Examining the Gogebic Range Water Authority
"The Gogebic Range Water Authority is one of the best kept secrets in Gogebic County."
RAMSAY, MI - Saturday, September 19, 2009 - For years we’ve heard debate and read in the paper about the Gogebic Range Water Authority (GRWA). Recently the Authority’s been in the news again. The general contractor for the Ironwood Township GRWA project, Snow Country Contracting, stopped working on Lake Road because they unearthed what could become a major problem with Ironwood’s 16" water main.
What exactly is the Gogebic Range Water Authority? What does it do? Who belongs? Why hasn’t the City of Ironwood joined? Should they consider joining the Authority now? Hopefully we can answer some of these questions here.
On Wednesday, I met with GRWA Administrator Jean Verbos and Ironwood Township Supervisor Kim Mattson. I wanted to get a little background on the GRWA, and I wanted to see what the Authority planned for the future.
"We were organized originally because Bessemer Township had their own little treatment plant down here on 4th Street," Verbos said, "They took water out of the river and treated it and distributed it to the residents in Ramsay."
"As time passed, and rules and laws changed, that plant became obsolete. In the mid-70's the DEQ or the powers to be at that time said you need to either upgrade it or replace it. I think they were smart enough to see, at that point, that the City of Wakefield, sitting to the east, had a beautiful water supply with plenty of water – enough to sell to everybody. For two governments to work together, however, they had to form an authority."
The Gogebic Range Water Authority was formed on December 1, 1977, as a municipal authority under the provisions of Act 233 of Public Acts of Michigan, 1955, as amended.
"They did some piping work and some pump work which is on Mikado Road and Sanders Road and they brought water from the City of Wakefield into Ramsay, Indianhead, and Blackjack ski hills. That was the very first part of what the water authority was formed to do." Through this partnership, the Chicago Mine wells, owned by the City of Wakefield were developed as the water source and 26,000 feet of 10" and 16" water transmission mains were constructed.
The municipalities creating the GRWA were the Townships of Bessemer and Wakefield, the Cities of Wakefield and Bessemer. The Charter Township of Ironwood joined as a voting member in January of 2002.
"That’s when they first started having water problems with the City of Ironwood and needed some infrastructure work done. It took us almost five years to get them onboard as a member because we had to rewrite our articles of incorporation. Of course, at that time, we had a new vision and a new focus so we were going to rewrite it to address that new vision and focus of this regional water system."
With the two cities and the two townships successfully working together to solve mutual water source and distribution problems, the idea of a regional water system was born. The regional approach to addressing water system deficiencies with member communities sharing source and transmission facilities along with mutual support for emergency water supply, in the event of a water source failure or contamination, and improved fire protection due to the interconnection of systems is a benefit to the communities served by the GRWA.
Today, the GRWA operates with and eleven member board, two members appointed by each member municipality and a general at-large member appointed by the GRWA Board. Day-to-day operations of the Authority are the responsibility of an administrator hired by the board.
In 1997, the GRWA hired an engineering firm, now known as Wilcox Professional Services, to begin a study to address Michigan Department of Environmental Quality (MDEQ) concerns that several areas of the existing and future GRWA water supply and transmission did not meet minimum requirements of the Michigan Safe Drinking Water Act. These concerns were:
Weak distribution and transmission in the City of Wakefield.
Single source to distribution in the City of Wakefield.
City of Wakefield pumping equipment and structure in need of replacement.
City of Bessemer well fields lack surface water entry protection.
City of Bessemer well fields lack isolation zones.
City of Bessemer’s Cox’s well field reservoir subject to flooding.
City of Bessemer source equipment and structure deficiencies.
Bessemer Township Equipment and mains serving Grand View Hospital need replacement.
Bessemer Township’s Puritan Location water mains need replacement.
Bessemer Township’s Ramsay/Anvil booster station and tank needs replacement.
Several blocks of water main in Ramsay need replacement.
When this study was completed the cost of the improvements totaled $12,000,000. The GRWA applied to the United States Department of Agriculture (USDA) Rural Development for funding and found that the cost was too great for the funding agency to handle as one project. The project was broken down into two phases. Phase I costing $6,005,000 and Phase II $5,250,000.
