Mount Clemens leaders favor directing ARPA money to water and sewer; staff to return with priorities

City Manager Johnson told the Mount Clemens City Commission that the city has received $845,879 of a planned $1,691,758 in American Rescue Plan (ARPA) funds and recommended directing most of the allocation to water and sewer capital projects, not streets or general equipment, because federal rules limit eligible capital expenditures to water, sewer and broadband.

Commissioners responded that water and sewer needs are substantial and that they want a prioritized list with more cost and feasibility details before committing funds. "We're recommending that most of our ARPA funds be used for water and or sewer capital projects," Johnson said. Commissioners raised lead service line replacement, water main repairs in residential neighborhoods and larger questions about whether to repair the existing treatment plant or pursue a costly connection or new plant.

Why it matters: ARPA rules allow local governments to replace revenue, cover COVID-related costs, pay premium wages to essential workers and invest in water or sewer infrastructure; funds must be spent by the end of calendar year 2024, Johnson noted, which places a time constraint on large projects. Johnson told the commission the first ARPA payment was $845,879 and the total allocation scheduled is $1,691,758. He also warned that revenue-replacement eligibility must be determined at the entity level and that the city did not qualify to use the program to backfill losses in a single fund such as the parking system.

Discussion focused on priorities and practical next steps. Several commissioners voiced support for prioritizing lead-service-line replacement and distribution-system work that directly benefits residential neighborhoods. One commissioner asked that the administration consider a $25,000 premium-pay proposal to extend the $1,000 payments already given to some employees to the water, sewer and DPS workers who were labeled essential during the pandemic; staff estimated that would cost about $25,000 for roughly 25 employees. Commissioners noted larger capital figures on staff lists — including an approximately $42 million estimate for building a new water plant and a roughly $5 million estimate to connect to the Great Lakes Water Authority — and said those larger projects require detailed analysis and public engagement.

The commission did not take a formal vote to commit funds at the meeting. Instead, members asked staff to return within a month or two with prioritized projects, cost estimates and eligibility research for specific items (including a proposed Cherry Street Mall drainage project) so commissioners can recommend allocations that meet federal eligibility rules. "We can come back and give you a specific project," Johnson said. "We can probably do that within a month or two."