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Committee clears notice for $5M lead-service-line bond package and $19.4M sewer project in Pontiac
Summary
Oakland County Water Resource Commission staff won committee approval to proceed with notices to issue bonds supporting a $5 million drinking-water SRF package for roughly 500 lead service-line replacements in Pontiac and a $19.4 million clean-water SRF sewer replacement project, with expected principal forgiveness reducing the county's repayable balance.
The committee on Feb. 11 recommended that the full board approve notices to issue bonds for two Water Resource Commissioner (WRC) projects in the City of Pontiac: a drinking-water SRF (State Revolving Fund) package to replace lead service lines and a clean-water SRF package for sanitary-sewer rehabilitation.
“We're here today requesting the notice of intent to issue bonds to sell for lead service line replacements — 500 lead services in the City of Pontiac,” said Ben Lewis, an engineer in the water resource commissioner's office. Staff said the state authorized $5 million in draws for the drinking-water project under the SRF program; about $1.25 million was offered as grant and another $1.25 million as principal forgiveness, leaving an estimated $2.5 million in repayable loan proceeds depending on actual draws.
Staff described the SRF structure: the county issues a bond instrument under Act 34 to evidence the loan, then draws funds during construction and seeks forgiveness or grant amounts at closing per SRF program rules. Financial adviser Stephen Bird said the loans are draw-based, with a project timeline of roughly 18 months to two years for construction and a 20-year repayment schedule thereafter. The subsidized interest rate cited was about 2% fixed on the repayable balance.
On the clean-water side, WRC staff said the state has authorized roughly $19.4 million to replace about 10,000 linear feet of sanitary sewer, with locations selected after post-construction television inspections and a condition-based ranking. That project also follows SRF procurement and prevailing-wage requirements.
Commissioners asked for maps and tracking of replacements, and staff said they maintain an online, color-coded map for communities the county operates and maintains and that they are preparing additional presentation-style maps to show completed and pending replacements.
The committee voted to recommend both notices to the board. Staff said final repayable amounts depend on invoicing and state reviews as work is performed, and that ratepayers of the Pontiac system will ultimately be responsible for any repayments required under the financing agreements.