The Phase I (2000) - The funding package consisted of a $3,172,000 grant and a $2,883,000 loan. The Phase I project was substantially completed by general contractor, Snow Country Contracting in December of 2002.
The Phase II (2003) - The project was funded by a USDA grant of $2,961,000, an EDA grant of $850,000 and a USDA loan of $1,339,000. The Phase II project was amended to include a $319,251 loan to Ironwood Township for emergency replacement of the failed Jackson Road water main.
The Phase III (2008-2009) - The GRWA has been working with Ironwood Township on a Phase III project to replace their failing distribution system and to develop a water source and treatment facility to serve the growing needs of their community.
Water Storage Tank (2008) - This $837,000 project was funding with a USDA loan of $652,000 a USDA grant of $150,000 and $35,000 and contribution of the land for the tank site from the Grand View Hospital.
The Phase III system when connected to the Phase II system, which ends at the Grand View Hospital, will complete the regional system as currently described. Through these interconnections, the GRWA will have water sources from the City of Wakefield on the eastern end, City of Bessemer in the center and Ironwood Township on the western end of the system. Each source will be able to support the member communities in case of emergency, for fire protection and to support growth development as it occurs.
The Ironwood Township Project will cost approximately $19,968,000. $11,339,000 will be through USDA loans and $8,629,000 will be through grants and other contributions. The Township project will have constructed 10 Miles of 16" water main; 6.5 miles of 12" water main; 5.6 miles of 8" and 10" water main; two wells; a treatment plant; two booster stations; and a 250,000 gallon water storage tank.
A water booster station will be located on Highway U.S. 2 near Powermill Creak. This project will replace old, leaking water mains in the public water supply areas of Ironwood Township and connect a portion of the Ironwood Township customers to the GRWA regional system. The projected costs for 2009 alone total $5,030,000 – $2,780,000 through USDA loan and $2,250,000 through USDA grant.
Two Future projects are being planned to complete the GRWA regional water system. Project 2B will construct, in Ironwood Township, a water source and treatment plant and the final project will replace all remaining water distribution and transmission lines which will remove the remaining Ironwood Township water customers from the City of Ironwood water system. The GRWA regional water system will have three sources of water all connected and designed to serve as back-up sources for each other. The three sources are: the City of Wakefield’s Chicago Mine wells on the east; the City of Bessemer’s Stone Road well field in the center; and the Ironwood Township’s north Lake Road wells on the west. The GRWA regional water system, when completed will be a modern, efficient, system with greatly enhanced fire protection and excellent water quality.
Phase IV and Phase V - Anvil/Indianhead (2008) - This $15,650,000 project was partially funded though a USDA loan of $1,550,000 and a USDA grant of $150,000. Previously, the Anvil Location area has experienced numerous line failures on a system built in the in the mid 1950's by the mining companies. Wakefield Township petitioned the GRWA Board to assist them in replacing the water system serving the Indianhead Mountain Ski Resort.
Other projects included:
Comet/Jackson (2005) - Financed through a USDA loan totaled $726,000.
Oak Lane (2005) - A $300,000 project funded through a Federal Emergency Water Assistance Grant obtained through the USDA.
Wal-Mart Water Main (2007) - This project cost $220,000 and was paid for by Wal-Mart.
Ironwood’s Losing Two of Their Most Valuable Water Customers
For years, the City of Ironwood has been supplying Ironwood Township and the City of Hurley with water at a bulk rate. Both the Township and Hurley then sold the water to their customers at a small profit. Hurley is in the process of creating their own stand-alone water system, and the Township will soon be entirely serviced by the GRWA. Once both of these bulk customers leave the Ironwood system, the City of Ironwood will lose two big sources of revenue that currently help to keep Ironwood’s water system operating. Without anything to replace this revenue stream, existing Ironwood water customers will have no choice but to pay much higher water bills. Last year the Township paid the City over $350,000 for water service.
Although the City of Ironwood made it very clear to Ironwood Township that they didn’t want to continue to supply them with water, the GRWA was forced to sue the City because the City tried to put a stop to the Township project. Obviously the GRWA won the case and project, up until last week, was moving along quite nicely.
