Ludington City Council agrees in principle with House of Flavors about waste treatment payments

December 19, 2017 GMT

The Ludington City Council Monday approved in concept an agreement that will allow House of Flavors to pay $1.5 million toward upgrades at the city’s wastewater treatment plant in installments during a five-year period instead of as one lump sum.

Even if Ludington receives the money over five years, City Manager John Shay said it could help the city save up to $675,000 in its repayment of a Rural Development loan needed for other upgrade work to the plant and buried sewer lines, as well as the relocation of the wastewater plant’s outflow pipe to reach the Pere Marquette River.

The city has been ordered by the Michigan Department of Environmental Quality to make the changes.

There are two reasons the city could save money with the payments, Shay said. One is that House of Flavors agreed to pay interest on its payments to the city that would be 1 percent higher than the interest the city is paying on its loan. The other is that the city could use the House of Flavors payments each year to pay the principal on its own loan faster than with its regular payments.

Monday’s vote was 4-1 to approve, in concept, the agreement that House of Flavors could pay the money during a five-year period. Councilor Les Johnson voted no.

“I just don’t feel the city should do it if we couldn’t come up with a way to assure collateral,” Johnson said. “When they come back with that I will feel more comfortable and may vote for it.”

City Attorney Richard Wilson said negotiations with House of Flavors will continue until security can be arranged for those payments and said there are several options to do that.

After those details are ironed out, Wilson said, the written agreement will come back to the council for it to consider at a future date.

Read the full story in Tuesday’s Ludington Daily News print and eEditions.