Water History - March 2023
BRIEF HISTORY OF SBHIA
Forrest Rohrbaugh developed our subdivision starting in the 1920’s; but, mostly in the 1950’s. That is why you will find 4 houses which are 1920’s vintage in the neighborhood. He laid out the infrastructure, including the water mains and 2 community wells. During that time, the population was much lower than our current 209 homes. The water mains were put in by the developer and the cost to pay for that infrastructure was factored into the lots and home prices as they were sold. Once the homes began to be built the homeowners association was set up to oversee and maintain the water system, same as it is today. However, at that time no attention was paid to the future of the water system and how it would be replaced as it approached the point of wearing out and having to be replaced. In hindsight, a factor should have been placed into the quarterly dues/water payment to set funding aside for the future of the system. This was not done then or at any time going forward.
Most homes, at that time, did not have multiple bathrooms, dishwashers, in-ground sprinkler systems, pools, etc. The installed water mains are 4” in diameter; with the exception of a 6” main on Somerset. In the 1950’s this was more than sufficient to fulfill the member’s needs. It wasn’t until the late 1960’s that Bloomfield Township connected to the Detroit Water and Sewer Department system. At that time most of the community wells were connected to that system if they choose to at minimal or no cost to the homeowners. SBHIA decided to stay with their own water system, owned and operated by the subdivision owners, at minimal cost to the property owners. Public Act 399 requires all private water systems to be licensed by the State of Michigan and follow all requirements set forth to supply clean/safe drinking water to its residents. SBHIA is licensed and required to follow all regulations pertinent to the operation and distribution of the water to its property owners.
In the 1990’s a bacterial issue was discovered at the Marlborough well site. The State determined at that time that chlorine would be required to be injected into the water at the well heads to provide protection for the water to keep the bacteria from entering the homes connected to the system. Chlorine injection has continued off and on since that time into the 2023 timeframe.
PA 399 requires that the SBHIA water system has a trained and licensed water operator to physically operate the system. This means the operator must provide the required testing and results of our water for chlorine residual, lead and copper, by-products, and further testing on weekly, monthly and annual basis to EGLE. The operator is also required to oversee the chlorine injection and set the limits required. The SBHIA Board has contracted with Douglas Environmental to do the task with the properly licensed individual who works with EGLE. EGLE is the licensing agency that oversees all water systems in the State. The Association is required to have someone check the well sights and the pumps daily. Currently it is a property owner who provides feedback to the operator who is not on sight daily.
FAST FORWARD TO 2023
SBHIA currently services 209 homes with a nearly 100-year-old, and undersized, water main system. Also, you may notice the subdivision fire hydrants painted yellow. EGLE has determined that the fire hydrants are no longer adequate. The Bloomfield Township Fire Departments cannot get the required 1,000 gallons per minute to fight house fires in the subdivision. They utilize a plan of connecting to the Township’s public water system along Woodward, Square Lake or Bloomfield Boulevard by stretching hoses and connecting pumpers to supply adequate water to fight fires in our neighborhood. This process hinders and delays their ability to fight fires. Currently the fire hydrants are utilized to maintain the water system by venting it for repairs and flushing the system in attempts to improve your water quality.
Past and current Boards have several concerns that SBHIA could have a significant failure that could leave us with limited or no water as experienced last May. That event cost over $7000 in repairs and loss of all water to our community.
The time has come that the water system be replaced and upgraded to provide fire suppression and improve the degrading water quality.
DECISIONS TO MAKE
We need to be proactive and set a plan for future remediation of our outdated water infrastructure. Your HOA Board of Directors are open to any, and all, suggestions and options that make sense for the whole of the subdivision. They have done their due diligence of gathering the necessary information for you to make a decision on how we proceed. A decision must be made by a majority of the property owners in the subdivision or EGLE may, on our behalf and at our expense, dictate what to do. This will be a project of several years and must be started by the property owners. Our options are:
Replace the current infrastructure to EGLE standards and operate and maintain it by the property owners.
Connect to the Bloomfield Township water system who will operate and maintain the system.