Problems on Lake Road
Then Snow Country discovered the condition of Ironwood’s water main. The 16" main that supplies most of the water to the City is over 80 years old and, according to the contractor, it needs to be replaced. This is the exact same pipe that failed this winter, leaving the City without water for days.
The GRWA, feeling that it would be foolish to cover-up and pave over a pipe that is ready to fail, and sick of waiting for the City to make a decision – decided to lay a replacement line next to the City’s existing water main. At last night’s special City Commission meeting, it became apparent that the City is in no hurry to make a decision regarding the main.
"We don’t hesitate on our projects – we move!" Verbos said, "So we can only give the City so much time to respond."
Ironwood’s Back-Up Water Source
For years, the Michigan Department of Environmental Quality (DEQ) has insisted that the City place a back-up line to their system due to the questionable shape and age of the existing water main.
I asked if Ironwood had a back-up water system. Verbos said, "As far as I know, the City of Ironwood doesn’t have a back-up water system. It’s not a legal requirement, but I really don’t know how to answer that, because the DEQ always insists that we have redundancy as an option. Perhaps the DEQ is requesting that they have one because that line is in such bad shape. And if it does go down, as it happened last spring -- we don’t know what the cause of that pipe failure was -- but it was a major catastrophe for the City."
I asked Verbos if tapping into the Township’s 16" water main would provide enough water for the City of Ironwood in an emergency. "If we go back and pull the studies that we’ve done from the mid-90's forward, regarding the starting of these projects in Ironwood Township, we have always included a City of Ironwood component in those projects. But we haven’t gotten any agreement or have never been able to come to an agreement that they would participate."
"Originally we were going to put one brand new 16" main down Lake Road – actually we were going to put a 12", because that’s all that Ironwood Township needs for their service. And we wanted the City to pay to increase it to 16", plus the cost of engineering and any related fees."
Does Ironwood Want to Join the GRWA?
I asked if the City of Ironwood expressed any interest in joining the Authority? Kim Mattson answered, "From just talking to Bob (Tervonen) and Scott (Erickson), it didn’t seem out of the possibility. But, they did question, ‘Why does everybody get two members on the Board?’ Every other municipality – no matter what the population, the number of utility customers – everybody has two representatives. That’s it!"
"But the City wants more than two representatives?" I asked.
Verbos said she told Tervonen and Erickson, "You really need to attend some of our Water Authority meetings to see how this Board operates. I have been involved in water and sewer for almost twenty years. This is the most phenomenal board I have ever worked with. I’ve been on the Bessemer Area Sewer Authority Board and a lot of other boards. We have two cities and three townships in the membership. And the political hacks are left in the hallway. They come in here and act as a unit."
An Informed Public Leads to a Successful Authority
"The more informed the public is, the more support you’re going to have. The better you inform them, the better they understand what you’re doing and all this mistrust and bickering goes away."
"We’ve had so much success with our projects," Verbos said, "Because we keep the public informed. Now, we’ve had one public meeting in Ironwood Township. Unfortunately, it was short notice. We had one day’s notice for the meeting. Because of that we didn’t have a huge turn-out. What we do is, the contractor was there; the engineer was there; myself; Kim; our Chairman – Walt Rickard is the Chairman of our Board. He was the Principal of the Bessemer High School for many, many years. He’s retired. He’s a phenomenal person."
"We had this meeting to inform the people that we’re going to be in their area. We’re going to make one heck of a mess! It’s going to be dusty and noisy! But we’re going to try and make it as easy on them as we can."
"Whatever your needs are, you let us know!" she said she told the audience, "If you have a handicapped person there that needs to get a van in an out, we’ll drive your van our we’ll carry the person. We’ll take your groceries for you. We’re going to do everything we can do for you that we can do!"
Another such meeting will be held on Wednesday, September 23, 2009, at 6:00 at the Ironwood Township Hall.
"Now people actually see them, they’re out there. There’s progress in the making! When they’re all done, they’re going to have a beautiful new road, curb, gutter and, hopefully, a walking trail on Lake Road and Jackson Road. They will also have a nice new water main; good, clean water; and better fire protection."
"We want the people to understand why they’re living through all these inconveniences."
