New estimated cost is $94 million, up from $76 million estimated last July
City council members are gradually understanding the cost of refurbishing the sewage treatment plant.
During a business session after Monday night’s regular meeting, City Engineer Steven Lang presented preliminary estimates for the plant as well as when council members could expect bids.
Lang revealed that the City was currently considering a total estimate of the $ 94 million project, almost $ 20 million more than last year’s estimate at the same time, which was 76 million of dollars.
This price spike is largely due to inflationary costs of around 18% over the 12 months since 2021 estimates.
As feared, more of that hefty price tag will likely be shared even more by taxpayers after the state legislature failed to give Austin the $14.5 million dollar bond. requested, which were initially approved, but were taken off the table at the last minute.
“I think the disappointment is about leadership,” Mayor Steve King said at a June city council meeting during a presentation by Rep. Patricia Mueller. “It’s disappointing overall. We are the losers of this bail bill. We don’t have the luxury of waiting. We just have to do it.
With the money from the surety out of the equation this year, increases of 7% of sewer use costs over the next three to four years are perhaps necessary to increase the $ 7.4 million income to cover any shortfall.
This would also reflect a strong overall increase.
“That’s an 80% increase over 10 years to fund this monster of a project,” Lang said.
None of this prevents the board from withdrawing these increases if it receives surety money next year or the following year, but the fact remains that the city is in a difficult position .
Regarding how the city will pay for the necessary construction, the city is reaching an agreement with Hormel Food Corps to reimburse $45 million in industrial costs, and $49 million in domestic costs would be paid through a combination of channels. which includes the sewer user fee, grants, reserve dollars from the fund, and a probable 20-year state loan at about 2.5%, 3% interest.
“This is a new cost for us that we need to make sure we’re creating enough revenue to pay off the additional loan,” Lang said. “There is a lot of money circulating.
Lang said a submission date has been set for 2 p.m. on July 12.
Another calendar includes the continuation of the refinement of figures by the July 25 meeting with a more finalized image ready by August with the hope of having funding in place by the Labor Day.
“The goal is to have everything in place … at that first board meeting in August – August 1,” Lang said.
No date has been set as to when construction is likely to begin, however, Lang said Thursday that construction will include a combination of renovations and new structures.
Most buildings and reservoirs of the site will see work, some being renovated to continue to be used today, while others will be reassigned to a new processing process.
Other buildings will be fully demolished to make room for new treatment processes or transformed into green spaces.