Property owners around the four Midland-area dams affected by a May flood could pay an annual assessment between $237 and $3,098 to fix the dams, with the cost varying depending on where a home is located, the duration of the loan and the final costs of repairs.
Consultants estimate the total cost of repairs to the Secord, Smallwood, Edenville and Sanford dams will come in at about $338 million, but the final cost to homeowners will depend on what type of financing or grants the Four Lakes Task Force is able to obtain for the project.
That cost includes an estimated $24 million for Secord Dam, $14 million for the Smallwood Dam, $208 million for the Edenville Dam and Wixom Lake area, and $92 million for the Sanford Dam.
“This is a big deal in terms of both its size and structure, but also the impact economically if we don’t do this and then the affordability for individuals if we do do it,” said David Kepler, chairman for the Four Lakes Task Force.
The potential assessment will be discussed in various public meetings in the coming months and, early next year, property owners will be consulted about the plan through a homeowner survey, Kepler said.
The damage to the dams and draining of some impoundments occurred during historic rains in May that breached the Edenville Dam May 19 by punching through the earthen embankment of the dam to send a surge of water down the Tittabawassee River. The surge overtopped the Sanford Dam and flooded the Midland area.
At the time of the flood, Four Lakes Task Force was in the process of purchasing the dams on behalf of Midland and Gladwin counties from Boyce Hydro, a private firm with a long history of skirting state and federal regulatory directives.
In the aftermath of the flood, as lawsuits mounted and repair costs loomed, Boyce Hydro declared bankruptcy. Four Lakes Task Force filed to seize the dams through eminent domain. Both court actions are still pending.
Four Lakes Task Force was planning to pay for dam upgrades and maintenance through a special assessment district even prior to the flood. But the damage sustained in May has increased the cost for homeowners significantly.
Kepler broke down the potential special assessment in a Thursday virtual meeting with property owners, divvying costs based on the lake a property owner lives on and three financing scenarios.
The financing scenarios start with a best-case scenario that includes a 40-year financing plan. The cost increases with the second scenario, a base case annual cost with a 40-year financing plan, and then tops out with a base case cost over 30 years. The financing scenarios do not incorporate the possibility of any type of grant funding or other revenue.
Under those scenarios, a property owner on Secord Lake would pay between $237 and $445 annually; Smallwood Lake property owners would pay between $410 and $769; Wixom Lake property owners will pay between $1,477 and $2,772; and Sanford Lake Property owners will pay between $1,650 to $3,098.
The numbers are higher for Sanford residents, even though the cost of repairs there are lower than what’s estimated for Wixom Lake, because there are fewer lots along Sanford to share the cost.
Consultants project the actual assessment will come in between low and base ranges based on 40-year financing, which means costs would be capped at $339 for Secord homeowners, $585 for Smallwood, $2,110 for Wixom and $2,357 for Sanford.
“We also recognize this has a displacement impact on some folks who can’t afford these numbers and we will be looking for grants,” Kepler said. “There are some government programs out there that can support people in handling the transition of an assessment like that.”
Property owners would be charged one assessment for front lots and about 25% of that assessment for back lots.
The numbers are preliminary estimates that could change depending on additional engineering estimates, other financing options and the fate of the task force’s attempt to use eminent domain to seize the dams.
The repairs could run through 2025 and are expected to last for about 75 years.
Apart from those long-term costs, the Four Lakes Task Force expects it will need about $15.5 million in interim financing for the engineering study needed to finalize the plans for the dams.
In addition, the group has immediate cleanup and erosion stabilization costs that add up to about $20 million. It hopes to get grant help with some of those immediate needs.
The state of Michigan earlier this month said it planned to issue Boyce Hydro an emergency order to alter the Tobacco River spillway on the Edenville Dam before the year’s end to stabilize the area around the dam. The state doesn’t expect the company to comply with the order, in which case it would undertake the work itself.
The state said it believes the Tobacco River project may be eligible for grant funding that would cover 75% of construction costs and 7.5% of engineering costs.