City raises sewer rates again

By Bill Brown
Editor

The Allegan City Council bit the bullet Monday. Aug. 4, during a special meeting and unanimously agreed to increase the amount of bond funding they will need to construct improvements to the city’s sanitary sewer system. The original estimate of $7,700,000 to complete the project came in at possibly $1,800,000 over the original bid totals. City engineers are hopeful the actual shortfall will be about $1,500,000.

As a result, it has been necessary to once again increase sewer rates to meet the revenue requirements of the system modifications. The new rates will take effect Sept. 1, this year and be followed with rate increases in Sept. 1, 2009. A third increase in 2010 might be necessary.

City councilman Mike Morton told the council that this project certainly wasn’t new. He said the need to upgrade the sanitary sewer system and increase its capacity has been talked about for a number of years. Councilman Dave Williams asked why it suddenly became so urgent to hold a special meeting on the matter if this project has been on the table for that long?

City Manager Rob Hillard explained that since the City of Allegan is funding the project through the State of Michigan low interest revolving loan fund, there are certain deadlines that must be met and the first such deadline was Wednesday, Aug. 6, when the state must receive a revised loan application.

Hillard also told the council that the city must abide by rigid standards for maintaining the waste water system under rules established by the federal EPA and the State DEQ.

“That certainly means maintaining your wastewater plant in a safe and efficient manner,” he said.

City Bond Counsel Roger Swets, of the firm Clark Hill, Grand Rapids, said that there was a possibility the state might not have funding for the low interest loan in the current cycle and that the city’s application for funding could be delayed until next year. In that case the City of Allegan might have to seek loans from commercial banks and be subject to higher interest rates. He said the total loan for the project could increase by as much as $4 million dollars if the loan does not go through the state of Michigan. Swets didn’t think that was going to happen, but there was that possibility. He said his contacts with the state over this loan had been positive and the State of Michigan appeared anxious to work with Allegan on this project.

The council unanimously awarded a construction contract to Grand River Construction, Hudsonville, for improvements to the Wastewater Treatment Plant in the amount of $7,679,000.

A contract with the engineering firm of Prein & Newhof, Grand Rapids, for engineering services on the project in the amount of $520,000 was approved.