East Bay Preps for Major Sewer Project w/Acme, Considers Rate Changes

East Bay Township trustees voted unanimously this week to seek up to $6 million in state funding to help close the gap on an $11 million project with Acme Township to replace a sewer force main – a critical but severely corroded line that carries all the wastewater for both townships to the treatment plant in Traverse City. Trustees also discussed options for changing the water and sewer rate structures in East Bay Township, a conversation expected to continue this spring that could lead to rate increases next year.

East Bay and Acme operate independent sanitary sewer collection systems but “rely jointly on a force main to convey wastewater to the wastewater treatment plant located in Traverse City,” according to consultant Wade Trim. The pipeline is the only one carrying wastewater to the plant, meaning “both townships rely on this force main to maintain wastewater service for their entire service area of roughly 2,700 customers.”

The 2.7-mile ductile iron pipe travels from East Bay’s pump station #1 (pictured, map) near the intersection of Indian Trail Boulevard and Pine Grove Avenue south to the TART Trail, then goes west along the TART Trail paralleling Parsons Road to the treatment plant on the north side of Boardman Lake. Installed in 1974, the 50-year-old pipe is nearing the end of its design life, recently suffered a break, and faces the risk of continued forced shutdowns “as the pipe ages and corrosion worsens,” according to Wade Trim.

East Bay and Acme plan to partner on constructing a new sewer line parallel to the existing line, a project estimated to cost $11 million. When complete, the townships’ wastewater flow would be diverted to the new line, allowing workers to repair the old line. “Once completed, the ability to divert wastewater flow from one force main to another will accommodate future periodic inspections and repairs,” according to East Bay Township’s website. “The project will add the needed resiliency and redundancy to this critical infrastructure for decades.”

Grand Traverse County awarded East Bay Township $2 million in American Rescue Plan Act (ARPA) funds for the sewer line. The project has also received $1 million in Congressional Community Project funds. Both townships have tentatively committed $1 million each from their sewer funds, bringing total funding to $5 million. That leaves an approximately $6 million gap, of which East Bay is responsible for approximately 64 percent. Trustees approved a resolution seeking state grant funding to close the gap, which Township Supervisor Beth Friend said would be filed as a legislative request with the office of State Sen. John Damoose. Acme Township trustees will consider passing a similar resolution, Friend said.

Brian Sousa of Wade Trim told trustees this week that the firm had completed a topographic survey of the potential route of the new pipe, including two options west of Garfield. The path could follow the current route along the railroad right-of-way – or take an alternative route along Hannah Avenue. Completing the survey was a “heavy lift,” Sousa acknowledged, given the project length and the fact portions of the route go through a “fairly busy section” in Hannah Avenue. Sousa said there are opportunities to collaborate with the City of Traverse City since part of the route is in city limits, and since the city has been eyeing the potential replacement of a water main along Hannah. “This may be a good time for some cost sharing, depending on how the schedules all shake out,” Sousa said.

Next steps will include preliminary design and engineering – a process that will include finalizing the route – and determining the methodology for construction. “Are we going to install it through directional drill, which is just the boring underground?” said Sousa. “Are we going to have to install some of it through open cut from the surface?” There are “tricky spots” along the route close to building foundations and rights-of-way where directional drilling “can be a problem, because there’s a lot of pressure involved,” Sousa said. “It can also be a problem with the existing infrastructure. With the age of that existing force main, we don’t want to get too close to it.”

The townships are facing a ticking clock, not only due to the condition of the existing pipe but because of federal deadlines tied to ARPA funding. Those deadlines require ARPA funds to be committed by the end of this year and spent by the end of 2026. Friend said the goal is to start preliminary engineering on the new pipe as soon as possible, with the goal of construction taking place in 2025 and 2026 “so everything is wrapped up by the end of 2026,” she said.

The pipe is one of several water and sewer projects totaling millions of dollars facing East Bay Township in the coming years. Significant upgrades underway at the city wastewater treatment plant will result in rising treatment costs for the township, according to consultant Dawn Lund of Utility Financial Solutions. Other infrastructure needs, like multiple well projects, will also contribute to rising expenses. Lund said the good news is that both the township’s water and sewer funds are “financially healthy.” Financial audits show approximately $6.1 million in cash in the sewer fund and $5.5 million in the water fund as of the end of 2022 (2023 numbers aren’t available until April). That gives the township the option to bond and/or pull down its cash reserves for some projects, though in the latter scenario the township should decide how much of a cash balance it wants to retain and have options for building those reserves back up, Lund said.

Options for doing so could include rate increases. The subject of rate increases – and the township’s system for setting rates – was the topic of extensive board debate this week. The township’s ordinance allows for a yearly 3.5 percent increase in both water and wastewater rates, but those haven’t been implemented since at least 2015. Lund said the township’s monthly water rate – $23.36 for a typical residential customer – is a quarter of the federal affordability standard of about $100. The sewer rate, meawhile, is $26.42. “You guys have low rates – very, very low rates,” Lund said.

Trustees debated the merits of sticking with the township’s current rate system – which assigns a benefit or “residential equivalent unit” (REU) to customers as a base rate for billing for water and sewer, with additional costs charged for water if customers exceed a monthly minimum usage – or moving to a system that charges based on the size of the customer’s meter, plus actual usage. That system is a preferred industry standard for “fair and equitable” billing and is the most common approach in Michigan, Lund said.

Trustees were divided on moving to a new system and will take up the discussion again later this spring at their May meeting, according to Friend. Several trustees agreed that even if they keep the current system, it’d be worth revisiting the REU chart and taking another look at township connection fees for new hook-ups. Meanwhile, an increase seems likely for at least sewer and possibly water rates in 2025, though that will be officially decided in the coming months. If implemented, the increases would be capped at the ordinance level of 3.5 percent. “You’ve enjoyed not having increases for years now, but certainly we can’t really do that forever – especially with these projects coming up and this increase in cost,” said Lund.