Do nothing and keep the system as is. This puts us at risk of a system failure at which time EGLE will step in and direct the subdivision as to what they will do. This can include excessive fines in addition to costs of emergency repairs or emergency replacement costs.
Options 1 and 2 needed a preliminary study by an engineering firm. The preliminary studies have been completed by the Association and the Township to replace the system. In order to replace the pipes, valves and hydrants, a detailed engineering plan must be prepared and approved by EGLE before any work can be started. Detailed plans are a requirement once we make a decision on the final direction to replace the system. The plans will not change to any large degree over the years and, once received, we can decide not to proceed at that time. They can always be used in the future, updated, and utilized. The estimated cost is $200,000.00 or approximate cost to EACH property owner of $1,000.00. Again, this is if we decide to go it alone and replace and update the water system and keep control of it. If the decision is to connect to the Township public water system, the Township will pay those cost and collect it through a Special Assessment District (SAD). The cost would be charged to the property owners over a 20-year period. Regardless, of which choice SBHIA (homeowners) decides to select, these Detailed Engineering Plans would remain ours for any future use. The costs to replace the system fall on the property owners no matter which option is chosen. No long-term planning to put funding aside to replace nor maintain the aging system has occurred. All charges to the property owners have been to pay for the daily operation of the system only. No funds have been collected to replace the infrastructure to date. The Association has no assets and cannot borrow funds to do the work of options 1 and 3. Therefore, the cost to pay for the system falls on the property owners.
The Board has appointed a Water Committee who has investigated grants to help fund this project. The Committee has reviewed both public and private grants and will continue to do so. At this time SBHIA does not qualify for public infrastructure funding because the system is private and not publicly owned. They have talked to several private foundations who have listened, but have not given us any positive feedback. As we go forward, we must view this issue as one that will come at each property owners’ expense.
Now that the Study has been completed, SBHIA must decide whether to keep the current system, connect new infrastructure to the wells or connect to the Bloomfield Township system. Although the Board, or future Boards, can elect to replace the current infrastructure on its own they would like to have all members involved. The scope of the project is to replace the current water system with an updated water system that meets current standards of EGLE, the County and Bloomfield Township.
Option 1 - Utilize the current wells if the residents decide they want to continue to own the water system. Utilizing the wells does not have the volume of water for fire protection. The costs to replace the pipes, valves and hydrants of the system, based on current cost, whether done by the Association or the Township, is estimated between $6,000,000.00 and $8,000,000.00. For the 209 properties in SBHIA, estimated cost between $30,000.00 and $40,000/each home. It is important to note, SBHIA does not have the assets to pledge for an Association loan. This cost is based on an estimate provided by Boss Engineering. The Association was asked to, and hired, Boss to provide a preliminary cost to build a water system for the subdivision that would continue to provide adequate water quality and provide the needed fire suppression for our homes. Boss did an estimate to replace all water mains, fire hydrants and valves with new 8-inch materials that meet EGLE requirements. A new well would be added to provide water to a minimum 168,000-gallon above-ground storage facility that would require redundant booster pumps to get the proper pressure and volume to the overall water system. This option will provide the necessary 1,000 gallons per minute required by the fire apparatus. The estimated costs, without testing for adequate aquifer and soils to bed the mains is between $6,000,000 and $7,000,000 ($35,000/home, an average of $3,000/year). This estimate also had very low contingencies for the project to cover any unforeseen issues that may arise during construction. This project can take many years to get started as the funding has to be secured from homeowners before starting. Once funding is in place the construction can be completed over two construction seasons.
POSITIVE – Boss provides a solid plan. It will meet all the requirements of providing fire suppression to our homes and an adequate supply of water into the future. The homeowners will still own the system and it will remain private for them to make decisions going orward.
