St. Clair Shores council authorizes notice to pursue low-interest state loan for sewer-separation project

St. Clair Shores — The City Council on April 6 authorized publication of a notice of intent to issue bonds as the first step to secure a low-interest loan from the state's Clean Water State Revolving Loan Fund for a sewer-separation project.

Council members heard staff explain the project is intended to separate combined sanitary- and storm-sewer connections in the northern portion of the Martin district, create an outlet pipe and reduce both discharges to the lake and basement flooding for affected homes. City staff said the project combines outside grant awards and a loan to cover anticipated costs.

The process the council approved does not itself issue bonds. Jeff Aronoff of Miller Canfield, speaking for the city's bond counsel, told the council publication of the notice begins a 45-day period during which 10% of the city's registered electors may file a petition to force a referendum. Aronoff also said the state's revolving fund program has predetermined interest rates this fiscal year: 2.5% for a 20-year term and 2.75% for 25 years.

"The first thing you need to do is authorize the publication of a notice of intent," Aronoff said, adding that the notice is a quarter-page newspaper ad that starts the statutory petition clock. City staff also told council members that grants — including a contribution from John James — and an existing local clean-water tax will help fund the work. "We were very fortunate that [the award] went through the process," staff member Mr. Lent said.

During discussion Council member Vitali framed the project as addressing major resident concerns: "There’s no way I can campaign on the idea of clean water and infrastructure and not be in favor of this," he said, adding the program would not impose new taxes. Residents who spoke during public comment urged the council to put any bond on the ballot. David Deacon said the bond’s repayment appeared to be "through taxes" and asked council to defer action and let voters decide; city counsel and staff responded that the limited-tax general obligation structure does not authorize new taxing authority and that the city expects to pay debt service from sanitary-sewer revenues.

Council moved and approved the resolution authorizing publication of the notice of intent; counsel and staff said that if the notice leads to no petition the council later may authorize bonds and award construction contracts under the program timelines. Staff noted the project is in the state's fourth-quarter financing pool, and bids will need Council approval in June with an anticipated Eagle approval on Aug. 5 to preserve the financing slot.

The council’s action on April 6 is limited to publishing the notice; the city still must complete subsequent approvals and, if no petition succeeds, later authorize bond issuance and contract awards.

Next steps: the notice will be published and staff will continue design and permitting work to meet the financing timeline outlined by the engineering firm and state program.