Dam fixes could cost Wixom, Sanford lakes residents over $1,000 annually

Beth LeBlanc
The Detroit News

Property owners around the four Midland-area dams affected by a May flood after two failed could pay as much as $92,940 individually to fix the dams and restore the manmade lakes that have been drained for four months.

The annual assessments estimated for property owners along Secord, Smallwood, Edenville and Sanford dams range between $237 and $3,098 over 30-40 years, with the cost varying depending on where a home is located, the duration of the loan and the final costs of repairs.

Consultants hired by Four Lakes Task Force 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 task force is able to obtain for the project.

The $338 million would restore the dams to working, safe conditions and refill the lakes to court-ordered levels.

A nearly barren Wixom Lake stands dry after severe flooding forced the failure of Edenville Dam on Wednesday, May 20, 2020 in Edenville Township north of Midland, Mich.

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.

Several of the details of the plan and the cost itself will be cemented in the coming months and final engineering reports are drawn up regarding repairs.

The damage to the dams and draining of some impoundments occurred during historic rains in May that breached the Edenville Dam on 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.

Smallwood and Secord dams didn't sustain major damage but were required to drain their lakes after the flood, and the dams have historical repairs that still need to be completed.

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 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. There are roughly 7,300 front and back lots among which the assessment will be divided.

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 react

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. 

The new assessment estimates were welcome news for Chris Ringo, a Secord Lake resident and member of the Secord Lake Preservation Association who had pushed back against an initial plan to divvy the cost equally among property owners instead of a formula based on cost per lake. 

"Because we don’t have any damage related to the flood event, we became very concerned that that would not be equitable," Ringo said. 

The repairs needed to fix concrete deterioration at the Secord Lake dam have been needed for about four years, he said. 

"That is nothing new, but it is a requirement by (the Federal Energy Regulatory Commission) that it is taken care of in order for us to restore our lake," Ringo said.

Larry Woodard was shocked when he heard the figures for Wixom Lake residents, but said he also was expecting an increase of some sort.

"It's way more than what we expected before the dam breach," said Woodard, who is the president of the Wixom Lake Association. "We were talking $350 a year and now we're up into the $2,000 (range), and that's if they can get a 40-year deal for it.”

Woodard said he doesn't expect to sell his home, where flood damage was still being repaired Thursday, but he said the cost may be more than some are able to afford.

"With the assessment and estimated time it will take to restore the lakes, I think some people will dump," he said. 

Marc Snyder was hopeful part of the costs on Sanford Lake would be offset by grants, lawsuit settlements or property tax relief. 

"I don’t expect it to come down $1,600 or $3,000 a year, but every little bit will help," said Snyder, who is on the board for the Sanford Lake Association.

"I don’t think anyone would say they like that figure," he said. "But I don’t think anyone would say they like living on Sanford River.”

Other repair costs involved

Apart from the 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 will be eligible for grant funding that would cover 75% of construction costs and 7.5% of engineering costs.