By Travis Smola
Schoolcraft village residents got some of the first details of the long-discussed sanitary sewer project at a special meeting of the Village Council in June.
On hand were members of the Planning Commission, Kalamazoo County Health Department and a representative of the consulting firm Wightman & Associates to give information to a crowd of roughly 100 at the high school performing arts center.
Alan Smaka of Wightman was the main speaker of the night and was finally able to shed some light on the size, scope and potential costs of the project for residents. Under the proposal Smaka presented, construction would not begin until 2022 at the earliest on a $15-40 million project that would bring sewer service to residents within the village as well as residents of Barton Lake and Sugar Loaf Lake.
The proposal suggests a possible lagoon or treatment plant somewhere south of the village along the US-131 corridor. Operating a treatment facility independently would allow the village to control system legacy costs.
A key part of the service area would be the US-131 corridor. The proposal includes areas north and south of the village where businesses are present. “One thing I want to point out here is this is the biggest project scope that we anticipate,” Smaka said. He said the project size could shrink depending on input from the community. But he noted the village needs to ask for the largest possible project when approaching funding agencies about possible grants.
“You don’t ask for a small project and then ask for more money,” Smaka said. “You go with the largest project scope and if you need to, you can always pare it back.”
The plan for funding is much the same as it was in 2015. Smaka said the plan is to pursue USDA funding for the project. It is the lowest interest rate they could find at 3.375% for a bond term of 40 years. Smaka said this program was a perfect fit for Schoolcraft.
“It was set up to provide water and wastewater funding assistance for rural communities with populations under 10,000,” Smaka said. “The federal government understood that a lot of communities couldn’t, under their own terms, fund these projects at an affordable market rate. If you go to market on a project like this, you’re going to be at five percent in 20 years. What that does is drive the cost of the project up significantly.”
In estimating the costs to village residents, Smaka said they took a conservative approach that estimates no federal grant funding. Once the sewer is in place, the cost to residents for use would be approximately $50 a month for a single-family home or about $600 a year. The costs for businesses would be different and would be assessed by what they call residential equivalent units or REUs. A home is one REU. Businesses that use a lot of water would be charged multiple REUs and thus would have larger sewer bills. This monthly bill would help cover funding, operation, maintenance and replacement costs.
But there are also two one-time assessment costs to help cover the capital costs of the project and they would be significantly more for landowners in the community. A front footage assessment is for vacant and improved properties with homes that would connect to the system right away. This assessment would charge approximately $5 per front footage, meaning a property with 200 feet of front footage would have to pay approximately $1,000.
The larger of the two fees would be the benefit fee assessment which is assessed to everyone who is benefiting from the sewer line. The cost for this would be approximately $10,000 per REU. There would also be a $2,000 charge for connecting to the system. In all, the cost would be approximately $13,000 if paid entirely up front.
“When you do a bonded project like this the homeowner has options. The property owner has options,” Smaka said. “You can pay for that assessment all up front, or you can pay for it over the life of the bond.”
Paying for the assessment over an extended period would mean a lower upfront cost of $2,000 for the homeowner. But it will also cost more in the long run, approximately $250 in principal interest a year on the unpaid balance over 40 years. Smaka said residents can pay for the assessment costs monthly or in full at any time over the course of the bond. “That’s a personal decision that people can make based on their situation,” Smaka said.
Homeowners also could save some money upfront by delaying the actual connection to the system for up to five years until 2028. Smaka said this was also done so homeowners could retain value in their septic systems longer. But he also noted many septic systems in the village are approaching 40 years old and will need to be dealt with soon anyway. He estimated homeowners will also have to pay costs of $2-5,000 for filling in and abandoning their old septic tanks.
Those who build a home on a vacant property long after the sewer has been completed would be subject to a fee of $8,500 or more plus connection costs.
All these costs are under the assumption of no USDA grant money. If the village got a full 45 percent grant, these costs to the homeowner would go down 45 percent. Smaka said financial assistance will likely be available through the state or USDA’s loan and grant programs for disabled people or low-income families.
Smaka also clarified a burning question in the village on roadways. He said the sewer would likely cross roadways which would be repaved, but not all roads in the village will be repaved under the project. He also said construction work would try to avoid the roads wherever possible.
As for a further timeline of events, they announced there will be more public engagement meetings, including a question and answer meeting.
An adoption for a resolution on the project would likely happen in the third quarter of 2019 with USDA funding applications happening another 60-90 days after that. Design and permitting would happen 18-24 months later with construction starting in 2022 at the earliest, with two years of construction estimated for the project.
Village council members did not allow any questions at the meeting and instead directed members of the community to put their questions on note cards to be answered at a later meeting.