"Our meetings are always open to the public. I put them in the paper – in the Calendar. We’re starting to get a little more interest. We would sit here sometimes for months and there wouldn’t be anybody in our audience. We had seven people, plus our own people. We typically have attorneys; engineers; contractors; and other people that are working with the Board. But, we had seven other citizens here – asking excellent questions."
"We have a lot of discussion at our board meetings – never any bickering. Never! I’ve been involved with this Board since – I think I was put on the Board in ‘91 and involved with it since 1990, and I’ve never heard any bickering. Some one might say, ‘Well, I have a question, but it might be dumb!’ No! If you have a concern get it out on the table. I’ve never heard anybody be critical of anything at our meetings."
Does the GRWA Want Ironwood to Join?
"I tried to explain to Scott (Erickson) how the Water Authority Board works and what would happen if they voted to accept the City of Ironwood as members. The City can petition to become a member, but that does not mean that the Board will accept them. Then again, they might because we have a welcome mat that is always out and the door is always open."
"It would be very prudent for the City of Ironwood to turn their well-fields over to us. We have funding right now – we have $5.6 million that we could use to upgrade those fields; add treatment; and install the rest of the water main." Verbos explained that the existing water main goes from Slade Road across country. She said the GRWA prefers to have all of their lines on road right-of-ways and along the sides of roads so they are easy to access in case of a problem.
There are several stumbling blocks that appear to be preventing the City of Ironwood from joining the Authority. First, and foremost is the representation issue. The City of Ironwood feels they deserve more votes than any other member because Ironwood has the most water customers. Verbos explained to Ironwood’s City Manager and Utilities Manager that every member gets two votes no matter what their population or how many customers they have. (To put it plainly, Ironwood wants to have a House of Representatives and the GRWA is a Senate.)
Other issues such as billing; loss of control; rate issues; the fiscal stability of the Authority; and the possible loss of management positions play into the City’s decision to "go it alone."
Verbos explained that the entire point of having an Authority – is to consolidate efforts and services to cut costs and save money.
"Every single month, I give my Board a complete financial accounting of what’s happening with their Water Authority. We’re extremely financially sound!" Verbos added.
Kim Mattson pointed out, "We would not be getting all of the USDA funding if we weren’t."
Funding Agents Favor Consolidated Efforts
Verbos explained that Dwayne Reed, the USDA Rural Development Loan Officer in Gladstone said, "We prioritize funding Authorities because of their consolidation effort saves everybody that they are serving a lot of money."
"He said it’s one application serving five communities. It’s one administrator administrating for five communities. It’s us doing one loan to serve five communities. He said, ‘So we really love to fund Authorities!’"
Checks and Balances
"We have double oversight with the GRWA. When we build something – right now everything we’re building is right in Ironwood Township – Phase I was the City of Bessemer and Bessemer Township. Rural Development – they’re the bank, they’re holding the mortgage – requires that the GRWA owns and operates the facilities that they’re paying for. So we own the well-field on Stone Road and the well – the treatment plant. It’s the City of Bessemer’s mainly, so we have inter-governmental agreements. The agreement with the City of Bessemer is to operate that system. They must provide a licensed operator with the skill to operate that plant. The must operate it according to the published operations manuals."
"We, as an oversight, can go in there at any time and check out the operations we do once a year. We have the engineers go in to make sure the City of Bessemer is running it prudently – taking good care of it – that everything is operating the way it should. Part of that agreement is, if they don’t, then we’ll hire someone that will and we’ll charge it back to the city. So it’s like a double oversight which the USDA really likes. Now, we’ve never had to do this, because the City of Bessemer are very responsible people. They have real good, well-trained people. So they take good care of things"
"It’s a double oversight. It’s not just the oversight of their Commission and their City Manager, it’s also the GRWA. The City of Wakefield is the same thing. We have very little over there. We own nothing over there except Comet Location Road. The money we that we spent in Wakefield, we pay to them as a ‘tap fee’ because it was way back when we were using their system as our only source of water."
"There’s a lot of this double oversight going on, and that keeps everybody on their toes. And the government loves it. We’re very frugal. We don’t want to spend a dime that we don’t get fifty cents back for. But we’re not afraid to spend that dime either! My job is to watch this money. USDA is always teasing me that I know how to play those books so I get maximum dollars from them."
