Wykoff wastewater plant bids come
In over budget, further delays project
Tuesday, September 17, 2013 3:39 AM
Wykoff's city council received some disheartening news during its September meeting Monday, Sept. 9, as WHKS engineer Kevin Graves reported that the lowest bid of two that was received for the proposed wastewater treatment plant project had come in over budget at $2.25 million.
The city's budget for the project stands at $1.63 million and that meant that the city would have to make adjustments to its project calendar. The project was originally to have started this summer and completed sometime within the next year, but funding difficulties have impeded progress.
The council could have applied for extensions on its existing funding, but after much discussion chose instead to reject the bids it had received and reapply for funding.
"We've talked about the bids, and they're significantly over the estimated cost for the plant," said Graves. "I had a list of research items to go over with the Joseph Company about ways to cut costs, things they identified to be eliminated or changed. I've got a breakdown of original costs in the bid, and one of the items is to eliminate the emergency generator for the plant. We'd need the USDA (United States Department of Agriculture) and MPCA's (Minnesota Pollution Control Agency) approval before we do that. We've looked at additional funding sources through the Public Facilities Authority (PFA). The main grant is the point source implementation grant (PSIG), and its purpose is for a receiving phosphorus limit in the plant, but unfortunately, this particular project doesn't qualify for state funding grants."
Currently, Wykoff has a small cities grant and a loan to pay for the proposed wastewater plant, but with setbacks presented at the meeting, Graves said "the Wykoff project doesn't score very high on the state's project list for this year. We did do some digging to see what's available, and the other discussions we had were with Rural Development and the Small Cities Development Grant Program (SCDGP). The main issue is the Small Cities timeline - we asked if there can be an extension, and there can be one up to 12 months, but it's only 12 months and no more...it has to be used by the end of 2014."
Graves pointed out that the project's price tag, at more than 20 percent of the original cost of $1.15 million, would require that the city reapply for funding through Rural Development, a program of the USDA, to "readjust for alternatives. The Department of Employment and Economic Development (DEED) is concerned with the time frame Rural Development allows and questions whether 12 months would be more efficient or if it's just better to reapply to restart the clock for 30 months."
Michelle Vrieze, of DEED and SCDGP, and Laurie Balata, of the USDA and Rural Development, were on hand to explain why the city's project would be set back by yet another year and to offer financing options. Balata noted that the application process for USDA funding through Rural Development "is not daunting...just time-consuming because you're basically updating all the paperwork." Furthermore, according to Balata, the city has to have a loan before a grant amount from SCDGP can be determined, and Rural Development is at the end of its fiscal year, awaiting funding from the Legislature.
Mayor Lyman Hare asked, "Does the money we've paid WHKS come out of the grant?"
Balata replied that "it comes out of the loan first -- all of the soft costs come out of the Rural Development funding, and the grant money is used last."
Hare inquired, "The loan is there - when we reapply, will we have a new loan and this loan?"
Balata answered, "It's basically two loans - I think the city is capped at 45 percent grant money for the total project."
Hare asked, "What's the next step? Deny both bids?"
Graves spoke up. "According to this, we have 60 days from Aug. 19 to make a decision. You would not have all the funding ready to go. You have the option to reject the bids and rebid at a later date."
Councilor Megan Larson expressed frustration as she directed questions at Graves. "How long is this going to take? Another six months? Even though the project is supposed to be completed this year, it's not going to be started this year." She eventually questioned whether WHKS would be willing to pay for additional engineering, as reapplying for funding would mean that further engineering expenses would be incurred.
Graves answered that he would have to ask his supervisor.
The remaining council and Hare, all showing frustration at the delays, voted to reject the bids.
Next, councilors approved the 2014 preliminary tax levy, with $124,896 in general revenue and $34,712 in a refunding bond for a total of $159,608.
Also, Tim Penny, of the Southern Minnesota Initiative Fund (SMIF), stopped in briefly to explain to the councilors what SMIF does for small town community foundations and how it invests funding for the cities.
"I've been president for six years. We invest community funds and help manage them, like in Spring Valley with the community foundation, or in Rushford, Preston and Harmony. These community funds invest in a lot of different projects, and we do match them if they're investing in early childhood programs," said Penny. "There's probably a few hundred thousand invested in Fillmore County. It probably wouldn't come to Wykoff immediately, but it's a tool in your toolbox...we'd like to find ways to bring more resources to Wykoff. One of our programs is that we have a partnership with Valspar Paint, so if you have historic buildings, you can get free paint."
Rumors that Wykoff's First Responders would no longer be responding to emergency calls as of Oct. 1 arose during the last minutes of the meeting. Councilor Rocky Vreeman noted that he'd heard such and that it was new information to him at the time, but that he intended to find out from Wykoff First Responder Leroy Eickhoff, who is in charge of the crew. City clerk Cheryl Davis was charged with the task of determining whether Wykoff's responder service would continue its mission.
The October Wykoff city council meeting will be held Tuesday, Oct. 15, at 7 p.m. due to the Columbus Day holiday.