Traverse City Record-Eagle

Grand Traverse County

August 19, 2009

County to cover up to $500K for septage

Plant will need $455K to make bond payment

BY BRIAN McGILLIVARY

TRAVERSE CITY -- Five township supervisors can put away the antacid -- Grand Traverse County will cover up to a $500,000 shortfall at the septage treatment plant.

The decision put a premature end to what's become an annual bout of high anxiety for the five townships on the financial hook for any losses at the plant.

Grand Traverse County has reluctantly covered the shortfalls since the plant first opened in 2005, but each year county commissioners have threatened to force the townships of East Bay, Acme, Garfield, Peninsula and Elmwood to ante up instead.

The plant tends to fall short of cash when bond payments come due in the fall. The plant will need $455,000 to make a Nov. 1 bond payment.

This year East Bay Township Supervisor Glen Lile made an anticipatory strike, requesting a credit line of $500,000 before anyone determined the expected shortfall.

"I wanted to get this thing right behind us so we can move on and we don't have to worry every time a payment comes due," Lile said.

The township supervisors occupy five of seven positions on the county Sewer and Water Committee that oversees the plant.

County commissioners voted 6-2 Tuesday night to recommend they approve the cash advance. They'll take a final vote on Aug. 26.

Commissioners Ross Richardson and Christine Maxbauer voted no.

"We are loaning Grand Traverse County taxpayers' dollars interest free to another county, Elmwood Township (in Leelanau County), and I won't vote for that," Maxbauer said.

Richardson said he saw no reason to provide "an open checkbook" when county financial officials will know next month how much cash the plant needs.

Commissioners Addison Wheelock Jr., Larry Inman, Larry Fleis, Bruce Hooper and Mike Stepka voted yes.

Wheelock said he was concerned because county revenue is down and the board will likely have millions of dollars in budget requests they won't be able to fund in 2010.

He voted for the advance, he said, because the county and townships are working through the financial problems at the plant and should have a plan this year to see the plant past its rough start.

The plant partially collapsed a month after it opened in 2005, and it takes in about half the septic tank waste originally projected. In 2007 -- its worst year financially -- the plant required $438,000 from the county to stay out of default. Last year it trimmed its debt to the county to $300,000. Some county officials project it will need less than half the $500,000 line of credit to get through 2009.

The plant's finances were helped by a division of CMS Energy that paid the county about $500,000 a year to take contaminated groundwater leachate from underneath Bay Harbor. The amount of revenue will increase because CMS has begun shipping more leachate to the plant.

A judge's stay recently put on indefinite hold plans to build a deep-injection well in Alba to take the leachate.

County officials expect the leachate to keep coming for another two to three years while CMS studies other treatment alternatives, keeping the plant financially afloat.

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