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September 19, 2018 9:40 pm

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How To Pay For City Water System Improvements A Conundrum For Douglas Officials


In the ongoing conundrum of trying to find when and how to pay for the necessary public water system improvements being proposed in three specific districts within the City of Douglas (engineers and city officials say current water service is substandard and illegal, connections are crossing non-owned property), officials Monday continued to mull over options in an attempt ease the financial burden on property owners.

One option is to provide a “system subsidy” that would reduce the cost to property owners.

Another option would defer property owners’ cost until they sell their property or connect to the system (i.e, when a new home is built or when their connection fails and there is a need to connect to the water main).

“What is a subsidy? How do we get to what is a reasonable subsidy amount? It is arbitrary,” said Douglas City Council Member Aaron Miller.

“The subsidy would be your decision,” responded Douglas City Manager Bill LeFevere.

Other council members shared Miller’s sentiment.

The water main special assessment districts are identified as Freemont-Ellis, Whittier-First, and McVea, with beneficiaries previously proposed to pay over half of the estimated $545,000 price tag.

City officials warn that there are other areas in the city that have “spaghetti lines” and/or need to have access to a water main that will also eventually need to be fixed.

They marked a distinction between private roads and public roads, contending that water improvements on the former would all be fall under the financial responsibility of respective developers.

While there are property owners within the proposed water main districts that want to pay for the water system’s improvements, the city has to contend with other property owners that do not because they haven’t experienced any problem with their current service.

Still, Douglas city officials expressed certainty about the proposed project’s value, both to improve the system and bring it up to state and local standards as well as an overall economic value.

“There is a benefit to the city to get the system in the ground; it is tax revenue,” said Douglas City Council Member Greg Harvath, referring to new developments that will have access to the water main extensions and improvements.

To move ahead with the districts as they were previously being proposed was not an option nor is it an option to have the city pay the entire cost of the project and have property owners pay nothing, Douglas officials have determined.

The council members said they will continue to study funding mechanism options as well as invite public input during future discussion and resolutions about the issue.
However, Douglas officials are determined to follow the strategy of allocating costs to those who will benefit from the improvements based on a front-foot basis: the length of water main that will run in front of each property.

Beneficiaries are also expected to pay the cost to connect from the water main into their house, the service line.

Also not different from pasts discussions, Douglas officials want the residents impacted by the system to pay for the footage that runs through intersections or runs past properties being deferred.

The system entails all Douglas public water service customers of the Kalamazoo Lake Sewer and Water Authority (KLSWA), the public utility servicing the cities of Saugatuck and Douglas and Saugatuck Township.

KLSWA is governed by a board of commissioners which includes representatives from each constituent municipal member, and each member is responsible for the administration and funding of the system portion within their jurisdiction.

The three districts have different scenarios with different associated costs.

Residents in the Freemont-Ellis Water Main (Fremont Street starting at its intersection with South Union Street going west on Fremont Street to its intersection with Ellis Street and then north on Ellis Street to its intersection with Center Street) were expected to contribute a little over half the estimated total project cost: $80,477 of the $159,000 total needed to complete it.

Property owners at the Whittier-First District (Whittier Street starting at its intersection with Center Street going south to First Street and proceeding west on First Street to its intersection with May Avenue) were expected to pay $74,318 of the total project cost of $120,000.

The McVea District (McVea Drive starting at its intersection with Campbell Road going south on McVea Drive to its southern intersection with Westshore Golf Course Redevelopment)—was expected to pay more: $122,231 of the $266,000 total.

How To Pay For City Water System Improvements A Conundrum For Douglas Officials

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