Millport weighs capping sewer‑lateral costs as fund deficit draws bond‑rating scrutiny

Millport staff reported June 11 that the city’s sewer‑lateral program has run a persistent deficit and that bond‑rating analysts have asked about the account in recent calls, prompting council discussion of modifications to the program.

Anthony, the staff presenter, told council the lateral account has been under stress and that staff and the finance director have been dipping into fund balance and borrowing from the general fund to complete projects. Finance staff said S&P asked about the sewer‑lateral account in at least two recent bond‑rating calls, focusing attention on the deficit.

Staff outlined how assessments and caps have changed over time: the program handled about 37 laterals in 2014 and roughly 65 in recent years, and staff estimated the current $50 annual assessment brings in about $115,000 a year. Staff also said council previously transferred roughly $136,000 in about 2019 to catch up on work.

Councilmembers pressed for clearer cost distributions and frequency data to evaluate options. One councilmember noted frequent out‑of‑pocket maintenance costs and asked whether the typical repair is an urgent, high‑cost event or a lower‑cost maintenance item. Public works staff said some repairs can be done in‑house for small parts and labor but contracted repairs, plus roadway restoration, can push total costs far higher; staff gave examples of in‑house work for a few hundred dollars versus contractor work that can reach several thousand.

The council discussed two main policy responses: capping the city’s contribution per repair, or capping residents’ liability and adjusting program funding accordingly. Several members asked staff to provide a breakdown by repair-cost bands (for example <$500, $500–$1,000, >$1,000) and a trend line over recent years to understand whether most work falls in the lower cost bands.

No vote or ordinance change occurred. Staff agreed to return at a future work session with detailed cost breakdowns, counts and scenarios for capping options so council can weigh fiscal and equity impacts.