NEGATIVES – The homeowners will still own the system and it will remain private. By owning the system there will be significant added cost for the maintenance of the additional well, storage (large above-ground holding) tanks of 200,000 gallons in size, booster pumps and other equipment that make this system work properly. This means a large increase in the cost to supply water from the well system. The preliminary estimates, without the added maintenance costs, indicate the costs to use and maintain more than connecting to the Township. Because the Association has no assets the homeowners will have to provide the funding for this project up front, before the project can be started. This may require some to take an equity loan on your home and giving $35,000.00 to be placed in an Association bank account to pay for the project over the next few years. If there are over runs the Association will have to come back to the property owner for additional funds. This also means everyone is required to pay. If a homeowner fails to pay, other owners would have to come up with additional funding for the project, and or would delay until all 209 homeowners pay. This project could be phased over 5 to 10 years, if allowed by EGLE and the Township. There will be construction each year disrupting the subdivision and each homeowner would have to come up with funding each year. This would be more costly to each property owner, disrupt the subdivision for many years into the future and take years before fire suppression would get to all homes. Boss Engineering did not support this idea and neither did the Committee. Water quality would not improve with this proposal. Our current water has iron, calcium, and arsenic in it. In review of our required Consumer Confidence Reports, the levels of these items in our water are increasing. These levels need to be addressed to keep the system in compliance with the ever-increasing water quality standards.
Option 2 - Connecting to the Bloomfield Township public water system is similar to the Boss Engineering proposal. The Township asked Hubbell, Roth & Clark (HRC) Engineering to prepare a preliminary cost estimate to replace the water system in SBHIA and connect it to the Township system. It would replace all water mains, fire hydrants, valves, and service line connections to the property lines. HRC estimated the costs to complete this work between $7,000,000 - $8,000,000.00 (approx. $40,000.00/homeowner). This estimate provides a percentage for future cost increases and accounted for the as many unknown expenses once construction begins (that Boss did not include). Without any unforeseen costs, the overall figure could be decreased by over $1 million dollars. The actual cost of construction is the same as Boss once the other items are removed. This work will meet all EGLE requirements, guarantee the volume and pressures for fire suppression and meet the highest water quality standards now and into the future. Connecting to the Bloomfield Township public water system will require that a Special Assessment District (SAD) be created to fund the project by the Township. However, before getting to the point of developing the SAD documents, the Township wants a petition, called an Expression of Interest, that provides intent that SBHIA is interested in doing a SAD. The document is prepared by the Township and circulated by members of the Association for signatures. The actual SAD documents are then developed specifically for the SBHIA Committee by the Township to take to the property owners, with the accurate costs, for the final signatures, or votes, by each property owner. Each name on the property deed must sign and indicates a yes vote. No signature of one or more of the owners indicates a No Vote. If the SAD receives a verified 51% of the property owners and 51% of the land mass it moves on to the Township Board of Trustees. There will be several public hearings where all sides of the project are heard. The Township Board of Trustees would have to approve the SAD before bidding the project. The project is then bid and sent back to the Board for a final public hearing and approval. Funding for the project is secured by the Township through a bond for the project. The property owners are then invoiced on their winter tax bill once each year over a 20-year period plus interest, the interest of the bond plus 1%, or an approximate average of $3,200/year. The principal remains constant at $2,000/year and the interest goes down as the principal is reduced. The project begins once all documents are in place and funding is secured. This SAD process can take 3 to 4 years depending on when the process starts. Construction will take 2 construction seasons to complete. Once completed the properties are required to connect to the public system owned and operated by the Township. The SAD is not tax deductible. The SAD can stay with the property when the property sells, depending on the buyer/seller agreement. The Township does all work on the project. They provide the funding, bid the project, inspect the project, obtain all permits and make certain all insurances are in place, as well as maintaining the infrastructure into the future. A portion of the Township water rate is set aside for funding to replace water mains in the future as well as maintaining the system and meeting all regulations now and into the future. This is all part of the water rate. More details on the SAD process can be reviewed at the Township website, https://bloomfieldtwp.org/Services/EES-Department/Special-Assessment-Districts-(SAD).aspx.
