Dearborn Water and Sewer Fund Accountant Jenn Ryan answers questions from the city council about the Combined Sewer Overflow project during a public meeting Sept. 6 at the Dearborn Administrative Center.
By ZEINAB NAJM
Times-Herald Newspapers
DEARBORN — The City Council unanimously approved the request to put the new CSO millage of .22 mills on the winter property tax bills during a public meeting on Sept. 7.
Through the bond, $60 million will be generated needed for additional sewer system improvements after residents approved the proposal Aug. 7.
In the Aug. 7 primary election, 11,068 voters chose the option to raise taxes to pay the remaining $60 million due on the Combined Sewer Overflow project, while 4,286 voted against the plan, which would have raised water rates to pay the $60 million had the proposal failed.
The city plans to issue $23 million of the $60 million this month to fund CSO projects for three projects scheduled for spring 2019 and spring 2020.
Water and Sewer Fund Accountant Jenn Ryan said the second half of the bonds will be issued in December 2020 after council approval. She also explained that future tax rates will be decided during the city’s annual budget process
“The CSO millage only goes on the winter bills so that’s part of the why we had to make is high enough to pay for both the 2019 April and the October debt service payments,” Ryan said. “We aren’t issuing the total amount because we’re required to spend the funds within a certain time period and the other projects are a couple years down the road.
Project 1 for spring 2019 will cost $6.93 million for sewer separation and water main replacement at the area bordered by Michigan, Colson, Greenfield and Schlaff along with the area bordered by Hemlock, Blesser, Greenfield and Chase.
Another sewer separation and water main replacement project costing $15 million is scheduled for spring 2020 in the area bordering Gulley, Cherry Hill, Telegraph and the Rouge River.
The third project costing $980,000 also will be for spring 2020 to install a, “bypass gate at capture shaft C6 for protection to the properties in east Dearborn against the sewer backup into basements due to potential malfunction of the facility,” according to the city’s capital improvement plan.
Finance Director and Treasurer James O’Connor explained that the city has to procure the construction contracts to have the resources for the projects.
“We could’ve waited to issue these bonds until December,” he said. “That would be the latest because that’s when Engineering is going to have everything out and looking to award the contracts, but interest rates are continuing to go up so we wanted to get it done as soon as possible.”
During the meeting held at the Dearborn Administrative Center, Councilman Michael Sareini offered to pass the resolution and Councilwoman Leslie Herrick supported.
The resolution was read as, “to establish and authorize the .22 mills for the tax bill for this winter 2018 and then to recognize $730,000 tax revenue budget and appropriate the same amount” by O’Connor and approved as such.
“If a premium is received on the bonds, the additional funding will be used to offset the anticipated CSO financing in 2020,” according to the tax proposal.
Dearborn is required to complete the project in order to comply with the CSO permit issued by the Michigan Department of Environmental Quality which calls for the city to reduce pollution in the Rouge River. The CSO projects are scheduled for a 2025 completion.
According to the city’s website, the property tax increase cost is estimated to be $48 a year over the life of the bonds for the owner of a home with the average taxable value of all Dearborn homes, which is $55,000. One mill represents $1 for every $1,000 of a property’s taxable value.
“The rate of the property tax designated for the CSO will fluctuate each year, because project costs will fluctuate each year, depending on the stage of the construction,” the website read.
The tax is estimated to start at .22 mills in the beginning, with an average annual rate of .87 mills, and cannot to rise above 1.12 mills, according to the city’s website.
The property tax will appear on the winter 2018 tax bills and will remain on the tax bills until 2045 to generate the $60 million needed.
For more information on the CSO project go to www.cityofdearborn.org.
(Zeinab Najm can be reached at [email protected].)