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The city will qualify for up to $500,000 to improve existing houses in the southeast section of town if the state housing authority approves the application that was submitted last week.

The city would be obligated for $12,500 toward a planning grant for the project.

When the motion deadlocked 3-3, the mayor cast his vote in favor the application. Council members Marguerite McNiven, Lupe Vandercook and Steve Polewach opposed the motion.

This would be the second phase of a state housing authority program for the city. Sandusky has already received $150,000 to improve second-story apartment units downtown. A total of seven apartment units are being fixed up - five of which have been completed. The grant included a contribution by the apartment owners.

"The days of just building an industrial park and waiting for business to show up are over," Councilman Rick Cook said. "We have to build the industrial park, but also try to nourish our community so we can compete against other communities in Michigan."

The grant would be coordinated through the Human Development Commission.

The program would be coordinated through the Human Development Commission.

In other business, council adopted a resolution aimed at clarifying the issue of municipal water and sewer services beyond the city limits.

Under the proposed ordinance, the city would only provide sewer service to residents of Watertown Township who are already under contract, and both sewer and water to property outside the city only if the property were annexed.

"That' been the rule, we just wanted to clarify it," said city Manager Lou Laponsie.'

"There've been some inquiries, so we thought we'd better clarify the point."

The proposed ordinance will be published within 15 days of its enactment and will take effect in 20 days. Copies of the ordinance will be available for purchase or for inspection at City Hall.

Council unanimously passed the Fire Hall lease. The lease includes a $5 million liability limit that will cover the city for damages up to that amount.