A major project by East Bay and Acme townships to replace a crucial but severely corroded line that carries all the wastewater for both townships to the treatment plant in Traverse City – initially estimated at $11.4 million – has now climbed to $16.2 million after construction bids came in last week. The townships agreed Thursday to move ahead with the higher cost, but will still need to finalize their financing approach.

The project, in the works for years, will address a 2.7-mile ductile iron pipe that travels from East Bay’s pump station #1 (pictured, map) near the intersection of Indian Trail Boulevard and Pine Grove Avenue south to the TART Trail, then goes west along the TART Trail paralleling Parsons Road to the Traverse City treatment plant on the north side of Boardman Lake. Installed in 1974, the 51-year-old pipe is nearing the end of its design life, suffered a break in recent years, and faces the risk of continued forced shutdowns “as the pipe ages and corrosion worsens,” engineering firm Wade Trim previously said.

East Bay and Acme are partnering to build a new sewer line parallel to the existing line, which will remain in operation while the new pipe is being built. Once the new pipe is ready, the old pipe can be shut off, cleaned, and eventually rehabilitated – serving as a backup to the new pipe. “Once completed, the ability to divert wastewater flow from one force main to another will accommodate future periodic inspections and repairs,” the township’s website states, adding “needed resiliency and redundancy to this critical infrastructure for decades.” 

As recently as August, the townships were operating on an assumed project cost of $11.4 million. East Bay and Acme have secured $3 million in grant funding, including $1 million in Congressional Community Project funds and $2 million in American Rescue Plan Act (ARPA) funds from Grand Traverse County. The ARPA funds must be fully spent by the end of 2026. Acme and East Bay have also committed $1 million each in cash, bringing project funding to $5 million. In August, East Bay Township trustees approved bonding up to $6.5 million to cover the remaining project costs. East Bay and Acme would repay that debt in roughly a 60-40 percent split, respectively, based on their cost-sharing agreement.

Once construction bids were opened on September 15, however, the lowest bids totaled over $14 million. With bond costs, engineering, legal fees, and a five percent contingency added in, the project estimate now sits at over $16.2 million. Minus the $3 million in grants, East Bay would be responsible for about $8 million and Acme Township responsible for about $5.2 million of the total project budget.

At Thursday’s joint special meeting, trustees reviewed the bids and agreed to move ahead. East Bay Township Supervisor Beth Friend noted that construction contracts are increasingly coming in over budget in the post-COVID era. “Yes, this project came in more than expected,” she said. “It wasn't a big shocker to us. We didn't like it...but it happens, we all know that.”

Acme Township trustees approved a resolution affirming their support for the higher project cost, while East Bay Township trustees approved the construction contracts. The project is divided into two segments, including from the lift station to Garfield Avenue and from Garfield Avenue to the treatment plant. The geography of both segments varies significantly, requiring different construction approaches – including a combination of open cut construction and horizontal directional drilling.

Walton Contracting was awarded the contract to handle construction from the lift station to Garfield Avenue at $5.947 million. M&M Contracting was awarded the contract to handle construction from Garfield Avenue to the treatment plant at $8.226 million. Trustees also awarded a $620,000 contract to Wade Trim Thursday for construction engineering and oversight services through the end of the project, a figure reflected in the $16.2 million budget. The bulk of construction is expected to take place in 2026 – with the separated contracts also helping ensure the townships can fully spend the $2 million in ARPA funding before the end of next year.

Township leaders will next need to nail down their financing approach. Options could include increasing township cash contributions, using sewer fund reserves, and/or increasing the bond amount. “We have really multiple options: full bonding all the way to cash payment and everywhere in between, kind of hybrid options,” summarized Trustee Matt Cook. To bond more than $6.5 million, East Bay Township will need to post a public notice of the new higher bond level and wait for a 45-day referendum period to pass before proceeding.

Township trustees agreed to reconvene in November to finalize their approach. Bond consultants are also expected to assist with the financial analysis. Friend said the bond advisors have noted that “bond rates right now are looking really good,” with a potential interest rate under four percent. Even with a higher project cost, Friend sought to reassure rate payers that the township has financing options available. “I don’t want anyone from the public to feel like this is going to jerk around rates,” she said. “I don’t see that happening.”