MARQUETTE — The Marquette City Commission unanimously approved entering into a professional services agreement for a cost not to exceed $26,780 with Donohue & Associates Inc. to prepare a State Revolving Fund and Drinking Water Revolving Fund project plan in hopes of securing possible financing for future infrastructure improvements.

Funding for the SRF and DWRF project plan will be split between the city’s water, sewer and wastewater funds on a percentage basis, city notes state.

The Michigan Department of Environmental Quality reports that the DWRF program is designed to assist water suppliers in fulfilling the requirements of the Safe Drinking Water Act by offering low-interest loans of 2 percent for 20 and 30 years. As of October 2017, the DWRF program has provided low-interest loans for 288 projects in the state, totaling over $900 million.

The scope of the SRF and DWRF project plan will be based on the city’s six-year Capital Improvement Plan for infrastructure projects and its five-year Utility Financial Plan, which focuses on maintaining the city’s water and sewer systems.

City residents noted an increase of $16.78 on their monthly water, sewer and wastewater bills in December. The increase was set in order to achieve financial stability and help fund operating expenses and replacements to critical infrastructure, city staff previously said.

According to Donohue & Associates’ proposal, the firm plans to review pertinent background information, including plant operational data, plans and specifications of existing facilities; water and sewer utility budget information; operating and maintenance manuals; past engineering reports; sewer service area plans; population projections; and more.

Any proposed projects will be approved by the city commission through the annual budget process, city documents state.

Commissioner Dave Campana asked why the loan would have to be 20 years instead of 10.

“I also thought if you pay it off sooner, you save money. There must be a reason you’re doing it the long way?” he asked.

Gary Simpson, the city’s chief financial officer, said the state requires it be a 20-year process.

“If it were up to me, we’d do it over 10 years, but this is a state program that requires 20 years,” he said. “The upside to this is the interest rate is 2 percent … If we were going to do it on our own, it’d probably be closer to 4 percent.”

A draft of the plan is anticipated to be completed by March, with the final version in May. Plans will be submitted to the DEQ.

The commission also adopted an ordinance regarding Whetstone Village Apartments after a public hearing was held.

In April 1976, an ordinance was adopted for the establishment of a payment in lieu of taxes, or PILT, on the property development.

The owners of the development are seeking financing with Michigan State Housing Development Authority for upcoming renovations to the property. As part of that financing, a new ordinance will need to be adopted that will coincide with the terms of the new financing.

“The Whetstone Village is partially in the city of Marquette and partially in the (Marquette) Township, so this is just for the parts in the city and this is so the apartments qualify for state funding,” said Commissioner Jenn Hill.

The currently enforceable ordinance, as well as the subsequently proposed ordinance, is in compliance with state statute on taxing exemptions for housing development authorities. The city will continue to receive 4 percent of current rents that are received by the development over the duration of the ordinance, city documents state.

Jaymie Depew can be reached at 906-228-2500, ext. 206. Her email address is jdepew@miningjournal.net.