Archived Story

Cass County agrees to sell bonds for a $13.2-million water project

Published 10:39am Friday, March 5, 2010

By JOHN EBY
Dowagiac Daily News

CASSOPOLIS – Cass County commissioners Thursday night approved issuing $13.2 million in bonds to finance a water system which since January has grown from serving Maple Grove trailer park in Penn Township to encompass Jefferson, LaGrange and Calvin townships.

Penn Township contacted U.S. Department of Agriculture and Wightman and Associates in Benton Harbor, represented by Tom Deneau, and learned that there were extremely favorable rates available for water projects.

Vandalia already has a water system in place with towers and wells which could be extended.

It was decided that mandatory hookups, which USDA typically requires, would be unacceptable.

To satisfy the government, it could be accomplished as a fire protection district.

Every homeowner within the district will be assessed whether they hook up to the system or not, but the tradeoff is installation of that system at minimal cost of $250 per year while seeing a 10- to 30-percent savings in fire insurance, which can be as much as $300.

Contrary to contentious sewer project meetings swirling with negative feedback, water meetings were comparably harmonious.

There exists a 40-year contract with the Village of Cassopolis to manage the system, which has been done the past seven years with nothing more than minor rate issues to resolve.

Because it involves four townships, officials are probably looking at also involving the CAUA, or Cassopolis Area Utility Authority.

Commissioners heard that areas of Diamond and Donnell lakes need some kind of attention besides digging deeper wells because of high nitrate levels and the presence of arsenic in the water supply.

There has always been a problem with how to provide fire protection to Diamond Island. With this system, there will be hydrants.

“The service area over the next 20 years includes all of Diamond, Donnell and Paradise lakes,” Deneau said, referring to the county water and sewer master plan.

“Part of that project was constructed in 2002 when we extended water out to the Village of Vandalia. That was a Penn Township/Cass County project.”

Deneau said that project installed two 750-gallon-a-minute wells on the north side of Diamond Lake more than 300 feet deep in the fourth aquifer “which have a capacity to serve this entire project without any additional construction. It also constructed a water tower within the Village of Vandalia that has the capacity to serve the entire project also.”

All four townships adopted preliminary resolutions supporting the water project.
Those actions were taken before the county Board of Public Works (BPW), which adopted a resolution recommending the county commission accept the $12,930,000 project to move it forward.

Assessments are estimated to cost $6,770 per tax identification, which comes out to $250 a year on a 40-year loan.

“We met with Rural Development,” Deneau said. “Rural Development (of USDA) has agreed it has the money to finance this if we submit an application. It is currently offering an interest rate of 3 1/4 percent. The stimulus package adopted over a year ago included a Build America bond provision which allows for the payment of 35 percent of the interest by the federal government. Rural Development allows Build America bonds to be sold under its program, so if we can put this project together and close the bond issue before Dec. 31, we can take advantage of the Build America bond program, which reduces the federally-subsidized loan interest rate from 3 1/4 to just a little over 2 percent. That’s quite a good interest rate for a project of this scope.”

Deneau told Commissioner Debbie Johnson, D-Howard Township, “Since we’re going to assess the entire capital cost as a fire protection district, there will be no connection cost. There will be a meter rental cost. We’re looking at probably somewhere between a one-time $150 and $250, depending on the type of meter that’s finally selected. The property owner will hire their own contractor to connect. The current monthly bill, based on 6,000 gallons a month, which is about average for a person in Cassopolis, will be around $31 a month. That’s one of the items we want to negotiate with the Village of Cassopolis. This is a stand-alone system now. We have our own wells and power and an operating agreement with Cassopolis. This system will be large enough that if the village cannot reach an equitable arrangement, which I think it can, it can operate by itself.”

Normally, without mandatory connections, Deneau said, 25 percent to 50 percent of residents can be expected to hook up.

There are 1,521 potential customers. The existing system has 168 customers.

“If nobody connects, we’ll still be able to cover the operating cost,” Deneau said, “so any new connections will only help.”

Deneau said of the arsenic/nitrate problems on Diamond Lake, “Colony Bay condominiums had a problem with arsenic in their well. The arsenic limit is 10 parts per billion, which they exceed. They installed a new well and found arsenic-free water, but it exceeds 10 parts per million of nitrates. They currently operate two wells and blend the water. They’re within the limits when they blend it, but if one well went down they cannot operate because they can’t operate on either well alone.”

Penn Township supplied the village system for a month last summer when it went down.
“The Village of Cass, if you remember, back in 2000 installed the wellfield at the Medical Care Facility,” Deneau said, “because their wellfield was contaminated with nitrates.”

Commissioner Robert Wagel, R-Wayne Township, BPW chairman, said, “Southwest Michigan has one of the highest concentrations of arsenic in Michigan. If you’re getting your water from a private well, you should have your hair clipped and tested to see how much arsenic you have in your body.”

“Most of the people able to hook up are constituents of mine, so I’ve had an opportunity to go to the township meetings as they’ve presented this,” Vice Chairman Ron Francis, R-Cassopolis, commented. “I think you’re going to get a relatively high level of hookups, unlike the contentious sewer meetings. There’s a general level of acceptance and, in many cases, a desire to have public water.”

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