"We have a lot of money. We put it into funds called ‘restricted’ because under the new financing scenarios if you keep it in your general operating account, they want you to pay a local share. I never have a local share, but we have half a million dollars in the bank. We run like a finely tuned fiddle."
Employee Relations and System Efficiency
"We’re working now with Ironwood Township. Their operator, Mike Bastman, is excellent. He’s licensed. Anytime, whether it’s their system or not, we hold a training session. Like when we put the storage online, the vendors that put in the mechanical parts of the system – the computers, the pumps etc. – will come up and train our operators how to use it. We call Mike in to do the training. It might not be part of his system, but we never know when we’re going to have to call Mike in to assist us. So we cross-train everybody and they’re all union. We have no problem with our union or our contracts."
"We don’t have a lot of employees – we have six for the Water Authority. We run a huge system with these six people. We do it well, and we keep it running. Our workers are very, very dedicated. They all have cell phones. If we need them, if I need somebody at 7:00 at night or 7:00 in the morning, or three o’clock in the morning; the cell phone is answered when I call and they’re up and moving – no questions asked. But, we also reward them with decent wages and good benefit packages."
"We wouldn’t be able to run a system of this size with so few people if it weren’t for automation and the new infrastructure in place. We have what they call a ‘phone dialer’ at every station. If there’s a problem or a failure, the ‘phone dialer’ will call somebody and let them know there is either a power outage; a pump failure; or other problem. A code is entered over the phone that to tell the computer that somebody has responded. If the problem continues, fifteen minutes later, it calls a second time. The second time it calls another code is entered that tells the computer to fix itself. If it calls back a third time, that means there’s a problem that can’t be fixed over the phone, and we have to call out a crew."
Is It Feasible for Ironwood to Join the GRWA?
"I said it front of the Mayor and the City Manager and I said it again today... History shows that nobody’s ever been able to work with the City of Ironwood. We need to put that all behind us! Everyone needs to work together! These economic times are not so that anyone needs to be an island."
"If we took their well-field over that’s the only portion of their system that we’d assume. We’ve talked about this a lot, but we’re really talking about it now. We would take this money that we have in this Project 2B to drill wells and build treatment on twenty-six acres owned by Ironwood Township. We would upgrade that well-field and add whatever treatment is needed. Then we would sell the water to Ironwood and Ironwood Township. We wouldn’t take their distribution system that’s inside the City. That would still be left up to them. It would only be the source. If the source is there, I can’t understand why we can’t utilize it for all these customers."
Why Didn’t the City Include a New Water Main in their Stimulus Request?
I brought up the "shovel ready projects" that Ironwood was approved for through the Obama Stimulus Package. I said I was puzzled that Ironwood didn’t include a new water main and back-up in their list of projects, considering they knew Ironwood Township was already going to have to dig up Lake Road to install their new mains.
Verbos told the Chronicle, "That’s what I said too. I can’t understand why they would put all this money into Jessieville – which I’m sure is probably much needed – without addressing the single-feed main from the well-fields." Jessieville could very well have all new plumbing without a source of water to serve it.
"The Water Authority will do what’s necessary and what’s right for everybody." Verbos said, "What I foresee us doing is building their 16" main. Sometimes, you just got to be bigger and better."
Ironwood Was Given the Opportunity to Join the Authority Several Times
"When we started out with the Phase I that we closed on in 1999, it was four or five years that we waited for Ironwood to make up their mind. Finally, when the funding was set, and we were ready to go; ready to set the agreements on the projects – Keith Johnson was the City Manager at that time. The Board asked to write a letter to the City of Ironwood to see if they were in or out. We got a two sentence letter that said ‘We are not going to participate.’ That’s all we needed to know. We needed to know it in writing so we could move on with the project. And we have not stopped since."
How do Ironwood’s Rates Compare to GRWA rates?
