NORTHPORT — A proposal that would have had all Village of Northport and Leelanau Township residents pay for a local sewer system — even those who are not sewer customers — has failed.

The proposal to create a Metropolitan Authority District (MAD) that could collect a property tax of up to 1 mill passed in the village on a vote of 160 to 44, but failed in the township on a vote of 208 to 321.

The proposal had to pass in both municipalities in order to go into effect. It excluded the Northport Point Cottage Owners Association, which operates its own sewer system and cannot be taxed for the new sewer under an agreement with the township.

The $13.3 million sewer, financed by the sale of bonds in 2006, has a looming deficit at the end of its 20-year repayment plan, which comes in 2028. That shortfall is estimated at $1.36 million.

The sewer serves most of the village and part of the township.

“The voters have spoken,” said Doug Scripps, township supervisor. “We knew of deep pockets of resistance and we knew of deep pockets of support.”

Scripps called the loss significant.

“We’ve explored a number of avenues to pay for this,” but sewer ordinances that have always been in place say that the users must pay for the system, Scripps said.

He said the issue will be discussed at Tuesday’s board meeting and will go from there.

If the MAD had been approved by voters, all village and township residents would have paid a 0.4-mill property tax for nine years. The tax would have generated $160,000 in its first year and would have been used to pay the shortfall.

It also would have eliminated a $60,000 annual payment on the debt from both the village and township general funds. The township has made the payment for the past five years and the village for three.

Elizabeth Mallek lives in the township and is a sewer customer. She is disappointed, but not surprised that the measure didn’t pass.

“In my opinion I think there were some concerns over the charter language,” Mallek said. “Hopefully it’s close enough that they’ll revisit this on the ballot next year.”

Sewer customers currently pay high user fees, as well as a debt service fees of $256 per year for village customers and $232 for township customers. Sewer users also paid connection fees of $16,000 to $18,670 — depending on when they hooked up to the sewer.

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