Clarification on the Funding Plan
The $200 million state grant has been a very significant inflection point for how the Four Lakes Special Assessment District will be managed as well as the Four Lakes restoration project going forward. We have received questions related to the new assessment model since the amount of the Capital Assessment is now common for all lake property owners, similar to the Operations Assessment.
Well over a year ago, with no significant government funding in the forecast, FLTF was able to qualify for a United States Department of Agriculture (USDA) loan, creating a financial model where the properties of each lake would be assessed separately for the construction restoration costs of their dam. This was due to the capacity limitation of the USDA funding program in any one year and if the project could be financed as one project. USDA requirements needed to have all four dams' engineering completed prior to funding all four dams, which would have delayed Secord and Smallwood dams’ schedules.
In December of 2021, FLTF set the following priorities, as there became a possibility of a significant State of Michigan grant of over $100 million, which occurred with the $200 million appropriation that was approved on March 30, 2022.
FINANCING AND MANAGING AS ONE SYSTEM IS LOWER COST TO THE PROPERTY OWNER THAN LAKE-BY-LAKE FINANCING WITHOUT THE STATE GRANT
By managing and financing as one project with a common assessment for all the SAD, EVERY PROPERTY OWNER IN THE FOUR LAKES SPECIAL ASSESSMENT DISTRICT WILL HAVE A LOWER COST than if the repairs and restorations were funded with lake-by-lake financing without state grants.
Capital Assessment Timing Is Over 2 Years Away
To reiterate what was discussed at last week's webinar: if additional funding is needed beyond the $200 million State grant, it will not be until towards the end of all the Four Lakes Restoration projects, and a Capital Assessment would occur in 2024/2025. This has uncertainty in the numbers. But we will stay focused on project cost management, and these numbers do not include any future grants.
These lakes would never have been restored had the counties chosen not to rescue them from their owner and worked with the Four Lakes Task Force to recover and restore these dams. It’s important to understand the dams are owned by the counties, and the state grants were to lower the burden on all the lake communities to make it affordable. The methodology is intended to give each of the Four Lakes properties in the Four Lakes Special Assessment District an equivalent assessment allocation of cost based on the properties’ equivalent benefits. This is created by two simple facts: the county acquired the lakes, and the state has funded 80% of their restoration.
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