Lake Orion sanitary sewer replacement project expected to cost $9.1 million

Project to be completed over three phases

By Megan Kelley
Staff Writer
LAKE ORION — The Lake Orion Village Council received a presentation regarding the village’s ongoing preparations for the large-scale sanitary sewer pump station improvement project, which is now expected to cost more than $9 million.
The council was joined by Wendy Spence, senior project manager for the village’s engineering consultant firm Nowak and Fraus, to give project updates.
The council also voted 4-2 in favor of completing the project in three phases, with council members Michael Lamb and Nancy Moshier casting the nay votes.
Spence last spoke with the council in April to provide a project plan and update on the village’s Clean Water State Revolving Fund (CWSRF) Loan.
“Your existing sanitary sewer system exists of gravity sewers, generally, on the east side of the village. The west and south are served by a combination of gravity and pump stations. There are 16 pump stations in question,” Spence said. “Quick history, how did we get here: your sanitary system was constructed in the early 1970’s. At the time there were widespread failures in the septic systems. The county maintains that system, the village owns it. Moving forward in 2015, the village received a SAW (Stormwater, Asset Management, and Wastewater) grant to perform an in depth analysis of your system which resulted in an asset management plan and a capital improvement plan was finalized and presented to you in 2018. The findings of those studies were that all 16 pump stations have exceeded their design life and they require complete rehabilitation.”
Spence laid out specifics for what exactly is wrong with the pump stations, noting that because they are more than 50 years old the equipment is obsolete and parts are unavailable; the electrical system is no longer code compliant; there is corrosion and the risk of failure and potential contamination of the lake is high.
In 2022, the village contracted with Hubbell, Roth & Clark, Inc. (HRC) to complete the design engineering for the project. At that time, HRC presented a cost estimate to the village of roughly $6.4 million.
Last year, when discussing the CWSRF loan, the cost estimate had increased to roughly $7.3 million. In October of 2023, the village was informed that they were not funded under the CWSRF.
“There were 150 project plans, 52 received funding. Of the 52, 47 were to communities with overburdened or significantly overburdened status financially,” Spence said. “The village does not fit that category.”
In December, the village received the finalized design plans and specifications which showed a project total had again increased, this time to $9.1 million.
While the village does not have the money to complete the project in one phase, Spence recognized that the village has been informed that it will receive a 2024 congressional Community Projects Funding (CPF) grant in the amount of $1.75 million.
Because the village does not have the funding capability for the project, Spence also pointed out that rate increases are necessary for completing the project.
Spence also said that while the village could hold out for potential CWSRF funding in the future, its priority rating is unlikely to increase unless the village experiences some type of system failure.
Additionally, should the village decide to break the project up into phases, it would be able to apply for CPF funding again next year in 2025 and again in 2026.
While this is not guaranteed funding, council President Jerry Narsh indicated that he had spoken with Congresswoman Lisa McClain, who represents the Orion area, and she had given strong indication that she would continue to advocate for the village receiving some of those funds.
“I spoke directly to Congresswoman McClain about funding. Why we didn’t get the full funding — a lot of communities didn’t get their funding so I understood their reasoning. But at the same time the congresswoman said that she does not take lightly the fact that she extended that and this project, knowing its going to be a three or more year project, that we are to submit next year for the same congressional funding and she has promised full scrutiny from her office for additional funding for this exact project. So, if it is over a three year project, we’re also looking at additional congressional funding coming each year potentially,” Narsh said.
Lamb and Moshier were both concerned about the likely increase in project cost the longer they wait to do the project, something Spence confirmed.
“Delay and splitting of a project into parts is inevitably going to increase the cost overall. There is going to be inflation for labor and materials, additional bonding, contracting and administrative costs for splitting it into three projects from one,” Spence said.
According to Spence, CPF grants can be used for up to 80% of total project costs. In splitting the project into three phases, if the village were not to receive any more additional funding, which would be the worst case scenario, the project total could be $8.4 million — over $1 million more than if the project was completed in one phase.
In the best case scenario where the CPF grants are received and make up 80% of the project cost, the village would pay just over $3 million over three years for the project.
Councilmember Ken Van Portfliet said he didn’t see evidence that showed doing the project in one phase wouldn’t also see a cost increase.
“People will submit bulletins, addendums and those things offset. Contractors are not going to hold their pricing consistent throughout this project. So, I don’t see that as a real strong possibility. I’ve seen it too often in many construction projects,” Van Portfliet said.
Spence responded saying that while that was true, the cost estimate included two contingencies for things such as those.
Councilmember Teresa Rutt was vocal about wanting to try and do the project in two phases rather than three in order to keep the timeline of rate increases to a minimum.
Lamb and Moshier both expressed that they would like for the project to be completed in one phase to be done quickly for the least amount of tax burden on residents.
Narsh moved to direct administration to complete the project in three phases and to seek federal funding for phases two and three.
The motion was supported by Van Portfliet. Ultimately, Rutt joined Narsh and Van Portfliet along with councilmember Stan Ford in voting yes on the motion. Councilmembers Moshier and Lamb both voted no.
Councilmember Carl Cyrowski was absent from the meeting.

One response to “Lake Orion sanitary sewer replacement project expected to cost $9.1 million”

  1. While this implies that this will be paid for with higher rates, I see nothing in the council’s decision specifically saying that, what the rate increase might be, or how long it will have to be in place. The other option could be special assessments, or although unlikely, paid out of existing funds and revenue. I find it very odd and disturbing that they can approve an expense of this magnitude without defining how they are going to pay for, and apparently continuing to ignore all the other upcoming unfunded expenses that were raised during this year’s budget approval.

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