October 24, 2014

Standish says yes to water, sewer utilities for developments

By John Fischer|Staff writer
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STANDISH — In a special meeting of the Standish City Council May 21, council voted to accept the final counterproposal by the Migizi Corporation to receive water and sewer utilities from the city of Standish in a 5-1-1 vote.

The proposal says the Migizi Corporation, a developmental entity of the Saginaw-Chippewa Indian Tribe, would receive discount utility rates for ten years and profit from tap-in fees for twenty years. After ten years, ownership of the utility infrastructure would be turned over to the city.

For most out of city residents receiving city utilities, the cost is double that of the in-town rates.

Mayor Kevin King cast the dissenting vote; Council member Richard Vollbach was absent.

There was brief discussion preceding the vote, mostly created by Mayor Kevin King.

King questioned the $1.3 million budgeted laid out for construction and engineering costs of the utility extensions and waned to ensure the city wouldn't be responsible for change-order costs or overages.

"We're not paying a dime [if the Migizi Corporation exceeds $1.3 million]," King said. He added the final contract should stipulate that.

King also raised concern over the legality of "locking" the Migizi Corporation into reduced rates, which are even lower than current in-city rates.

"Are we in a position, legally, to change that?" King asked, citing a legal opinion which said it is illegal.

Council member Jerry Nelson countered King's question, referencing several past court rulings in Michigan allowing utility companies – Standish City would be classified as a utility company in this instance – to offer reduced rates outside of the city limits.

In interviews after the meeting with King and Standish City Manager Mike Moran III, differing opinions of the agreement were conveyed.

King says he would have preferred Migizi pay full in-city rates.

“I would have been thrilled if they at least paid in-city rates,” King said, adding in-city rates for water are $6.70 per 1,000 gallons and $3.30 per 1,000 gallons of sewer, with an additional sewer debt payment of $.75.

According to the final proposal by Migizi, it will pay $5 for water and $2.75 for sewer and $.20 for sewer debt.

King says he cast the dissenting vote because he doesn’t believe the agreement serves his constituents well.

“Any other business would pay double (the in-city rates),” the mayor said. “Somehow they counter with paying less than in-city rates?

“The city would be the loser in this deal. The townships left with smiles on their faces. Their tax base increases. Will we make some money? Probably, but there are businesses [that have been] in the city for years. They get no breaks at all.”

Moran, who isn’t entitled to a vote as city manager, was much more pleased with the outcome than King.

“I think, while speculative, we feel the given project [will provide] future growth benefits in the long run,” he said.

Moran says he doesn’t believe he was bested by Migizi by agreeing to accept rates lower than in-city, as he says negotiations have gone on since February, during which time there have been many proposals and counter-proposals.

“Based on the pros and cons, (City Council) primarily thought it will help stimulate (economic growth),” the city manager said.

Moran, who’s been involved with waterworks projects as city manager in Myland, Mich., says there are still several steps before a shovel can be put into the ground.

“We have to develop franchise agreements between the city, tribe and Migizi,” Moran said. “We’re about a month behind [from where initial plans were slated to begin].”

He added there is other paperwork and planning still needing to be finished and all parties need to hammer out the details.

Representatives from the Saginaw-Chippewa Indian Tribe could not be reached for comment.

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