Esky water department tackles plant, lines
ESCANABA — As the snow melts, the Escanaba water department is preparing to begin a series of improvement projects to the city’s water plant and to continue with its lead line replacement program.
“I know people are mad at us and upset,” said Escanaba Water and Wastewater Superintendent Jeff Lampi, referencing the public reaction to water rate increases over the past few years. “But I feel that doing this work is very important for the next generation. You know, our water system is what it is, because they built it in the ’30s and ’50s, in the ’70s. They put a lot of money into our system. It’s 2020s and there’s been very little money put in since then, and it’s our time and turn to build a better tomorrow for our children and their children.”
A significant issue for the city is the Michigan Department of Environment, Great Lakes, and Energy mandate that all lead service lines across the state be replaced by Jan. 1, 2041. Under EGLE’s rules, municipalities are responsible for the entirety of the cost for line replacements, replacements must be made from the service to the meter inside each home, and any line downstream of lead — such as a copper pipe connected to a main by a lead gooseneck — is considered contaminated.
While Lampi says he doesn’t think the city should have to replace the lines because the city’s water tests significantly lower for lead than the state maximum — something he credits to the city’s corrosion prevention program — the state disagrees.
“They say any lead is bad lead and it has to be replaced and, unfortunately, it’s the cost to the ratepayers … our customers in the city that have to ante that bill,” he said.
Across the city, there are roughly 5,200 service lines, roughly 4,000 to 4,200 of which are considered lead service lines under EGLE’s rules. Line replacements have already begun in the city, with somewhere between 90 and 100 services replaced in 2021 and additional services were replaced after the rules were rolled out in 2018, but there are still thousands more to be replaced.
The cost for the replacements also has jumped significantly since EGLE’s mandate was first released. Lampi believes the work could cost $10,000 or more per service. In 2018, services could be replaced for between $5,000 and $6,000.
“I would like to say we’re going to get hundreds upon hundreds of service lines (replaced), but we may only get 200 or we may get 600 service lines with the contracted prices, because we don’t know what the bids are coming back at yet,” said Lampi.
The city opened bids for the project on April 5. Lampi had hoped to request council approval to hire a contractor soon after the bid opening, but at the April 7 city council meeting he reported the bids were too high to consider.
Major upgrades are also planned at the city’s water plant. The project, which is estimated at between $5 million and $5.5 million, includes a variety of repairs and upgrades. Many of the individual upgrades are aimed to make the plant more redundant, allowing for repairs to be completed more easily and efficiently, without causing disruptions to service. Roughly 70 percent of the costs associated with the project have been covered by grants or other sources of loan forgiveness.
“We’ve got three or four other grants that we’re chasing and trying to run down. We are trying to do a lot to keep the rates as low as we can,” said Lampi.
On March 17, the city council approved an ordinance issuing $10,650,000 worth of bonds in two series to pay for lead service line replacements and the city’s water treatment plant project. The city has community development block grants, loans from the Michigan Drinking Water State Revolving Fund and other funding sources to pay the bonds. Because of this and the city’s ability to cashflow repayments, the bonds will have no affect on residents’ property taxes or water rates.
“We bonded for $10.5 million and we were not forced by the state to do a rate increase. Again, we’re getting 60-70 percent forgiveness on that money so we’re not going to borrow $10.5 million, we’re going to borrow like $4 million to do almost $11 million worth of work,” said Lampi.
Lampi is also seeking $50 million worth of federal infrastructure funding to support the water system — but that may not be enough.
“We’re still $30 million short of our needs, but if that Biden infrastructure money is there, I’m trying to put the city of Escanaba at the front of the line so we can maximize our grant capabilities,” he said.
Despite all the grant funding, water rates increased roughly 45 percent in 2019, and 20 percent increases were planned for each of the next two fiscal years. According to Lampi, the grants aren’t sufficient by themselves to meet the needs of the city and correct its aging infrastructure.
“Planning for the worst case — meaning we pay for it ourselves — meant that we had to have a rate increase to have a solvent water fund to pay for the projects. However, if we can get any amount of grant money or loan forgiveness we are better off by getting the free money instead of spending our own,” he said.
Lampi also believes it is unlikely a rate reduction would be possible, even if the city were to come into a large amount of funding for the projects, unless major changes were to take place at the state level.
“In order to reduce the rates, which I would love, the state would have to remove mandates that are making us spend money on infrastructure or the state would have to give us gobs of money to do the infrastructure replacements, and then, if we had a long term plan and looked at what our needs were, we could successfully reduce our rates if those needs were diminished.”