This spring the Granholm Administration was floating a plan to use the AUC-backed Proposal 2 bond dollars approved in 2002 as a revenue source for the state’s brownfield clean-up program.
While those dollars were meant for sewer infrastructure, the state has borrowed virtually none of that money in the eight years since voters approved the measure. The administration’s position has been that they did not want to increase the state’s debt service payments at a time when they were struggling to balance the budget because of sharply declining state tax receipts.
Despite MITA’s continuing pressure over the last few years to spend those bond dollars on unfulfilled sewer needs, the prospects for doing so have been dim. MITA sees the Granholm Administration’s desire to access $275 million for the brownfield program as an opportunity to leverage immediate spending on the State Revolving Fund sewer program.
MITA staff has been engaged in negotiations with administration officials and key leaders in the state Senate on the issue. MITA’s support for the proposal hinges on a few key concessions:
- Reducing the requested brownfield money by roughly half
- Requiring dollar for dollar borrowing for the SRF for every dollar spent on brownfield cleanup
- Approving Sen. Gilbert legislation that creates a new $100 million S-2 grant program to pay for upfront engineering costs of water and sewer projects. A key provision allows grants to be awarded to communities financing outside the SRF program, thereby creating greater statewide financing capabilities.
- Creating a water and sewer infrastructure financing task force modeled after the Transportation Funding Task Force (TF2). The goal of the group would be to seek reforms to the SRF program to allow more communities to qualify and seek innovative approaches to underground infrastructure investment in Michigan.
Negotiations are currently underway on these points. MITA is teaming up with the Michigan Chamber of Commerce, the Michigan Municipal League, American Council of Engineering Companies and a few other organizations to push for these key concessions. The urgent need to find a funding source for the brownfield program is putting the entire legislative proposal on the fast track. Things could develop very quickly, with passage possibly happening before the end of the year.
MITA staff will keep you informed as the legislative efforts continue.
If you have any questions, please feel free to contact Mike Nystrom at mikenystrom@mi-ita.com, or Keith Ledbetter at keithledbetter@mi-ita.com or call the MITA office at 517-347-8336.