POSITIVES – HRC provides a solid plan. The Township would own the system, its maintenance, reporting, regulation requirements, fire suppression and overall funding for replacement in the future. The costs to do this project as a private system or a public system are very similar to construct. The public system will have no maintenance costs to the subdivision other than the quarterly township water rates. It is estimated that the quarterly rates paid to the Township will be less or up to 10% more than what is currently being paid in your dues based on your metered usage. The property owner does not have to secure the full funding for their portion of the project up front to pay for the project. The Township does the funding and proportions it back over the next 20-years. The Township is responsible to insure all property owners pay equally.
NEGATIVES – The Property owners no longer own the system or control of the costs of water. There is a $2,000.00 cost to become a customer of the public system for the house connection. Each property owner will be responsible for the cost to hook up to the water system once it is complete. Each property owner will be required to connect to the new system before the wells are shut-down and capped.
Option 3 - The last, and not recommended, option is to maintain the system that is old and failing. The costs are very low currently, but the risk of a significant failure is high. This could leave us in a no-water situation. Our water system is adequate for the short term but not for the long term. This is kicking the can down the road yet again as costs continue to rise. The system will eventually fail and EGLE will take control away from SBHIA and direct what is to be done without input from the property owners, at the owners cost. This could take 5 to 20 years. The water system has low pressure and volume, which helps to eliminate or hide leaks and reduce water breaks. This has helped with the longevity of older pipes. However, it also impedes fire suppression and protection. This is a risk and reward situation. When the system does fail the property owners that are here will be the ones to pay the bill. It will only get more costly. The cost of water/dues is being reviewed closely so the Association can begin putting funds away to help reduce the costs of replacing the system in the near future. To do this will require a significant increase in dues to continue supplying the same water with no fire suppression until funding is available to correct those issues. A catastrophic failure of the system would place the water system in the hands of EGLE. In the short term the Township can provide water by connecting hoses from one of their fire hydrants to one of the Association fire hydrants. This would provide adequate water to each home for the short term. However, EGLE will require a permanent solution and instruct the Association and the Township on what has to happen. The Association will no longer have a say in what to do.
We have also discussed each property putting in their own well and placing all costs on the property. Currently there does not appear to be enough water in the aquifer to support 209 wells in this area. Oakland County Health Department would be the controlling agency for this type of a well system.
We have been in contact with the State, Township and the County, as well as private Foundations, seeking funding for planning, engineering and construction. Because this is a privately owned water system government funding is not available. Contact was made with the Legislative Director for the Michigan Municipal League (MML) about the issue of funding private community systems. He informed us that there is currently proposed legislation to grant funding to private systems that have no assets. It would be to help provide plans to provide safe, high quality water for the residents of the state. To date this legislation has not moved. One of the biggest issues is that the private well systems in the State did not fund for the replacement of the water systems as was a responsible thing to do.
Once a new infrastructure is in place, the SBHIA dues would be increased if we decide to keep the wells or decrease drastically if we connect to the Township, depending on the option chosen. If SBHIA connects to Bloomfield Township’s system, your water bills could decrease or increase slightly from what your dues are now. This is based on comparing the usage of a current member’s yearly quarterly metered sewer charge along with the current $440 yearly dues. Most, if not all homes that currently do not have a water meter, would most likely see their quarterly bills reduced. Homes would no longer need a Water Softener or filter and appliances would have a longer useful life.
Finally, the Board realizes this is a major expense and a daunting task. Connecting to the Bloomfield Township system has been the subject of many discussions over several years. However, according to our Bylaws, our duty is to “maintain the wells and equipment”. As the wells have been upgraded and maintained, the infrastructure continues to age. Replacing the mains would provide us with an updated water system which would serve us for years to come.
Again, the cost to replace the system is the same whether the project is done by SBHIA or the Township. If we want to continue owning the system SBHIA has to collect the funding before the project begins from the property owners. Each property owner would decide how they wanted to pay for it (cash, mortgage, etc.). If we elect to no longer own the system, the Township would bond the project and spread the costs over 20 years to be paid by the property owners through a SAD.
This is the reality of the situation. None of us like this; but we all know something must be done to avert a catastrophe.