Adopts resolution to secure bonds for plant improvements
By Barb Pert Templeton
A project that calls for significant upgrades to the wastewater treatment plant in Algonac, that services the city plus Clay and Ira townships, has taken another step forward. Members of the Algonac City Council unanimously approved a resolution to seek treatment plant improvement bonds.
The Southwater Municipal Utility Authority (SMUA) has managed the wastewater treatment plant project on behalf of all three municipalities since 2024. An Interlocal Agreement, between Algonac, Clay and Ira. was founded in Oct. 2023 with each community approving a resolution agreeing to participate including pledging their faith and credit to secure the bonds needed to pay for the improvements.
A memo in a city council meeting packet for Feb. 3, said a recent study reflected that the plant, constructed in 1967, needs significant upgrades to keep operating at a cost of around $13 million dollars. It was agreed that the design and construction costs would be covered by each municipality making equal payments totaling their share of the costs, in this case Algonac 30%, Clay Township 35% and Ira Township, 35%.
Updating to the Waste Water Treatment Plant, which dates to 1967, could cost $13 million dollars.
At a Feb. 3 council meeting City Manager Artie Bryson introduced Bill Roche, who is the managing director of Sudsina and Associates, LLC, Registered Municipality Advisors, and part of the bond council.
Roche, stepped to the podium and explained that he’s been working with the municipalities on the financial side of the transactions related to bonds. He said all three municipalities have to publish a notice of intent to issue the bonds for the project
He said right now everything is just preliminary and they had to have a “not to exceed number” on the paperwork so it reads $16 million not the $13 million.
Roche explained that if they utilized the entire $16 million that would amount to about $1.2 million in debt service over 20 years and at 4% interest, the City of Algonac’s share in that would be about $353,000.
“But that’s just spit balling numbers so you have a general idea” Roche said.
Councilman Jake Skarbek said with those current estimates what would the cost be per taxpayers or per household, how much would the taxes go up?
“I haven’t done any down and dirty on the rate side yet,” Roche said.
“Do you have an estimated for what you’re projecting?” Skarbek asked.
“No, I don’t have the information on your rates or charges or the number of participants that are in the system,” Roche said, noting he’d need more data to give an estimate. “We are probably
like nine to 12 months ahead of the process so I did not prepare that but that’s something we’ll give you an idea for as we get better numbers in from the architect and engineers on the cost.”
Bryson got confirmation from Roche that the project is slated for 2027. He then stated that he had preliminary numbers that reflect the increase to taxpayers would likely be about $25 per bill.
Mayor Pro Tem Dawn Davey asked Roche is the fact that the city already has plans on conducting a rate study so will those numbers be figured into the project. Roche replied yes.
“So, this is going to work out good, that we are going to have the rate study along with all of this so we’ll be able to tell people what we’re looking at,” Davey said.
Roache said they won’t be selling bonds until next spring.
The council Adopted Resolution 2026-02 to approve ACT 233 for contract and authorizing notice for Wastewater Treatment Plant improvement bonds.
Money transfer for design fees
The next agenda item was also related to the project. Officials agreed to adopt a resolution to borrow $463,500 from the city’s general fund and transfer it to the sewer fund. The money will be used to pay engineering costs for the SMUA project.
Fishbeck, Architects and Engineers, estimated the project will cost around $13 million and their design costs would be $1,545,000. Those charges to the SMUA, divided up between Clay and Ira townships at 35% each and Algonac at 30%, making the city’s contribution $463,500. A memo in the meeting packet noted that the city must pay that bill no later than June 15, 2026.
The Algonac city administration noted that the most efficient way to make the payment on time was to borrow the funds from the general fund.
Councilwoman Wendy Meldrum asked how the money taken from the general fund will be paid back – the $463,500.
“What is the plan to do that?” she asked.
“It would be repaid by the bond proceeds, so when the bonds are sold it will repay the cash that was advanced to the sewer fund to the general fund,” Bryson explained.
Meldrum said she just wanted clarification of the process, is Bryson saying that moving this money from the general fund will not prompt any expenses to residents? He said know, it won’t cost taxpayers anything.
“Otherwise. our sewer dept would have to pay $38,000 per month and it would put a real hurt on our sewer fund balance,” Bryson said.
“And we have a real healthy fund balance in the general fund,” Mayor Rocky Gillis added.
“It’s healthy and we have to remember we do have a healthy fund balance but what I’m seeing is we’re picking at it, though,” Meldrum said. “That’s a big chunk of change.”
Skarbek said he does like the idea of the city being its own bank.
Roche said they did look at securing a bond and borrowing the funds but the city would have had to pay interest on that money. He guesstimated that would have cost the city about $16,000 a year.
“It’s good to that this board is fiscally responsible enough to keep a cash reserve to be able to loan it to ourselves in times like this, at least we’re not paying the bank,” Gillis said.
Bryson said Ira Township had the money for their share and Clay Township is also going to do a fund transfer to cover their portion.
The council then unanimously approved resolution 2026-03 to move the money for the project.
