Bruce trustees OK
12-year loan for 34 Mile Rd
by CHRIS GRAY
Financial constraints are causing Bruce Township officials to ask for an extended loan from the state to pay for a significant paving project.
Observer Staff Writer
The Board of Trustees voted 4-1 to go forward with a 12-year term on a State Infrastructure Bank (SIB) loan that would assist in paying for paving 34 Mile Road. Clerk Susan Brockmann was the dissenting vote at the board's Nov. 13 meeting.
The township, in conjunction with the Macomb County Department of Roads, is seeking $1.8 million in federal grant dollars to pave 34 Mile Road from Campground to Fisher roads. The entire project would cost about $2.2 million.
The grant requires a match, meaning both the county and township must pay $472,500. With its tight $1.1 million budget, the township decided a SIB loan would be the best route for providing the match.
SIB loans are provided to public and private entities for transportation improvements, and are considered on a case-by-case basis. Treasurer Deborah Obrecht said a 12-year loan at 3 percent interest would be $47,468 a year for the township.
The Department of Roads is applying on behalf of the township for the loan as it doesn't have the collateral to apply. The township paid $2,500 for the county to administer the loan.
Township engineers said when speaking with Department of Roads Director Bob Hoepfner, he said the township should only go after a five-year term since that is the only time length he has seen for SIB loans.
Trustee Paul Okoniewski said he didn't find Hoepfner's answer acceptable, and wanted a better explanation as to why the township couldn't have a 10-year or 12-year term.
"Even though we have to go through the county on this, he should not be dictating the terms," he said. "It should be us, the ones that are going to make the agreement, that agree to what the terms are."
Obrecht said the township has to show financial backing to justify going for a 12-year loan term in lieu of five years. She said if approved, the township gives the money to the county in order to pay the state for the loan.
She said both the township and county are paying $472,500, and wondered if other projects the department is considering is affecting the decision to allocate those funds.
Brockmann said she voted against the loan because she believes the township shouldn't take on more debt when it's already struggling with its sewer debt.
"If things were in a better position, I would want to take advantage of the funding, it is a great deal to be funded by federal dollars," she said outside of the meeting. "I can't see putting the township into more debt at this time."
In its 2013-14 budget, township officials agreed to levy a 1 percent fee to residents to offset the costs related to treasurer and assessment operations. The money freed up by this fee would then be used to help pay for the loan.
Brockmann said if the loan was approved, she couldn't see the township removing the 1 percent fee anytime soon.
"It sure would be hard to take it back off when you're committed to a 12-year loan," she said.