City seeks funding for wastewater treatment project
New York Mills Herald After spending close to 10 years talking about and pursuing funding options it looks like New York Mills will finally go ahead with the much anticipated wastewater treatment facility upgrade. Finding funds to pay for the pro...
New York Mills Herald
After spending close to 10 years talking about and pursuing funding options it looks like New York Mills will finally go ahead with the much anticipated wastewater treatment facility upgrade.
Finding funds to pay for the project - estimated at $4.3 million - has been the stumbling block year after year. The city recently received a $600,000 for the upgrade from a Small Cities Development grant and the City Council discussed Tuesday in a special meeting just where to find the remaining funds, which basically comes down to two options. One being a loan from the federal Rural Development fund, which the council decided not to accept at its regular monthly meeting last week, and the other a loan through the state Public Facilities Authority.
The PFA funding will cover the remaining $3.7 million after the $600,000 Small Cities Development grant and breaks down as follows. The city is eligible for a $2.8 million PFA loan at 1 percent for 0-20 years. In addition to the PFA loan the city is eligible and approved for an $851,000 Wastewater Infrastructure Fund loan at 0 percent interest. Essentially, the two low-interest loans will be paid off in a period of 22 years.
After studying the numbers the PFA funding is more attractive to the city, as opposed to the Rural Development option, which would have been a 40-year loan at 4.7 percent interest and higher per year payments.
To cover the loan payments NY Mills residents can now expect an increase in water and sewer rates in order for the city to pay for the project. The city would have to come up with an additional estimated $160,000 per year. The council discussed at length Tuesday and decided the best way to generate that kind of revenue is with a combination of increased water/sewer rates, increase in yearly tax levies and annual budget containment.
Current water rates per hookup are a $2 water maintenance fee; $4.58 minimum rate; $3.21 per 1,000 gallons up to 10,000 gallons; and $2.88 per 1,000 gallons for over 10,000 gallons of usage. The sewer rate per 1,000 gallons of water used is $2.13. NY Mills property owners can expect that rate to gradually increase to about $3.50 per 1,000 gallons of water in the next year or so.
This will not only affect the average user but will have a big effect on large capacity users like Industrial Finishing Services, which uses the most water in the city. IFS currently pays about $2,500 a month in water/sewer bills and a significant increase in rates would affect that companys budget considerably.
Under the orders of the Minnesota Pollution Control Agency the city is required to upgrade the existing wastewater treatment facility to accommodate future expansion. In order to do this the city is looking to purchase 160 acres of land west of town on 383rd Street to construct two new aeration ponds and a new irrigation site for treated water storage and discharge near the current site.
On Tuesday the council authorized Jon Pratt of Ulteig Engineers to proceed with final design for the facility upgrade. If the city does not continue with the project this year it will likely drop off the PFA funding list and would essentially be back to square one in trying to find money to pay for the project.