City Council Recap: $9.5 Million Bond Resolutions Pass

With Monday being Labor Day, the first regular meeting of Lowell City Council in September was moved to Tuesday, September 7. All councilmembers were present, with four attending at City Hall and Councilmember Cliff Yankovich joining via Zoom from a Lowell location. The meeting lasted 68 minutes and covered nine pieces of new and old business.

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Citizen Comments: 9/11 Tribute Planned

Before moving onto the main agenda items, the council opened the floor for citizen comments. One person, Jake Davenport, spoke, and he shared that he was organizing a memorial to commemorate the 20th anniversary of the 9/11 terrorist attacks.

From 9am-4pm on Saturday, there will be 2,997 flags placed along the Riverwalk. Each flag represents one victim in the attack. Davenport encouraged people to stop by the memorial while downtown for Market on Main on September 11, 2021.

Next Steps Taken for Major Washington/Monroe Project

Peter Haefner presents the findings of his rate study.

After two years of planning for major water and sewer repairs on Washington and Monroe Streets, City Manager Mike Burns told the council on Tuesday that the time has come to move forward on financing the project. In addition to replacing water and sewer lines, those roads will also be repaved as part of the repair process.

The project is expected to cost close to $9 million, and the city is planning to cover the cost by issuing revenue bonds through a USDA program. The interest rate for financing with the bonds is 1.75%.

Before voting on the bond resolutions, Lowell City Council heard a rate study presentation from Peter Haefner of Vredeveld Haefner LLC, a CPA and consultant firm. The rate study was required as part of the bonding process. It evaluated the ability of the city to pay back the bonds and what rate increases will be needed to do so.

Currently, the city pays approximately $150,000 annually to pay back bonds taken out for other projects. The water and sewer bonds for Washington and Monroe Streets will be issued in 2022 and 2023 and raise the city’s annual bond payments to more than $300,000.

To ensure the city will be able to make the new bond payments, Haefner’s analysis projected the following rate increases.

Projected Water Rate Increases

  • 2022 – 2%
  • 2023 – 1%
  • 2024 – 1%
  • 2025 – 1%
  • 2026 – 3%

Projected Sewer Rate Increases

  • 2022 – 7%
  • 2023 – 7%
  • 2024 – 6%
  • 2025 – 4%
  • 2026 – 3%

Burns said that for an average residential user, the first-year sewer increase would amount to $1.78 in the monthly ready-to-serve charge and 29 cents in the commodity charge, which is the fee based upon the amount of water used.

“It’s an increase, but these lines are 80 years old,” the city manager said. “There’s a mile and a half of lines that have to be replaced, and the roads will be replaced as well.”

Councilmember Jim Salzwedel expressed concern about spending so much money on water and sewer lines on two roads. Burns replied that the rest of the city’s system was in good shape and should only need small sections replaced. He also noted that there is significant infiltration of stormwater into the sewer lines on Monroe Street that will be addressed with this project.

“As far as I’m concerned, this is the best financing a community like ours can get,” Burns said. Haefner seemed to agree, and previously stated in his presentation that the interest rate on the USDA bonds is something “you won’t get…in the open market.”

Lowell City Council then reviewed two resolutions that would allow the city to issue the bonds. While the project is expected to cost less than $9 million, the public notices for the bonds have a “not to exceed” amount totaling $9.5 million. City Attorney Jessica Wood noted that the city wasn’t obligated to issue bonds up to that amount, but building in a buffer is helpful in case any costs are higher than anticipated.

The two resolutions authorizing the bonds were approved unanimously. A public notice will now be published in the local paper. There is a 45-day window in which residents can submit a petition requesting a vote on the matter. The petition must have signatures from 10% of the registered electors within the city limits to trigger a referendum vote. If no petition is received, the city can issue bonds any time after 45 days.

Hillside Court Improvements Discussed

Last month, Lowell City Council heard about concerns from residents on Hillside Court regarding a dirt turnaround that is causing issues with dust. At that time, the adjoining property owner had expressed his wish to plant grass in the area.

Since then, Dan Czarnecki, director of the Department of Public Works, held a meeting for all residents of the road to discuss the matter further. It was agreed that the ideal solution would be for the city to widen the road and add a cul-de-sac to the end, as was originally platted.

However, Hillside Court is not listed on the city’s current 7-year road plan, and residents did not feel as though a special assessment was the appropriate way to pay for road improvements.

Three residents were present for the meeting, and two addressed councilmembers. Both had concerns that delivery trucks and other large vehicles wouldn’t travel down the road if the turnaround was replaced with grass. They also commented about the narrow roadway and the safety of children in the neighborhood. “I would hate for there to be a child hit,” said resident Carrie Hoffman.

“They have a legitimate concern,” Burns said, “but we have limited resources.”

By consensus, Lowell City Council decided to get quotes to pave the turnaround for now and look for a way to put the street on a future road plan for a long-term fix.

Deficiencies Detected in Water System

The Michigan Department of Environment, Great Lakes and Energy (EGLE) sent the city a significant deficiency violation notice last month, and Czarnecki addressed the council on the matter.

The state found three violations during a recent water system sanitary survey. According to Czarnecki, two of the issues were known the city and budgeted for resolution this year while the third was a less significant problem that was discovered during the survey.

Of the three issues, the most serious one is that the state deemed the city to have insufficient water system capacity. The problem relates to the Gee Drive booster pump station which serves Lowell Township. While the pumps can currently meet Lowell Township’s maximum day water use by using all pumps at the station, the state requires the city to be able to meet that demand with one pump being kept as a back-up.

An upgrade to pump capacity was approved as part of the Fiscal Year 2021 budget, and Czarnecki said he expected to bring bids to the council later this month to have the work done.

Less serious deficiencies included an update of the city’s water reliability study and upgraded screening on a water storage tank and overflow pipe. Lowell City Council unanimously approved updating the water reliability study at a cost of $14,950, with the work to be completed by engineering firm Williams&Works. Meanwhile, the screening issue will be resolved by staff this fall.

Other Meeting Items and Action

Other items addressed during Tuesday’s meeting included the following:

  • Donna Jean Ford bequeathed a portion of her estate, totaling approximately $110,000, to be used by the city in conjunction with the Lowell Showboat Garden Club for beautification projects. The majority of the money is held in mutual funds, which the city cannot legally own. Lowell City Council approved a resolution to have the mutual funds liquidated so the assets can be turned over to the city.
  • The Lowell Police Department requested permission to use $7,500 from their salvage fund to switch to the Talon Incident Management System (TIMS). The department currently uses the State Records Management System (SRMS) which lacks some usability features, such as the ability to enter reports from a cruiser rather than having to return to the office to complete paperwork. Lowell City Council unanimously approved the department’s request.
  • Councilmembers unanimously approved a 10-year lease for the Lowell Area Historical Museum to continue to use the Graham Building at the corner of Main and Hudson Streets. A 10-year lease is the maximum allowed by the city charter.
  • Lowell City Council appointed Burns as the employer delegate for the 2021 MERS Annual Meeting and Mayor Mike DeVore as their representative to the MML Annual Meeting.

The meeting was adjourned at 8:08pm, and the next regular meeting of Lowell City Council will take place on Monday, September 20, at 7pm in City Hall.

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