Traverse City, Michigan, is investing in improved wastewater infrastructure. City commissioners recently approved a notice of intent resolution that will allow the municipality to issue up to $42 million in sewer system revenue bonds.
The resolution, which received unanimous support at a commissioner’s meeting, represents a $12 million increase from the previously authorized $30 million bonding capacity and continues the city’s ongoing commitment to water infrastructure upgrades, according to the Traverse Ticker.
The funding adjustment comes in response to higher-than-anticipated construction costs, plus additional engineering and contingency fees that have pushed the estimated project budgets higher. City officials have emphasized that while the resolution authorizes bonding up to $42 million, the city is not obligated to use the full amount if final costs come in under budget.
This latest funding initiative builds upon Traverse City’s established track record of water infrastructure investments. In 2022, the city approved up to $8 million in bonds for drinking and clean water project plans through Michigan’s revolving fund programs, which offer low-interest loans for municipal water projects.
Aging water and wastewater infrastructure has become a critical issue across the U.S., with many systems operating well beyond their intended lifespans. For medium-sized cities like Traverse City, securing adequate funding for these essential but often invisible improvements presents a significant financial challenge, particularly as construction and material costs continue to rise nationwide.
The approved funds will finance major upgrades to the city’s wastewater treatment plant, focusing on the headworks and ultraviolet (UV) disinfection systems. The headworks system serves as the initial screening and processing stage for incoming wastewater, while the UV
system provides chemical-free disinfection before treated water is discharged back into the environment.
Unlike general obligation bonds, which rely on property tax revenues, these sewer system revenue bonds will be repaid through user fees collected from residents and businesses connected to the city’s sewer system. This funding mechanism ensures that the cost burden falls directly on system users rather than the broader tax base.
The notice of intent resolution triggers a 45-day referendum period during which residents can file petitions calling for an election before the bonds can be issued. If no petitions are filed during this period, city commissioners will likely vote in July to adopt an ordinance authorizing the actual issuance of the bonds.
The sewer infrastructure project comes at a time when municipalities across Michigan are grappling with aging infrastructure challenges. The American Society of Civil Engineers’ 2023 Infrastructure Report Card gave Michigan’s wastewater infrastructure a grade of C, noting that up to a quarter of the systems in the state are approaching the end of their useful lives and will require about $18 billion in investments over the next 20 years.
For Traverse City, a popular tourist destination situated on the shores of Grand Traverse Bay, maintaining water quality is particularly crucial for both environmental protection and the region’s tourism-dependent economy.
The city’s commitment to water infrastructure is already evident in ongoing projects, including the recently completed Boardman River Wall Stabilization and Sewer Relocation Project. That initiative, which began construction in December 2022, addressed critical deterioration of a 1930s-era concrete retaining wall supporting a major sanitary sewer main along the Boardman River in downtown Traverse City.
That project, which cost approximately $2.5 million, was funded through low-interest loans from the Clean Water State Revolving Fund (CWSRF), the same program the city plans to utilize for the newly approved bonding.
The latest bonding resolution comes on top of a comprehensive five-year plan for water infrastructure improvements identified in the city’s Clean Water State Revolving Fund Project Plan. This broader initiative, with an estimated total cost of $28.7 million, addresses recommendations from recent Stormwater, Asset Management and Wastewater System (SAW) evaluations and includes projects specifically designed to reduce inflow and infiltration issues and prevent sanitary sewer overflows.
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