There are approximately 7.5 gallons per cubic foot of water. The GRWA bills per thousand gallons, and the City of Ironwood bills in 100 cubic foot increments. Bessemer Township charges $6.00/1000 gallons. Ironwood Township pays $7.57/1000 gallons. And Indianhead is billed $7.25/1000 gallons. Each pay a monthly "Readiness to Serve" fee. The Township will pay $35.04/month for that the fee, and all other GRWA residential customers pay $25.00/month.
EDITORIAL COMMENT - Times are changing fast. At one time, Ironwood had a population of almost 20,000. The huge population helped to pay for water system improvements and maintenance. That population is no longer here. As the population continues to decline, the City’s water rates continue to increase. It is very simple math, in order to supply the same level of service to fewer and fewer people, the price for that service has to increase.
Soon Ironwood will be losing two very important bulk rate customers. The City of Hurley has established their own, first-rate water system, and it won’t be long and the Township will be completely supplied by the Gogebic Range Water Authority.
Like everything in life, as time passes, costs increase. Each and every year, the cost to treat and deliver water to Ironwood customers will go up. Without the bulk rate revenues of Hurley and the Township, Ironwood’s water rates will soar.
It’s time for the City of Ironwood to seriously consider joining the GRWA. They have the funds to make desperately needed changes to our water system. With or without the GRWA, our water rates are going to skyrocket. If I’m going to have high water rates either way, I’d much rather enjoy the benefits the GRWA would be able to offer the City of Ironwood. We can have high water rates with antiquated, dilapidated water mains or we can have all new water lines through the GRWA. We can pay top dollar for water that, at any time, could suddenly be off for days if another water main ruptures, or we can have all new water mains with a quality back-up system.
Give me new roads, new sidewalks, new curbs, new gutters, and most importantly new hydrants that will have a constant flow of good, clean, quality water, any day.
The City of Ironwood needs to start learning how to work well with others. If all communities belonging to the GRWA get two board members, Ironwood doesn’t need to be the exception. Two board members can be just as loud and just as effective as three or four members. If we want to participate in the GRWA we have to play by their rules.
Is it that important that the City of Ironwood have complete control over water account billing? I don’t care where my bill comes from as long as it’s fair and accurate. I don’t even care if they shut my water off when I’m late with my bill as long as I know that whoever is sending the bill is turning off everybody else who is just as late with their bill! It’s not the case in Ironwood! One customer can be shut off for being behind 30 days on a $50 bill and they’ll let other customers run up their bills into the thousands of dollars.
The City’s afraid of losing control of their water system. This I simply can’t understand. The City of Ironwood has an out-dated, worn-out, antiquated, inefficient water system that loses better than half of it’s treated water annually. There are more fire hydrants that don’t work than there are that do. Most of the shut-offs throughout the City are inoperable. If we had the Lamborghini of water systems I could understand not wanting to give it up, but our system is an Edsel. It’s a lemon. I’d love to see the GRWA come in and replace it along with the roads, curbs, gutters, and sidewalks that cover it up.
Sure, our rates will be higher, but they will be no matter which way we turn.
After speaking with Jean Verbos and Kim Mattson, it is crystal clear to me that the GRWA is very fiscally responsible. They have a proven track record to being able to garner grants and low interest loans to get the job done and done right.
Loss of Management positions is a key component when the City gives consideration to joining the GRWA. The reason the GRWA works is because they are able to provide a very good product at the same time they are able to cut and contain costs. One of the cost cutting measures is to reduce management. Notice the City didn’t give a second thought to reducing labor through the years. Here are a few examples: The City used to do all of the following in-house, now each of these services are contracted out: (1) Manhole rebuilds; (2) cemetery maintenance; (3) garbage pickup; (4) street line painting; (5) street crack sealing; (6) meter reading; (7) Public Service dispatch; and (8) hydrant replacement.
Back in 1956, the City of Ironwood had 16 management positions and over eighty union employees (18 police; 18 firefighters; 3 office personnel; 22 street department workers; 7 sewer department workers; 5 garbage men; 4 gas plant operators; and three custodial staffers.)
In recent years, management positions within the City have increased, yet union positions have been steadily declining through attrition and unfair firings that violated City policy. The City needs to re-evaluate it’s position with the GRWA. We need to sit down and decide what is best – not for preserving existing City management positions – but for the residents and water customers of Ironwood.
