MENOMINEE — The Water and Wastewater Utility Board discussed possible funding options for the utility and road project Thursday.

City Manager Tony Graff said the City of Menominee currently wants to fund the road portion of the project separately from the utility portion. “Revenue then comes out of the general fund for the roads,” he said.

Having asked the U.S. Department of Agriculture (USDA), Graff said the response from them was that it is possible to split the funding. The road portion would go through the USDA’s Rural Development Community Facilities Program and be funded with General Obligation bonds, which are 20-year bonds. However, this would mean slightly higher interest rates. “The water and sewer rate is set at 1.625%. Under Community Facilities, a 20-year bond, it’s 2.75%, but we’re looking at possibly $300,000 for this,” he said.

Graff said he and Jeff Sjoquist of Coleman Engineering, the company in charge of the project, had also contacted Steve Frank, a lawyer for Miller Canfield in Detroit, and discussed other possible options for funding the roads apart from the USDA if for some reason the city doesn’t qualify. “There’s an old financing method through the Michigan Transportation Fund (MTF), which not too many municipalities use anymore, but it sort of fits. The only thing we’re concerned about with going through the MTF is Davis-Bacon wages would be required. Put that onto a small project, and you could really add to the cost,” Graff said.

Another option was through an alternative revenue bond. Graff said this kind of bond has a 45-day window referred to as a “backdoor referendum.” He said when the ordinance is passed, residents have 45 days to petition the city government to have it put on the ballot if they want a referendum on it. “If it was a highly contested kind of project, usually an environmental one, the public usually says no to that. I don’t think this would be a problem,” he said.

Graff said the recommended option was to go through the USDA. “Miller Canfield did look over our audit; we’re all qualified and we have the bond authority to be able to do this,” Graff said.

The board voted to recommend financing the road construction portion of the project through the USDA to the Finance Committee, which meets Tuesday.