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Harmony City Council reviews financing options for wastewater system

Fri, Nov 15th, 2002
Posted in Features

Harmonys City Council met once again with Chuck Janski to discuss financing options on the $909,000 wastewater system project. The city could qualify for the Rural Development Grant if the city can get the paperwork done before the year 2000 medium household income figures kick in. The city would have less than eight weeks to dot their "is" and cross their "ts" regarding the allocation of requested funds.

The glitch comes in when looking at the average household income for the city. Several years ago the average household income was at $18,700. The 2000 census shows this figure has climbed to $30,000 good for families, but not so good if the city wants to qualify for governmental aid. Paperwork will be expedited to hopefully beat the income status rating change.

Janski penciled out four different options allowing them to cover the estimated $909,000 bill.

The first option includes a local bond sale, a 5% rate, 20-year term and an annual payment of $73,018. Annual cost per user: $135.

The second option includes a Public Finance Authority Loan (MPCA), a 2.5% rate, 20-year term and an annual payment of $58,377. Annual cost per user: $108.

The third option is a RD/RUS Grant & Loan. This would include a 45% grant with the remaining amount at 4.5% over 40 years and an annual payment of $27,199. Annual cost per user: $50.

The fourth option would be the best - a 75% grant with remaining loan at 4.5% rate over 40 years with an annual payment of $12,363. Annual cost per user: $1.92. (All user costs are based on 540 users.)

When asked about the life expectancy of these improvements Janski said "wastewater is tough to treat and hard on metal," but he would be looking at 20 years of service. He felt the plant had plenty of capacity and would carry the city for some time. The council will wait to see how the paperwork shakes out for the projects expenses.

Other business

Brett Grabau gave a brief overview on the T.H. 139 project. Water and sewer lines are in with the storm sewer half completed. Extra fill has been hauled to the northwest lot in the city. Bacteria and water pressure testing must be completed yet. A $382,000 payment, 25% of the project, was approved.

The city will be getting credit for liquidated damages, terms within the contract that the contractor has not met and where fines are assessed.

Two drawings showing roof pitches for the Community Centers roof were on display. The first pitch includes a 1:2 pitch with an estimated cost of $115,000. The second drawing showed a 3:12 pitch with an estimated cost of $128,000. Extra insulation can be added to either style of roofing. More detailed drawings with accurate costs were requested by the council before they make any decisions.

The Sixth Street SE sanitary sewer assessment will include assessing 25% of the cost to property owners at 5% over five years. First installment would be with taxes payable in 2004.

Southview Addition assessments shall extend over a ten year period at 5% rate and begin January of 2003.

The council certified the 2002 election with Mayor David Runkel, and council members Sherry Hines and Jerry Shuck receiving the highest number of votes during the election.

The council approved an audit agreement with Lloyd D. Johnson at a fee of $5,810.

The city will be going after delinquent assessments past 30 days.

Council member Jerry Shuck requested the council review sewer fees as he felt the system was not fair to everyone.

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