Task force reviewing proposals to strengthen rules for Michigan dam owners

A state task force is reviewing recommendations to strengthen regulations for Michigan's dams in the wake of the May failure of two "grossly underfunded" Midland-area dams that led to catastrophic damage. 

The Michigan Dam Task Force met virtually Monday to debate the proposals that would address questions of financial responsibility and licensing among dam owners and establish an emergency fund for hazards and a statewide notification and monitoring system.

Following the dam failures on May 19, the Department of Environment, Great Lakes, and Energy asked the Association of State Dam Safety Officials to perform a thorough evaluation of the state's dam program. The association returned with a 270-page report and 19 recommendations, which the Dam Task Force is reviewing and refining before it heads to the governor in February. 

Bill Rustem, an adviser to former Republican Govs. William Milliken and Rick Snyder, serves on the task force's committee of program management, funding and budgeting, which endorsed 34 additional recommendations.

"The Edenville Dam was a wake-up call to the state that we had been grossly underfunding our dam regulatory system," Rustem said Monday. "We need to find revenues that enable us to do what other states are doing, and what is right for Michigan to avoid any problems in the future like we've experienced at Edenville."

In the 2018 Michigan Infrastructure Report Card, the American Society of Civil Engineers assigned Michigan's dams a C- grade, noting more than $225 million would be needed to address the state's aging dams. Of Michigan's dams, 271 are more than 100 years old. About 12% of dams have a "high" hazard potential rating, and 67% others have reached their intended 50-year design life.

Michigan has 2,523 dams. Of those, 1,153 are regulated by either state (1,059) or federal (92) agencies. Some 1,370 smaller dams are not regulated. Of regulated dams, 803 are privately owned and 350 are publicly owned.

Following the May floods, consultants hired by the 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.

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The dam safety association's report outlined recommendations that would have to be made by the Legislature. It said the state's dam safety program "lacks the authority to require owners to obtain a permit to operate and maintain dams in a safe condition, nor to annually report on maintenance, operation and engineering investigations."

Also, there are "no requirements for owners to maintain key records, periodic exercising of emergency action plans or for owners of high hazard dams to provide proof of financial responsibility or security for the continued safe operation and maintenance of their dam."

Now, the state task force is reviewing what qualifications and capabilities should be established for dam owners and whether current owners should be grandfathered in.

While some committee members argued Monday that no one is striving to build new dams in Michigan, Rustem disagreed, saying there should be changes made to permits, which currently last forever.

"We do water, air quality, all these other things that have to be renewed, and how long should that authorization last? Forever? I don’t think that makes much sense," he said.

Michigan's dam owner agencies should "strive to lead by example" starting with an inventory-wide assessment of state-owned dams and then setting financial goals for yearly maintenance, the subgroup committee determined.

A Dam Safety Emergency Fund would be established to mitigate hazardous situations where dam owners don't. The task force, however, stated the bulk of the financial responsibilities should lie on the owners and beneficiaries.

"Our recommendation now is that for a dam to continue to exist the owner would have to demonstrate financial responsibility," said Douglas Jester, a task force member and partner at 5 Lakes Energy, a Michigan-based consulting firm.

Owners would need to show a record of their dam's utilities so that it is properly taxed, which would fund ongoing maintenance of the dam, Jester said.

Under the recommendations, Jester added, owners would pay their share of operating a potential Dam Safety Program, funding the maintenance of dams, their ultimate removal and insuring them against potential problems against catastrophic failures.

"For all other dams, we would look to EGLE to make a determination of whether the owner can satisfy the financial responsibility," he said. "All other dams would be an application of the provision in Michigan’s constitution funded by a special assessment through the dam's county."

The emergency fund would also aid "orphaned dams," in which owners have abandoned responsibility of the site. The fund would be available with the state to remove the dam if no one is able to maintain it.

"We have to provide a funding mechanism that assures that those low-head dams that there really isn't purpose for anymore can be removed and the natural system restored," Rustem said.

The association's report suggested Michigan follow the examples set by other states, including Pennsylvania and New Jersey, in offering a revolving loan program to provide grants and low-interest loans to public owners of high-hazard dams that need rehabilitation.

Liesl Clark, director of EGLE, closed out Monday's task force meeting, noting members will make a plethora of recommendations and requirements but "let's not get overwhelmed." The department, she said, still has to work with the state legislature to determine priority over fundamental issues.

srahal@detroitnews.com