Water System Upgrades Prove Costly for Alpena Township | News, Sports, Jobs
ALPENA – A series of service line breaks and other unexpected water system repairs in 2021 and 2022 caused the Township of Alpena to spend $410,480 more than it had planned.
The township allocated $250,000 for a maintenance allowance to its water utility contractor F&V Operations, but expensive repairs drove the expense up to $660,480.
There are also four projects for which the township has not been billed, so the shortfall will increase before the end of this month.
The township is awaiting word on a 40-year, $15.8 million loan from the state that would allow the township to replace all of its service lines. If approved, the loan money would come from the state’s Clean Water Revolving Fund.
Township supervisor Nathan Skibbe said unexpected system failures needed to be corrected to restore water service to customers and reduce the amount of water wasted in the ground.
He said that unfortunately the additional costs would hamper the planning of other projects, but, he added, unexpected system replacement projects mean that more reliable parts and materials are now available for customers who have been affected by service line interruptions.
“It definitely puts us in a dry financial spot, but it’s not entirely bad because we’re making improvements,” Skibbe said. “It stinks though because it limits what we can do for scheduled searches. In a perfect word, we would like projects to be scheduled and not just to arise unexpectedly.
The maintenance allowance granted to F&V is supposed to last from September 1 to the end of August. If F&L does not use all of the $250,000, the balance is carried forward to the following year. If there are overruns, the municipality is responsible for the cost overrun, which comes from the water fund.
According to the township’s most recent audit, it has just over $5 million in its exclusive fund, which acts as the township’s water and sewer fund.
Skibbe said it’s impossible to predict how many more service lines will need to be replaced in the coming months, but he added that the board has allocated more than $100,000 more to F&V for repairs and maintenance for next year. He said he hoped the state would approve the loan request and work could begin to replace service lines throughout the township.
“A total of $13.1 million will be used to change all lines,” he said.
Skibbe said he likes the township’s chances of receiving the low-interest loan because the state has already labeled the township a disadvantaged community, which gets special consideration. A disadvantaged community may also benefit from a level of debt forgiveness, which could reduce the township’s payments if it receives the loan.
“It could be zero, it could be up to 70%,” Skibbe said. “We won’t know what our payout would be until we find out.”
Skibbe said he expects the loan to be announced in the next 60 days or so.
In the 1970s, the township used blue polybutylene pipes which break down much faster than copper water pipes. Skibbe said copper is being used now and the goal is for all service lines to be copper in the future.
“Unfortunately they used the blue poly, which was a poor material,” he said. “If I’m not mistaken, there was a collective action against the company, but the municipality did not participate in it.”