GRANITE FALLS -- City Council members in Granite Falls called for a public hearing on July 20 for a proposed water rate increase.
A rate hike is the first step toward a possible $14 million project to build a new water treatment plant out of the floodplain, according to City Manager Bill Lavin.
He said council members approved action at the meeting Monday to approve moving toward construction of a new plant while also seeking grant funding for the project. The action came after council members learned that the city could need to double its residential water rates for the project.
Engineers with Bonestroo Engineering told council members that U.S. Department of Agriculture Rural Development currently is offering a funding package with grant funds for 45 percent of the project costs, leaving the city responsible for financing the remaining 55 percent, or $7.7 million.
The engineers recommended that the city implement water rate increases in stages to cover the debt service costs that will result. What they term the "worst case'' scenario would lead to an approximate doubling of water rates.
The city is seeking additional grant help from the state based on the need to move the existing plant out of the floodplain and the additional costs that represents.
Council members also took action to call for bids by July 29 for the demolition of the vacated city hall building and two adjacent structures. They are to be razed as part of the flood mitigation work on Prentice Street downtown. The city will also accept bids until Aug. 12 for the restoration work at the site.
The decision to split the project into two components was designed to increase opportunities for local contractors to participate in the project, Lavin said.
The total costs for razing the structures and renovating the three properties is estimated at $340,000.
Monday's council meeting was the first regular meeting in the new City Hall. An open house is scheduled for July 20.
The city will also be holding an auction at 4 p.m. July 20 for items from the old city hall.