EGLE to help pay for water meter replacement
By SUE SUCHYTA
HEIGHTS – Grants, water lead line replacement, water meter replacement and other water projects took center stage Nov. 28 as City Engineer Ali Dib updated the City Council on progress and funding.
Dib explained the genesis of the city’s capital improvement projects which were initially funded by 2021 limited obligation capital improvement bonds. The bonds funded four projects that city officials deemed “operationally critical.” They included three of the six combined sewer overflow projects that the city must complete, as well as the replacement of all of the city’s aging water meters systemwide, both commercial and residential.
“The CSO separation was a commitment that the city had made to the Department of Environment, Great Lakes and Energy, so this is a signed commitment,” he said. “So, when I came on board, I was looking at a signed commitment the city made with a deadline and a timeframe, and based on that commitment, EGLE had issued our operating permit.”
Dib said the permit is a national pollutant discharge elimination system permit, which is subject to renewal every three years, and is a federal requirement based on the Clean Water Act.
He said that two of the three initial CSO projects are now completed, with the third project in the design phase prior to being sent out for bid in January, with construction beginning this spring, since by the end of 2025 the project must be completed.
“We are on schedule, and we are funded,” Dib said.
He said the construction estimate used to establish the budget was done before the pandemic, so the estimated cost of the three CSOs at today’s costs will use $22 million of the $25 million bond sales.
Dib said the original allocation to replace water meters from the bonds sales was $9 million, but should have been $12 million.
“Not only do we not have enough for it, but we underestimated the project cost to begin with,” he said. “The administration had decided early on, the mayor’s direction to me, was to not to seek any additional funding to address the shortfall to make these projects happen.”
Dib said they are not requesting more bonds for the operating budget increase because that would increase water rates to pay back the bonds.
Instead, he said he has applied for funding grants and low interest loans available for drinking water projects.
Dib said they applied to the state’s drinking water revolving fund, the state’s clean water revolving fund and other agencies that address water project funding.
He said that both of the state funds have a 50 percent loan forgiveness based on Dearborn Heights’ status. The rest would be a 20- to 40-year low-interest loan.
Dib said the low-interest loans are aggressively sought by cities across the state, so Dearborn Heights hired a professional to make the city’s case for the loans.
He said the city received a Michigan clean water state revolving fund loan for $3.1 million to partially fund the third CSO (which is currently in the design phase). It was granted with 50 percent loan forgiveness, which will free up some of the bond money for the remaining critical infrastructure project, the water meter replacement.
Dib said the Michigan drinking water state revolving fund, which has more restrictive conditions than the clean water SRF, for the lead line replacement, approved the city for a 51 percent loan for the $15 million project, which is $7.65 million.
He said a Community Development Block Grant for disaster recovery infrastructure approved $2.091 million for the replacement of the Hipp Street and Polk Street bridges, which is 80 percent of the estimated cost to replace the bridges.
“As wonderful as these grants are, I’m still short on funding the water meter $12 million,” Dib said. “I will be short $6 million, so we took that issue over to EGLE, and it is my extreme pleasure to announce on Nov. 17 the state EGLE representative met with us and they decided to give us a full $8,318,332 dedicated only to the water meters.”
He said he believes the city will now be in the black for the four critical infrastructure projects.
Dib said the city has put itself on a list for federal aid for roadways, and it has received approval for a 2026 project for Cherry Hill Road for $2.5 million, which he said is “on the schedule.”
He said the city is also applying for a Federal Emergency Management Agency Building Resilient Infrastructure and Communities grant, and for a U.S. Department of Transportation Safe Streets and Roads for All grant, as well as for money from the Michigan clean water revolving fund and Economic Development Corporation grants.
“When I first hired in, I did a high-level capital improvement plan,” Dib said. “I took all the directors and figured out what’s needed and is at end of useful life, and the numbers were just scary. You were looking at $200-plus million.”
He said that kind of money cannot be funded out of the city’s operating budget, and they are going to have to find alternate resources.
Dib said the current projects are funded subject to deadlines, so the city’s personnel will be busy overseeing the administration of the projects.
“I don’t want to leave any money on the table,” he said. “These things are badly needed by the city and we want to take advantage of them.”
Dib said they already have made contact with the water meter suppliers, because he knows how important it is to residents to get accurate water usage readings and billings.
He said Dearborn took three years to replace its meters, since operations and billings must be maintained in the interim. Dearborn also replaced lead water service lines and replaced water mains at the same time, with one company overseeing the project with separate subcontractors.
Dib said commercial meters will be replaced before residential meters, since it is easier to access businesses.