Upgrade Plant in 5 Years, Island BPW Recommends
By Karen Gould

At a cost of $9.8 million, the Mackinac Island Board of Public Works (BPW) is recommending renovation and upgrades to begin in three years at the wastewater treatment facility. The plan includes increasing the plant's operating capacity and making the 30-year-old facility mechanically reliable. The board plans to pay for the project from savings, bonds, and a rate increase estimated to take place in five years.

Meeting Friday, December 14, the BPW based its decision on a 33-page report received from the engineering firm Fishbeck, Thompson, Carr and Huber of Grand Rapids, which was hired in August for $35,435 to develop a master plan for the plant.

The board is seeking the threeyear construction delay to allow time to build up its cash and is awaiting a report, now due in January, from engineers and city auditor Michael Konicki to see if the plan is possible. At that time, the board also may consider scaling back its annual 15 Residential Equivalent Units (REUs) allocation until the additional capacity is available. The plant is nearing capacity, with 70.9 REUs remaining.

Capacity of the sewer plant is measured in REUs, with each unit equal to the water use of a family of four. An REU also is equal to 2.8 hotel rooms or 250 square feet of restaurant space. Three REUs are reserved annually for newly constructed or renovated residences.

The planned construction includes a capacity increase, said Bruce Zimmerman, Department of Public Works (DPW) director, that would add approximately 350 REUs to the system. Operating under the city's moratorium that allocates only 15 REUs annually, the increase would add 23 years to the system before it reaches capacity.

Three upgrade options were detailed in the plan, including a basic maintenance plan to make the plant reliable and a major expansion plan. Cost of the projects ranged from $9.4 million to $18.4 million.

The mid-range plan which the board is recommending includes upgrades to make the plant mechanically reliable and a small increase capacity that would boost the plant's maximum output to 990,000 gallons a day. The plant now can operate at 920,000 gallons a day.

The estimated construction cost of this plan would be about $7 million, with the complete project cost set at approximately $9.8 million.

Board member Ron Dufina, who sought board action on the latest sewer moratorium imposed on Island residents, opposed the recommendation. The Island is under two sewer moratoriums, and Mr. Dufina wanted a decision made on the 180-day moratorium that was imposed in August and is scheduled to expire at the end of January before other decisions were made at the meeting.

"I'm against moving forward," he said, "because we didn't have a plan to lift the moratorium."

Also attending the meeting were board members Jim Pettit and Andrew Doud, Mr. Zimmerman, DPW Clerk Ellen Putnam, Mayor Margaret Doud, and Alderman Smi Horn. Attending the meeting via conference call were BPW Chair Tom Lewand, Victor Callewaert, city attorney Tom Evashevski, and Mr. Konicki.

If all buildings in Harrisonville and Stonecliffe were required to hook up to the sewer system, 125 REUs would be needed, said Mr. Zimmerman.

Most homes in Harrisonville are not connected to the city's sewer system, although Grand Hotel installed a main there to service its Woodville employee housing complex. The city has been concerned that eventually the state will require the area to hook up to the city's plant, and the needed capacity to handle the area would not be available. Now, the board is considering putting aside the needed REUs for Harrisonville once the capacity increase is available in five years.

By March 31, the DPW will have about $713,000 in cash, said Mr. Konicki. About $532,000 of that would be required for the reserve requirements for the new bond issue, leaving approximately $181,000 of unreserved money. This money will be put in two unfunded depreciation accounts.

"If things aren't going to change and expenses aren't going to increase," Mr. Konicki said, "there would be an additional $300,000 a year that the DPW would have to be able to put toward the cost of some kind of debt retirement payment."

Delaying construction would allow the board to have about $700,000 saved in two years, said Mr. Lewand.

"Well, that's pretty significant," he noted, "to start spending our savings as opposed to borrowing it, because it's a lot cheaper that way."

He estimated interest and principal payments on $9 million in bonds would be about $600,000 to $700,000 a year.

"Right now we have about $250,000 in excess revenues," he said, "so we'll have to raise rates in order to pay for those bonds."

Two other plans offered by engineers were considered and rejected by the board. One, which was rejected because of high relative cost, called for upgrades to the existing plant to improve reliability. Construction costs were estimated at $6.7 million and the complete project, including administration, design, and funding, totaled $9.4 million. The board agreed that for an added cost of $400,000, the additional capacity offered in the middle plan was the better choice.

A major plant upgrade was detailed in the third alternative, which would require a new site, dirt, and concrete. The board agreed the plan was cost prohibitive, with prices ranging from $14 million to $18.4 million, depending on the technology chosen.

A feasibility report from Mr. Konicki and the engineers is expected by January 10. Depending on the information provided by the engineers, Mr. Lewand, said, the number of REUs allocated annually may have to be reduced until the new plant capacity is completed in 2013.

The board will meet January 14 at 1 p.m. in Community Hall to discuss the report and vote on a proposal. The board also will address the 180-day sewer moratorium and determine whether it should be extended or lifted, and send a recommendation of its selected plan to City Council to consider at its January 16 meeting at 5 p.m. at Community Hall.