Water, Sewer Work Set

March 24, 2008
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GRAND RAPIDS — Sometimes it seems like a job that will never end.

But the city could very well be done with the engineering and construction work on its water-supply infrastructure and sewer system in roughly 10 years.

The work began in the early 1990s when the city replaced the sewer system on the West Side to reduce discharges into the Grand River, an effort that was completed in 1999. Work on the east side of the city started in 2002; a portion of that construction finished four years later.

Deputy City Manager Eric DeLong said the city hopes to wrap up the planned upgrades to both systems by 2019. More work is under way this year. Eight projects will be bid later this year, with three set for early April.

“The work is a continued investment in our physical plant,” said DeLong. “At the end of the program we will have spent $300 million.”

DeLong said about $270 million of that total will have been financed by the city when the final project is completed. To continue that work, the city recently announced that it intends to issue two revenue bonds worth up to $140 million.

One bond can’t exceed $40 million; those funds will go toward making improvements to the water supply. The other can’t exceed $100 million, and revenue will be used to upgrade the sanitary sewer system. Both bonds may be issued in more than a single series.

The sewer bond will pay for construction and relocation of new and replacement trunk and collection sewers; further separation of the sanitary and storm sewers; improvements to lift stations; and upgrades to the wastewater treatment plant and other facilities.

Revenue from the water bond will fund new waterlines and mains, improvements to the Lake Michigan Filtration Plant, construction of a new waterline river crossing in Cascade Township, and the purchase and installation of security upgrades to the water system.

City Water System Manager Joellen Thompson said work on the transmission watermain leading to the Franklin Street facility should be done this year. She also said the city will make some exterior repairs to the Lake Michigan plant this summer and do some filter work there in the winter.

Randy Fisher, environmental services manager, said work at the wastewater treatment plant should be done this year, but some pumping issues and rebuilding of a lift station at the treatment plant will take longer to finish.

“Some will take several years to complete,” he said. “The CSO (sewer overflow) will take about a year and a half.”

Wayne Jernberg, a hydraulic engineer with the city, said a handful of upcoming projects haven’t been bid yet, including work to the infrastructure along Monroe Avenue from Frank to Palmer streets, and on Knapp Street east to the city limits.

DeLong told the Business Journal that some work is being done to assist in economic development projects, while some is mandated by the state Department of Environmental Quality as a permit requirement. He said the state isn’t helping fund the mandated work. But he added that Rep. Vern Ehlers, R-Grand Rapids, and Sen. Debbie Stabenow, D-Mich., helped the city get a $12 million grant it can use for a portion of the work.

Engineering firms Blatech & Veetch and Fishbeck, Thompson, Carr and Huber served as consultants with the city’s engineering department on the projects list.

City Chief Financial Officer Scott Burher said he would like the city to issue the revenue bonds no later than this fall. He also wants to restructure or refund a 1993 variable-rate bond that, as he put it, is pricing unfavorably. Burher said the 15-year-old security would perform better as a fixed-rate bond, and he wants the city to bundle the change to the 1993 bond with the issuance of the new revenue bonds.

Burher told commissioners that the security’s insurer, the Financial Guaranty Insurance Co., has had its rating downgraded by Standard & Poor’s from triple A to single A. He said a downgrade like that could create a default, which would trigger a higher interest rate. Moving to a fixed rate for the 1993 bonds “would naturally trade on the city’s double-A rating.”

“The kinds of things that are happening are illogical,” he said of what is going on in the bond market now with variable rates.

The 1993 bonds produced $46.3 million in revenue for the city and have an outstanding balance of $33 million for the next 12 years.

DeLong said the Utility Advisory Board has been instrumental in working with the city on the water and sewer improvements. Walker, Kentwood and East Grand Rapids, and Cascade, Ada, Grand Rapids, Wright and Tallmadge townships are “partner communities” with the city on the UAB.

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