Water treatment plant upgrades
Despite the fact the bids came in higher than the cost estimate by $1 million, the Blue Earth City Council voted 4-3 to proceed with a wastewater treatment plant upgrade project.
The vote came after a lot of discussion concerning whether to start the project immediately this summer, or wait until fall when funding would be nailed down.
And despite some urging from city administrator Tim Ibisch, the council decided to proceed as soon as possible.
The lowest bid for the work came in at $6.54 million from Rice Lake Construction Group, while the engineer’s estimate had been $5.5 million. Then there were some added “soft” costs including additional engineering, legal work at $860,000. An additional item of a septic receiving station at a cost of $94,000 was deducted for the construction bid.
All that put the final cost of the project at $7.33 million.
They city plans to apply for a loan from the federal Public Financing Authority (PFA) to cover the cost of the project.
However, the PFA loan would not be authorized until August or September, and while engineers from Bolton & Menk are fairly sure it will be granted, there is no guarantee, they said.
If it is not granted, the city will need to do a bond sale to cover the project costs. The difference is in interest payments the PFA loan would be 2 percent lower.
“I think we should proceed with the project as soon as we can,” Mayor Rick Scholtes said. “We need to do this project either way, so we might as well get started.”
The wastewater treatment plant has already had several issues with equipment failures, and the council has been told it is only a matter of time before there could be more problems.
“All of the work is needed and necessary,” said Bolton and Menk engineer Kristopher Swanson at last Monday’s City Council meeting. “There is no gold plating here, it is all needed.”
Public Works Department supervisor Jamison Holland told the council that while the plant might be OK for the three months before the PFA funding, there were no guarantee something could not happen. “We have backup systems, but a worst case scenario is some equipment fails that is not backed up,” Holland said. “It also has to last for two years, until all the new equipment is in place and online.”
In the end, the council decided to not wait and proceed as soon as possible. The split vote awarded the project to the low bidder, with instructions for the work to start as soon as possible.
Voting yes were councilmen John Huisman, Glenn Gaylord and Dan Warner, and mayor Scholtes, with councilmen Russ Erichsrud, Wendy Cole and Marty Cassem voting no.
The wastewater treatment plant upgrade is not the only large project the council is working on, and they revisited several of those at last Monday’s meeting.
The council got a first look at a drawing of a proposed new Public Works Department building which would be built where the former city-owned liquor store is located.
The council also took a look at another revised plan for a possible housing development area near Lampert’s Lumber.
The revised plan shows an area that had been planned as a location for an electrical substation now being used instead for possible new townhouse development location.
It would add six lots to the proposed housing development, with all six used for three groups of townhomes.