficit is $91,895.

"We are within one percent of the projections that were made back in January," he said.

He said a sewer line break on Portage Street earlier this spring was unforeseeable, however, he said the city is working to prepare itself better for contingencies that come up.

"These negative numbers are not going to become positive unless we take action," Mr. Dodson said. "That means we have to continue to tighten the belt. We have to be mindful that our cash business is like a local business, and there are lean times and we are in those right now."

Mayor Paul Grondin directed the city's audit committee, which includes Council's Susan Tamlyn- Massaway and Paul Fullerton, and City Treasurer Eugene Elmer, to meet quarterly to review progress of the city's finances.

Governor Freezes Funding for Bus Station

Mr. Dodson announced that some state funding, including Michigan Department of Transportation's (MDOT), has been frozen by Governor Jennifer Granholm owing to the state's strapped budget.

MDOT representatives told Mr. Dodson that they would be surprised if ground breaking for the bus station would happen next year.

The city and MDOT are planning to build a bus station on the corner of US-2 and Church Street, which the costs of construction was to be covered by state and federal funding.

Mr. Dodson said he doesn't know how the state can freeze all the funds, because 80 percent of the money is federal.

"Maybe things will change, but right now there's a stop order," he said.

Water Tower

Welders from Pittsburgh Tank and Tower, a company that installed a 26.6-foot extension to the city's water tower in Evergreen Shores last summer, returned last Wednesday to make repairs to the tower, however, they were turned back because they had no plans for permanent repair, said Mr. Therrian.

The empty tower stem cracked during a blizzard, forcing the evacuation of three nearby residents from their homes.

"We felt they were not prepared enough to do the work we wanted to see done," Mr. Therrian said. "They had the steel here, but no real plans. We just weren't happy with the way things were being put together."

The city has hired Dickson Engineering, the Lansing-based firm that inspected the tower extension, to work with Pittsburgh Tank and Tower in designing plans for permanent repair.

Eastern Upper Peninsula Engineers and Architects was the original project engineer.

The Sault Ste. Marie Tribe of Chippewa Indians, which funded the extension, is also paying for repairs, but is withholding payments to Pittsburgh Tank and Tower until the city is satisfied with the work.

Brian Schlehuber, one of the evacuated residents, is still searching for an official reason why the water tank cracked.

"There's never been a failure analysis completed," he said. "Pittsburgh Tank has been less than transparent in this whole dealing. They have led us down a different road."

Red Hat Society Council approved a request from the St. Ignace Visitors Bureau for a Red Hat Society Celebration June 1 to 3. The event will be held at Little Bear East Community Center and Arena.

The city hired Norris Contracting to pave the parking lot and install curbs and gutters at Chief Wawatam Park for $12,741.90.

Deb Evashevski, the city's Downtown Development Authority (DDA) director, said the DDA received three bids for the parking lot paving project and two bids for the installation of parking lot curbs and gutters. Norris was the lowest bidder for each project.

Work on the two projects should be completed by Memorial Day, said Mrs. Evashevski.