By Joseph Goral
Staff Writer
jgoral@mihomepaper.com
 LAKE ORION — The Lake Orion Village Council voted 5-2 during its meeting on Monday to approve an ordinance that authorizes issuing up to $4.025 million in revenue bonds for the village’s sanitary sewer pump stations improvement project.
Councilmembers Nancy Moshier and Michael Lamb voted against the motion.
The total construction cost for all three phases of the sewer pump project is listed as $10,938,260 in village documents. The village plans to repay the bonds through water and sewer user fees from residents.
The village was approved for $1.75 million in grant funding, but needs to go through an application process to secure the funds, said Village Manager Darwin McClary.
The first bond will provide funds needed to complete the project’s first phase of three phases “pending the receipt of the $1.75 million in grant funding through the 2024 Congressional Community Projects Grant Program,” according to village documents.
Jeff Aronoff, of Miller Canfield, the bond company representing the village, said the rates and charges for the water and sewer system secure the bonds. The bonds will be offered on the capital markets through a competitive sale, he said.
“Under state law you are required to … accept the bid that produces the lowest true interest cost to the village,” Aronoff told village council. “That will all be done at the staff level, so the last action taken by the council here in connection with these bonds would be the adoption of this ordinance.”
Village Council President Jerry Narsh said the move does not impact the village’s general obligation debt. Instead, he said it is specific to the water and sewer revenue fund.
“This is something we have to do to protect our waterways and improve our sewer system,” Narsh said.
Although village documents show bond proceeds not used for the project’s first phase will be used during its following phases, McClary said the village anticipates issuing additional bonds will be necessary. The phase one project costs “just under” $3.5 million,” according to McClary.
“But at this point we don’t know how much until we work our way through the phases two and three of this project,” McClary said.
McClary also said water and sewer adjustments were made over the summer anticipating a $1.5 million bond issue.
“We did not want to increase rates too much until we had a better idea as to how much debt we were going to be incurring,” McClary said. “So we will to have continue to adjust rates to accommodate the full debt issue.”
Lamb said the current water and sewer rates would cover $1.5 million of the new bonds, and that this issue will be $2.5 million in bonds. He estimates the average cost to repay the bonds will be between $229,000 and $280,000 per year.
For this reason, Lamb believes homeowners will “get hit” with a $150 per year increase in their water bills.
McClary also said if the village authorized bond sales of $8 million and chose not to sell the bonds, the village could still apply for grant funding.
Narsh said council discussed each of these options when they chose to complete the projects in phases.
“We all flush, we all drink,” Narsh said.
The council previously authorized publishing a notice of intent to issue the bonds and to reimburse the village for the proceeds of the bonds not to exceed $9 million during its meeting on April 22.