$870,000 grant on tap for Osakis water plantA five-year plan could make the difference in an effort to replace Osakis’ water plant.
By: By Greta Petrich, Staff Reporter, Alexandria Echo Press
A five-year plan could make the difference in an effort to replace Osakis’ water plant.
After months of waiting, the Rural Development funding package came in much better than the city anticipated, resulting in what looks like a self-sufficient system at no additional cost to the city.
Osakis can get a grant for $870,000 or 45 percent of the $2 million proposed water treatment facility budget. The remaining $1.13 million would be covered with a low-interest loan.
Under Rural Development’s plan, it offered the city a 39-year, low interest loan. Using the current rate of 3.25 percent, it boils down to a $50,850 annual payment that should easily be covered by resident water fees.
Looking back to the “five-year plan,” in 2007-08, the city intended to gradually increase water rates to pay for a water plant by 2013. By continuing to follow that plan, a user rate fee increase of $2 in 2011 and $2 in 2012 will cover the cost of the improvement.
Something some residents may not realize is how rare it is for a city to provide soft water for its residents.
Osakis is one of only 14 cities in Minnesota that offers this service.
Brian Hiles reported the average cost for individual water softening is about $1 per day or $30 per month.
The city of Osakis provides this service with the average customer – using 4,000 gallons – paying $28 a month for the treated water.
If the city removed the water softening portion of the project, it would save approximately $400,000 in project costs, however, residents would have to soften water individually. The total cost for softened water per resident, per month would be around $55.
The bottom line
After Hiles’ presentation, Jerry Olson, councilman, who has openly objected to the project since it was first presented said, “This obviously isn’t the bottom line.”
He questioned the spin-off effects of the project, such as problems with the city’s old water lines. City Maintenance Superintendent Ron Kleinschmidt noted a new plant won’t affect pressure and he doesn’t anticipate any problems from the new plant. He also pointed out the city spent $10,000 in water plant repairs last year and has already spent $5,000 in 2010.
Dave Zerr, who lives in the neighborhood near the planned site of the new plant, questioned whether the old roads could handle construction traffic.
Hiles said they can control the haul roads and noted the contractor is responsible for any damage to the new roads.
Councilman Randy Anderson favored the project, noting the great thing about it is that it pays for itself.
Councilman Bruce Pederson agreed in proceeding with the project noting three key reasons:
•The present condition of the water plant;
•Receiving a much higher grant percentage than anticipated;
•Low interest rates, which, he noted, over time could be a big factor.
The city will host a public hearing to allow input on the water plant project Wednesday, March 24 at 7 p.m. Prior to the meeting, the water plant will be open for public viewing beginning at 4 p.m. Kleinschmidt highly encourages anyone who hasn’t seen the conditions of the city water plant to stop by for a tour.