Marquette weighing options to finance water reservoir project

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By Audrey Posten

 

The city of Marquette continues to investigate options to finance replacement of a water reservoir.

 

Public works director Jason Sullivan informed the council in April that, while still safe, the reservoir is nearing the end of its 40-year life expectancy. At the time, he put the project at an estimated $250,000, and hoped using money set aside for replacement in recent years would make for a quick turnaround.

 

However, city manager Mildred Stewart said funds haven’t been banked. At the Aug. 13 council meeting, she again reminded the council that water funds won’t be sufficient to cover it. Instead, she proposed Marquette utilize the State Revolving Loan Fund, a lower cost program available for cities and counties who want to borrow for water and sewer related projects. 

 

An item on the agenda called for approving a financial services agreement for a municipal advisor, who would explain the best options to the city.

 

“Basically, they’re going to educate the city on what the current status of our system revenue and expenses are and what we need to do to bring on the debt and pay that off and get the project completed,” Stewart explained. “This is the first step in the water reservoir project.”

 

Similar to the April meeting, the council wondered if there are other options.

 

“We can’t pay for it with any other money than water money? Our money in the bank, we can’t use it for what we need to use it for?” questioned Tracy Melver.

 

Stewart said general property taxes are not to be used for enterprise funds like water or sewer utilities.

 

“They are supposed to be self supporting. You don’t have to make a profit, but you’re supposed to cover those costs with user fees,” she explained. “You’re not to use property tax to pay for someone’s utility bill. That comes from the state auditor’s office, that comes from state law, the state constitution.”

 

Stewart also cautioned against dipping into city reserves or generated interest, much of which is already allocated toward other uses.

 

“If you look at the treasurer’s report, I know it looks like there’s a lot of money, but when you start deducting all the things we’re committed to or that are restricted, there’s not as much as you think there is...Money is committed to TIF, or it’s restricted for LMI or different capital projects. Those capital projects do not include water or sewer projects...Coupled with what we’re expecting in a reduction in revenues, we really need to keep what revenue reserves we can for that,” she told the council.

 

Additionally, Stewart said, “You want to have some invested funds so you have some interest income that’s unrestricted so you can put it toward things. You spend all that, you lose that revenue stream.”

 

Melver still wasn’t sold. He wondered how the city, around two decades ago, was able to put in a reservoir at the Timber Ridge Subdivision using money from outside the water fund.

 

“What about solar?” Sullivan inquired. “That’s powering the water and sewer.”

 

Without those answers, Melver said he wouldn’t vote in favor of the financial services agreement. No other council members motioned to move forward, tabling the issue for further discussion.

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