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Council authorizes ordinance to permit sanitary sewer bonds as bids come in far below estimate
Summary
Council introduced Ordinance No. 223 authorizing up to $7.15 million in revenue bonds for the sanitary sewer system, while staff reported construction bids for lining and manhole work of roughly $1.775–$1.9 million and a projected project cost of about $2.69–$2.83 million, potentially lowering the city’s borrowing needs.
The Bronson City Council introduced Ordinance No. 223, which would authorize the issuance of up to $7.15 million in revenue bonds for the city’s sanitary sewer system. City staff told the council the bonds would be repaid from net sewer revenues over 30 years and that state revenue-sharing would be pledged as backup security to satisfy Michigan Finance Authority investment-grade requirements.
Council packet materials showed the $7.15 million figure as the maximum authorization; staff emphasized the city would not be required to draw the full amount. "The total bond amount is $7.15 million," staff said while explaining the ordinance and the publication requirement for the ordinance in the local newspaper.
When bids opened July 2 for the sewer lining and manhole rehabilitation project, the low bidder offered $1.775 million for the base work and $1.9 million if the three alternate bid options are included. Staff and the project engineer estimated the total project cost, including engineering, to be roughly $2.69 million to $2.83 million — substantially below the earlier $3.8 million engineer estimate and far below the bond authorization cap.
"The result of the bid was a really great result for the city and its water sewer customers," city staff said, noting the low bid reduces the amount the city would need to borrow. Staff added they have begun discussions with federal and regional partners about additional funding and said the city has a pending congressional direct-spending application that, if successful, could add further support to the project.
Because the award is contingent on securing external funding, the council moved to accept the low bid subject to those funds becoming available. City staff and the consultant said construction is expected to begin after the first of next year according to the contractor’s schedule.
The council also heard from an attorney from Miller Canfield who was present to answer legal questions about the bond authorization. The ordinance was moved for approval by a council member; the meeting record shows the council voted in favor. Final bond sizing and any draw on the $7.15 million authorization will depend on final bids, grant outcomes and whether the city elects to include alternate work within the same contract.
