City OK $9.5 million program to proceed with plant project
Tom Colis, managing director at the law firm of Miller Canfield and the city’s bond consultant, reviewed the details about the financing structure for the city's Wastewater Treatment Plant project at a cost not to exceed $9.5 million. (Photo by Rebecca Pierce)
Bond ordinances and construction contracts, approved Monday by the Hastings City Council, lay the financial foundation for long-awaited infrastructure improvements.
Primary among these was the financing structure for Hastings’ $9.5 million Wastewater Treatment Plant project, unanimously approved by the City Council.
After moving forward with a construction bid at its last meeting, the council reviewed the bond ordinance necessary to finance the project.
Tom Colis, managing director at the law firm of Miller Canfield and the city’s bond consultant, reviewed the details and answered questions at Monday night’s meeting.
“This is a series ordinance, so this actually layers on top of the existing bond ordinance that the city has in place with respect to its outstanding revenue bonds,” Colis explained.
The city’s wastewater system revenue bond ordinance establishes a financial framework for the project, determining flow of funds, accounts and how additional bonds can be issued, while the series ordinance is applied over that to provide another series of bonds to finance plant improvements.
“The ordinance authorizes not to exceed $9.5 million of bonds for the project. That is still a not- to-exceed number. That number will be finalized and determined by EGLE (Michigan Department of Environment, Great Lakes and Energy),” Colis said.
The bonds will be issued as “junior lien,” he said, which eliminates the need for a debt service reserve fund. A debt service reserve fund acts to “set aside principal and interest payments to hold in reserve, so that if you don’t have sufficient revenues to pay the service, you would draw on the reserve fund.”
However, since the state is buying the bonds, they can be issued as junior lien, taking away the requirement of a debt service reserve fund, he said.
Since this is considered a state program, it will involve drawdown financing, Colis said. The process includes submitting invoices to be repaid, and only paying interest on the money that is drawn. As the contracts are approved, there will be a 6-percent contingency built into the contracts. If all the contingency isn’t utilized, payments will only be made on the amount drawn.
Colis stated that the goal is to close the bond issue on March 27 and start drawing the funds from the state then.
Another infrastructure improvement endorsed by the council Monday is a construction contract for the milling and re-paving of East Woodlawn Avenue, from Michigan Avenue to the city limit.
Matt Gergen, director of public services, updated the council on this second phase, or “the next trunk in that section of this long-term plan,” he said. Mill Street up to North Michigan Avenue has already been completed as part of the long-term plan.
City Manager Jerry Czarnecki added, “You have to plan these projects out years in advance, so this is one that, when you get to the end of the Small Urban (Grant Program), and they realize that there’s some money left over, they give communities an opportunity to go out and pitch some projects they want to do. That’s why this project’s a little bit out of order. It’s filling in an intermediate step.”
The Small Urban Grant Program is a grant program that requires the state to match 20 percent of the total cost. With this grant, and the project’s total cost at about $400,000, the state will provide around $320,000 of the funds for the work, with the city kicking in the remaining $80,000.
To secure possible funding through this program, the council was required to approve a $15,125 proposal from Prein & Newhof, the Grand Rapids engineering firm that will provide the services. This amount is separate from the $80,000 required from the city.
City councilmen Bill Redman and Jim Carey questioned how the milling process would work.
“They mill down about an inch and a half to two inches, which will depend on the specific condition of the road.” Gergen explained. “and then the depth milled off will be put back in.” He added.
“You’re going to make a lot of people on that side of town happy if you get that done this year.” city councilman John Resseguie said. “And I’m going to hear a lot less complaints.”
In his monthly public service report, Gergen brought more news of improvements. With the winter storms, snowplowing, salting, and active tree removal citywide, the Department of Public Services garage has been busy, he said.
“We seem to have a lot of very happy citizens with the removal of dead, diseased, dying and dangerous trees,” Gergen noted. “They report these trees throughout the entire year and then this is the time of year that we go and actively do them all.”
Councilman Don Bowers asked what is done with the removed trees.
“Branches go in the woodchipper,” Gergen replied. “The other ones are dragged out to the dump and we have a compost area out there.”
“Homeowners are offered the wood if they want it,” Czarnecki added.
The city's Department of Public Services is currently out to bid for the mill and overlay of a two-block section of West State Street from Broadway to Jefferson. “It’s in pretty rough shape, so it will be a nice thing to get done in our downtown.” Gergen said.
The city has saved $7,000 in contractor costs through the use of an asphalt hot patch trailer.
“The finished product is a lot better from what we have done in the past.” Gergen said. “Cold patch tends to pop out of the hole, but, because we have the hot patch trailer, it’s not just savings, it’s also a higher quality product when we are finished.”
In other business, Dan Remenap, new superintendent of Hastings Area School System, attended the meeting to introduce himself.
“I want to thank you for a great community,” Remenap said. “A great community, like great schools, are never an accident. It’s usually a collaboration between many kind-hearted, good-willed people and that’s certainly the case here at Hastings.”
“I’m here to offer partnership and anything we can do to help one another,” he said.
In response, city councilman Al Jarvis complimented Remenap’s cell phone ban during the school day at the high school. He also praised the district's recent increase in recess time for the elementary kids.
“I think it was a good move,” Jarvis said. “Some people might think it’s small, but I think it’s a big thing.”
In other matters:
• Councilman Don Smith noted, during council comment, that he is “looking forward to having another discussion on the IT (Information Technology), I think that’s something we need to talk about with haste.”
• A workshop provided information on a Distributed Antenna System and Small Cell systems.
• At a noon training program Monday, council members heard a presentation on the Michigan State Police Southwest Michigan Enforcement Team (SWET).
• Fire Chief Roger Caris offered his monthly report, which included a total of 47 runs in January.
• The council passed a resolution to approve the American Cancer Society’s request to hold the Relay for Life in Tyden Park on Friday, July 31 through Saturday, Aug. 1.
• The council approved a request from Hastings Hard and Softball club (formerly SCMYB) to use the city fields.
• The council completed a first reading of an ordinance regarding a zoning change for Indian Hills Drive and Jacobs Circle.
• During the comment period at the end of the meeting, two councilmen announced their re-election plans: Bill Redman, running for 4th Ward; and Don Bowers, running for 3rd Ward.
The next city council meeting will be at 7 p.m. Monday, Feb. 24, in the City Hall council chambers.