Friday, November 4, 2011

Southern Unbuildable Lots Update

On Monday of next week the Village will be sending out the following update to all property owners in Lake Isabella South and Lake Isabella Golf Estates II.

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Dear Property Owners:


The Village would like to update you with respect to our efforts in addressing the unbuildable lots in southern Lake Isabella. As you may know, the Village has been working on this issue since 2008. The issue itself actually dates back to when this area was originally platted in the early 1970s. In both Lake Isabella South and Lake Isabella Golf Estates II there are plat-wide restrictions on the number of well and septic permits that may be issued.

The fact that the restrictions are plat-wide is important as it guides how the Village is required to address the problem. Our partners at the Michigan Department of Environmental Quality and Central Michigan District Health Department are required to only consider solutions which benefit the entire plat. To that end, the Village has been forced to look at solutions to make the entire area buildable, not just certain areas where on-site systems may be suitable. The purpose of this is to ensure that all property owners are treated fairly and all have an equitable solution to the present problem.

Beginning in 2008 the Village began working on finding ways to lift the restrictions. We began by conducting a series of tests to determine what the geotechnical conditions were in this area of the Village. What those test found were widespread areas in both plats where on-site well and septic systems would not be possible due to the environmental conditions and sizes of the lots. These conditions were related to the soils that were found and the water table depth.

Once it was determined that the environmental conditions did not support lifting the restrictions and allowing on-site systems plat-wide, the Village’s focus turned towards other means of resolving the problem. It quickly became clear to us that the only viable option would be some type of sewer system.

Since then the Village has worked with 2 different engineering firms to fine tune the parameters of proposing the most cost effective solution to you. The course that we have taken is toward a STEP system which would use the lagoon property owned by the Village as a treatment site. This type of system is greatly different than a traditional gravity sewer system.

Gravity sewer systems are the most common sewer system in the mid-Michigan area. They can be very costly to install and maintain. Often times these systems require various lift stations or partial force mains to get the wastewater to the treatment site. Pipe sizes are usually fairly large and require extensive excavation to install. A STEP system on the other hand does not require extensive excavation and is less costly to install and maintain.

With a STEP system each individual lot would still be serviced by an on-site septic tank for solid waste materials. Each tank would be connected to a small force main that would take the wastewater from the site to the treatment location. STEP systems also provide greater environmental protection as they are prone to less seepage into and out of the system. More details about the systems being considered by the Village can be found on our website.

Once a direction was established on what we wanted to propose was established, the Village moved on to the most critical part—finding funding for the that proposal. There are really only three options in terms of funding options for a project of this size. Those are commercial lenders, the State of Michigan, or the USDA.

In working with our Bond Counsel, it was determined that in light of the current economy commercial lending was not a feasible route to consider. With that in mind we have explored funding programs at both the state and federal level. Of those two options, it is the USDA that gives the Village the best chance of being funded. It also is the option that has the lowest interest rate and longest term available. In our opinion this makes it the most feasible option to pursue for both the Village and individual property owners. It is our desire to find a solution that has the lowest overall cost in both the long-term and short-term; we believe that this is possible with the USDA.

Earlier this year we submitted an application to the USDA to determine our funding eligibility. Based on the scope of our project and our community demographics; the USDA determined that the project is eligible for funding, but only low interest loans. As the Village has worked with the USDA several conditions have arisen which have slowed our progress. These conditions center around the funding requirements of the USDA being based on the conditions normally found with gravity sewer systems. When those conditions are applied to STEP systems they result in requirements that we feel are unrealistic and reflect an outdated set of rules being used by the USDA.

As such we are presently working on trying to persuade the USDA to amend their funding rules to reflect newer and better methods which we feel are found in STEP systems. This has caused us to delay further work on the project. Our plan now is to meet with the state director of the USDA and discuss their funding rules and make a pitch that they be amended to allow greater flexibility for STEP systems.

We are presently working to arrange this meeting. If we are unsuccessful in our efforts with the USDA, we will need to revisit the funding options and cannot guarantee that one will be quickly found based on the current condition of the economy. We appreciate your support in this project and look forward to moving forward with a viable proposal for you and the other property owners to consider.

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