Whitmer wanted to cut dam repair program; DNR denied $1.6M for Edenville dam

Beth LeBlanc
The Detroit News

Gov. Gretchen Whitmer last year wanted a 43% cut for a Michigan dam repair and maintenance program, but the Republican-controlled Legislature restored the money in the final budget bill she signed seven months before the Edenville Dam broke due to years of mismanagement. 

When the potential buyers of the dam last year requested $1.6 million from the grant program for proposed work that would likely have begun this summer, Whitmer's Department of Natural Resources denied the request because it did not meet the priorities and criteria of the grant program. 

The remains of the Edenville Dam, as seen on Wednesday, May 20, 2020 in Edenville Township north of Midland. After two days of heavy rain, the Edenville Dam failed and flood waters rushed south, ravaging the landscape in its path.

The dam, which had failed to maintain proper spillway capacity for years, broke May 19 when the Midland area was hit with historic rain and flooding. 

When asked May 21 about additional funding for dams statewide, Whitmer maintained in a press briefing that she’d love to increase funding for dams, but needed the cooperation of the Legislature and federal government to do so.

“I ran on fixing the damn roads, but we all know that it wasn’t just roads. It was dams and roads,” the Democratic governor said. She indicated her 45-cent-a-gallon gas tax increase proposal that would have generated $1.9 billion for state infrastructure such as roads and bridges could have provided additional cash for dams, but “was not embraced with a lot of enthusiasm.”

But increased dam funding wasn't included in Whitmer's first executive budget, which was built around the assumption that the 45-cents-a-gallon gas tax increase would be approved, said James Hohman, director of fiscal policy for the free-market-oriented Mackinac Center for Public Policy in Midland. 

"It just wasn’t a part of her plan," Hohman said. In fact, the budget "included a recommended reduction in the small dam capital improvement fund the state operates.”

For the past five years, Michigan has maintained a $350,000 annual budget for its Dam Safety Unit. The unit falls under the state Department of Environment, Great Lakes and Energy and consists of a supervisor and two employees responsible for 1,059 dams throughout the state. 

The state also has a variety of grant programs through the DNR to help private and public dams finance maintenance, removal and repairs of dams as long as they help improve fishing opportunities and aquatic resources in the area.

But all of that funding falls significantly short of the $227 million investment over 20 years recommended in 2016 by Republican former Gov. Rick Snyder's administration's 21st Century Infrastructure Commission.

Dam funding trends

There is about $1.25 million a year that is appropriated from state Game and Fish Protection Funds, about $225,000 a year to improve habitat through a state settlement fund and the Dam Management Grant program, which lawmakers finance through annual appropriations. 

Michigan has appropriated $350,000 annually to the state DNR’s dam management grant program since 2013, with additional one-time appropriations throughout the years. Public and private dam owners can apply for money and technical assistance to remove, repair and maintain dams when those activities enhance fishing opportunities and aquatic resources in the area.

But in her first budget, Whitmer proposed $200,000, a cut of $150,000 or a more than 40% slash, to the dam management program. 

Gov. Gretchen Whitmer speaks during a news conference regarding the state’s response to the emergency regarding dam conditions and flooding  in Midland and Sanford on Wednesday, May 27, 2020 at Meridian Elementary School in Sanford.

The Democratic governor made the recommendation in light of "anticipated revenue pressures," DNR spokesman Ed Golder said. But Whitmer also wanted to make the cut because the outgoing GOP Snyder administration and Republican-controlled Legislature included an $8 million dam repair appropriation in a controversial $1.3 billion supplemental bill that was passed near the end of the 2018 lame-duck legislative session and before she took office.

Whitmer urged the $150,000 dam repair grant cut in the DNR budget because the $8 million supplemental appropriation was the equivalent of 22 years of annual dam repair funding at current levels, Golder said. Roughly $5 million of the funding was earmarked for dam improvements in Midland and Gladwin counties and deposited in the Four Lakes Task Force account on Sept.19. 

The Republican Legislature and Snyder administration also made one-time funding additions of $2 million in fiscal year 2013 and $3 million in fiscal year 2016. For fiscal year 2019, they added $1.5 million plus the $8 million supplemental.

The House last year accepted Whitmer's recommended $150,000 dam funding reduction and initially decided to eliminate the remaining $200,000 proposed funding level. But the Senate rejected Whitmer’s reduction and the House's funding elimination.

Both chambers eventually adopted the Senate plan and sent Whitmer a DNR budget in September with the full $350,000 in grant funding.

The Legislature's recommendation was signed by Whitmer Sept. 30. And in the fiscal year 2021 budget unveiled earlier this year, Whitmer recommended the full $350,000 for the dam management grant program.

The dam management grant program is not a major contributor of the state money needed to maintain dams — both public and private, Hohman said. 

Sen. Jim Stamas, R-Midland, agreed and noted financing is a big issue for dams across the state, including those in Midland and Gladwin counties, a problem that can't be helped by grant money alone.

In recent months, Stamas had been drafting legislation that would allow for dams to be reimbursed at a higher rate for energy production than what is currently allowed by the Federal Energy Regulatory Commission. It has yet to be introduced.

"The larger issue is how we fund them so they actually can do the upgrades," Stamas said. 

Why Edenville bid was denied

Even with the grant funding available, dam grant projects have been paused because of Whitmer's March 30 executive directive discouraging discretionary spending because of the COVID-19 budget pinch.

Prior to Whitmer's budget freeze, the DNR had roughly $9.1 million available in restricted money among the dam management, aquatic habitat and habitat improvement grant programs, said Joe Nohner, a coordinator for the DNR's Inland Lakes Habitat Analyst & Midwest Glacial Lakes Partnership. 

The governor's directive put all approved projects on immediate hold. Five projects using $3.9 million in grant funding eventually were exempted while four others assigned $5.2 million remained on hold as of Thursday. 

Boyce Hydro Power, owner of the Edenville Dam, had never applied for nor received dam management grant aid, said Chip Kosloski of the DNR's grant management section. 

But Four Lakes Task Force, the group looking to buy the dam, applied in 2019 for $1.6 million in grant money for the Edenville Dam. The request would have taken all of the available grant money in the aquatic habitat and dam management grant programs that year and was one of 42 competitive applications submitted. 

"Based on the criteria/priorities of the grant and the different fund sources, the Edenville dam pre-proposal ... did not compete well enough to make it through the first stage," Kosloski said in an email.