More than $200,000 worth of funding may be flowing from the city coffers to the Cassopolis-area sewer authority, in order to help the latter with some critical repairs to its wastewater system.

Members of the Dowagiac City Council voted in favor of a resolution to loan $230,000 to the Cass Area Utility Authority during the council’s meeting Monday evening at city hall. The agreement, should it be approved by townships within the local sewer authority, will help pay for repairs to one of the CAUA’s main lift stations.

Under the terms of the contract, the city will take out the $230,000 from its $1 million sewer fund and loan it to the CAUA for the repair work, at a 4 percent interest rate over three years. To cover the $76,000 annual interest payments, the CAUA will be required to raise its sewer rates to $4 per customer, according to Dowagiac City Manager Kevin Anderson.

The CAUA, which covers households in Calvin, Jefferson, LaGrange and Penn townships, has used the services of the city’s wastewater treatment facility for more than 30 years, accounting for around 11 percent of the sewage flowing into the local plant, the city manager said.

“They are a very significant customer of ours,” Anderson said.

Over the summer, one of the CAUA’s lift stations failed, which caused sewage water to spill into Diamond Lake and a business nearby the equipment. Although the station is currently operating due to emergency repairs, it will require around $330,000 to fully repair.

The CAUA currently has $100,000 set aside for the repair work, and has already received clearance from the Michigan Department of Environmental Quality to perform the work.

Given the partnership between the city and the sewer authority, as well as the fact that it would cost the CAUA significant time and money to acquire additional funding through the bond market, Anderson said the city should loan the remaining money for the repair work so that the authority can get started with the repairs in short order.

“I think this is a good business decision for us, to work with our customers who have been with us for the long term,” Anderson said.

The townships are expected to vote on whether or not to accept the terms of the loan in the coming weeks, the city manager said.

Also on Monday:

• The council approved a motion reappointing 3rd Ward Councilman Leon Laylin as Mayor Pro Tem

• The council approved a motion canceling its meeting scheduled for Monday, Dec. 25

• The council approved a motion to pay $842,765.39 worth of outstanding bills and payroll