Big water plant item heads to City Council Monday
Grand Forks leaders are set to vote Monday on a big chunk of plans for the city's new water treatment plant, with an eye on getting construction moving in earnest by early December.
Grand Forks leaders are set to vote Monday on a big chunk of plans for the city’s new water treatment plant, with an eye on getting construction moving in earnest by early December.
The Grand Forks City Council is expected to approve a five-point package at its Monday evening meeting, full of strategies and agreements that deal heavily in how the project will be paid for. Not only is the package poised to increase water rates in 2017, but it also will set a course for financing the city portion of a project that now looks to have a nearly-final price tag.
“I keep saying it’s the largest single investment the city of Grand Forks has made in any facility in our recorded history,” City Administrator Todd Feland said. “It’s quite a moment in time.”
The package includes a roughly $154 million cost on the plant. Feland said city leaders have been asked to approve a financing plan that elects for this price -- instead of a roughly $146 million price tag -- because the more expensive option is financed through a state drinking water fund that allows for better interest rates. That translates into lower annual payments of about $3 million per year instead of $3.4 million.
Paying financiers back, though, is a two-pronged process. City leaders still expect to split funding on the project 50-50 with the state. Though leaders already have significant state funding in hand, Feland pointed out he’s hoping for another $30 million from the state in the coming biennium , and the remainder in the 2019-21 biennium.
“It’s never easy, but we do have a commitment that they’ll (the state) work with us to cost share at that 50 percent,” Feland said.
There’s work to do on the city side of that 50-50 split as well. Perhaps the most important point for local residents: after the failure of a city sales tax increase that could have backed the plant, water rates are likely to go up.
City leaders have said that would happen if the tax proposal didn’t pass, and instead of a 2 percent water rate increase that was first anticipated in 2017, leaders are expected to approve a 9 percent water rate increase for the coming year on Monday evening. Similarly larger increases on water rates are expected to follow in the next several annual budgets.
Feland said those increases don’t have anything to do with council members’ potential selection of a more expensive financing option. Both options, he said, are well within the revenue flow the higher rates would provide.
The package was first approved unanimously Monday in city committee. Given that the City Council has the same membership, approval is expected Monday as well.
Feland said a ceremonial groundbreaking is likely Nov. 29, with full construction kicking off Dec. 6.
“It’s been a project we’ve been working on since the flood of 1997, and we’ve made lots of improvements in the water system over these past 15-plus years,” Feland said “Now we’re at the last place with the water treatment plant. We really had to work hard to put all these pieces in place to move forward.”