04-03-2023 City Council Meeting Minutes

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City Council Minutes April 3,2023 Page 3of10 Ms. Leverson said in the PER that Mr. Houle talked about there are some alternatives to doing this project. She said for the Gravdahl lift station the city can replace it, fix different pieces of it, or do nothing to it and move forward. She said for the force main the city could be lining the existing force main as an alternative, could be adding additional lines, could just remove and replace, or do nothing. She said the city decided to remove and replace both issues. She said when they look at the potential funding sources for this type of a project, they look at these different funding sources. She stated as Mr. Houle mentioned, Rural Development, so USDA rural development has funding that is loan and grant funding. She said the loans go out for forty years and grants are based on affordability of the community, what they determine is affordable. She said both the rural development and PFA are considered primary funders for things like this. She said the PFA-Minnesota Public Facilities Authority do low interest loans and their rates are between a one and two percent rate now for interest. Ms. Leverson said they lock in the rate when the loan closes. She said they also have loan forgiveness based on affordability. She said these are twenty to thirty years. Ms. Leverson said another funding source is the Small Cities Program, which is this program that gives up to $600,000 to use. She said $580,000 would be used for the construction and $20,000 would be used for administration of the project. She said a city can also do bonding and bond at whatever term you want, or you can pay with cash on hand. Ms. Leverson said the overall cost and proposed funding that they are looking at the Force main construction ends up being about$651,000, the lift station $447,000. She said these costs include engineering, property acquisition which include easements, and administration and legal expenses. She said the total cost estimate is about$1.4 million. She stated these are estimates the engineers put together based on experience and the real costs do not come in until the city bids the project. She stated they are proposing doing a PFA low interest loan for 811,000 or whatever the city chooses to finance, and small cities grant for 600,000. She said that will bring it up to $1.4 million. She explained other programs that are available. She said the Minnesota Public Facility program is state funds that comes from the state legislature, and they call it the clean Water Revolving Fund. She said it helps communities build their upgrade and wastewater treatment needs to comply with discharge standards set up by the Clean Water Act. She said this is the one that they work hard to get projects on the PPL list and then the IUP list, so they are on the list when PFA is ready to go. She said this is the one that provides low interest loans and forgivable loans. She said they are waiting for the state to open things up with the bonding bill. Discussion ensued about easements. Ms. Leverson said the next funding source is the Small Cities Development Program which is federal funding that comes from the Housing and Urban Development. She said this bank account at the federal government gets passed to the state of Minnesota to Deed and then Deed releases the funding. She said cities can apply for housing and other things, but the city is applying for public infrastructure and the maximum request is $600,000. She said that includes $20,000 for grant administration and $580,000 for the project. She explained the schedule that Tim Houle worked on, and that engineering work will need to be