After five years of planning, the expansion and upgrade of Brainerd's wastewater treatment facility is shovel ready.
Bids for the $35 million project will be opened next week. If approved by the Brainerd Public Utilities Commission at the end of March, groundbreaking is expected to happen in late May or early June.
"When you think about it, this might be perfect timing," Brainerd Public Utilities Superintendent Tom Phelps said. "We needed to upgrade this facility, growth has slowed down and when we get this facility up and running we'll have capacity and hopefully growth will start to come back."
The expansion and upgrade is needed for three reasons, Phelps said. The current facility was designed with a 20-year life span but is currently in its 28th year of operation; new technology is needed to better treat wastewater being discharged into the Mississippi River; and both Brainerd and Baxter, which contracts with Brainerd for wastewater services and will pay for a third of the expansion costs, want more capacity for growth.
The $35 million cost is a hefty sum. To help pay for the loans for the project, both Brainerd and Baxter have been collecting sales tax. Since it started collecting in May of 2007, Brainerd has collected about $1.3 million. Baxter, which started collecting in October of 2006, has collected $4.1 million.
"I'm guessing on average over the next 12 years (Brainerd) will be collecting about $785,000 year," said Todd Wicklund, Brainerd Public Utilities Commission Secretary. "That's close to what I thought we'd get to start with."
Baxter is authorized to issue up to $15 million in bonds to finance several projects, including water and wastewater facilities and building and equipping a fire substation, Baxter City Finance Director Jeremy Vacinek said in an e-mail. To date, $2 million of the sales tax proceeds have been pledged toward the $10 million water treatment plant project and an estimated $3.1 million is anticipated to be pledged toward water tower project, leaving about $9.9 million for Baxter's one-third share of the wastewater treatment plant with Brainerd.
Local sales taxes aren't expected to cover the entire cost of the project, however.
Pam Loeffelbein (left) received her receipt from northeast McDonald's employee Amanda DeCent last week after paying for her meal. The cities of Brainerd and Baxter are depending upon sales tax from such purchases to help pay for an expanded and upgraded wastewater treatment facility.
Brainerd Dispatch/Steve Kohls
» Purchase reprints of this photo.
Wicklund said between both cities' sales taxes and debt service collected by BPU, about $2.1 million a year would be collected over 20 years repayment plan on the loans. To pay the debt about $2.4 million a year would need to be collected.
To make sure the debt is paid, Wicklund and Phelps said a rate increase on BPU customers' debt service fee would be implemented. Currently, residential customers pay $9.50 a month for debt service and Wicklund said to cover the gap under current circumstances would require a rate increase, which as of yet is undetermined. In Baxter, the difference will need to be covered by the city's sewer enterprise monthly user charges and development driven sewer availability charges, Vacinek said.
Wicklund and Phelps point to several factors that could reduce the overall cost to taxpayers.
One is the sales tax itself. Wicklund noted his projections are pessimistic in that they don't have the sales tax being collected after 2019, the year its set to end. The city could receive an extension on the sales tax and the economy could pick up, meaning more tax could be collected.
Another bright spot is the federal stimulus plan, which Brainerd Public Utilities is in the process of applying for through the state. Though the maximum the wastewater treatment facility expansion could receive is a grant at 5 percent of the total project cost, it would still represent $1.5 million - $2.1 million with interest included - that could be subtracted from the project cost.
"We're right at the top, in the top 10, on the Public Facilities Authority priority list," Phelps said. "Hopefully we'll get some of it."
Also, because there was a lot of interest in the project from contractors, bids could come in under estimates.
When the new wastewater treatment facility goes on line in the fall of 2011, wastewater capacity will jump from 3.6 million a day to $6 million gallons a day and an ability to jump to 7.5 million gallons a day if needed.
Two years from now will be the end of almost seven years of work obtaining a permit from the Minnesota Pollution Control Agency. The permit was delayed in 2007 after elevated levels of perfluorooctane sulfonates were found in the current facility; to negotiate a contract with the city of Baxter that required several joint meetings between the cities; and to put together plans and specifications. "The last time it took them 10 years so we're doing good from what they did in the past. It's a lengthy process," Phelps said.
Brainerd Dispatch ©2013. All Rights Reserved.