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Major infrastructure needs addressed in Olivia

Project Engineer David Palm, of Bolton & Menk, addresses those in attendance at the public meeting in Olivia. Palm said the estimated $20.8 million project is aimed at replacing aged and deteriorating infrastructure. Tribune photo by Tom Cherveny

OLIVIA -- Property owners in Olivia got their first look Wednesday at what a proposed $20.8 million investment to rehabilitate aging infrastructure in the city might cost them.

An estimated $4.7 million of the total costs would be assessed to approximately 450 different parcels in the project areas. Nearly 90 people gathered at a public hearing Wednesday evening at the Community Center to hear about the projects and view spreadsheets pasted on the walls showing the estimated assessments for their properties. The possible assessments varied by property and type of work proposed in each area, with the estimates ranging from hundreds of dollars to several thousand per lot.

Some residents in areas where the entire combination of work -- storm, sanitary, water and street -- is undertaken would see sizable assessments.

"I'm not saying $18,000 is too much to pay,'' said Bob Vesterby, a West Ash Avenue resident. He asked for assurances that the project would resolve issues with backed up sewers.

The projects range from rehabilitating the wastewater and water treatment plants and water tower, replacing aged sanitary and storm sewer lines, to rebuilding streets and sidewalks. The work includes building a 12-acre storm water retention pond and eliminating "bottlenecks'' in both the sanitary and storm sewer system in the community.

The city needs to replace aging infrastructure, according to David Palm, project engineer with Bolton & Menk. He and city officials noted that the storm and sanitary sewer to be replaced is 50 to 75 years in age, and deteriorating.

The problems are many: An aging water line built of cast iron is brittle and has lead-filled joints and fittings. Storm sewer lines are the original clay pipes and are cracking, infiltrated in areas by tree roots, and have open fittings. Sanitary storm lines are similarly cracked and open, and infiltration by groundwater and inflow during storm events can overwhelm the wastewater treatment plant.

Flows to the wastewater plant can surge from 350,000 gallons a day to 1.5 million gallons a day, according to Palm.

The city has been identifying its problem areas and infrastructure needs over a five- to 10-year period to develop the current proposal, according to Dan Hoffman, city administrator.

The city has the option of doing all the improvements as one project, or breaking it up into components and delaying work over a longer time frame.

"The work isn't going to go away. It's just going to get delayed,'' said Palm of the options facing the city.

The city is optimistic that it can obtain very competitive bids by letting the project at once. It also believes it has the best opportunity right now to obtain low-interest financing. It is hopeful of obtaining United States Department of Agriculture Rural Development monies to finance $4.6 million of the total, and state Public Facilities Authority monies for more than $15.2 million. The low interest rates possible for those funds -- possibly fixed at 3 percent or less over 39 years -- mean the estimated project costs total $29.5 million.

The city would have an estimated annual debt load of $899,600 under this scenario for 30 years. The city's property tax levy for debt service is currently $365,000 per year, and would remain at that level in the upcoming years with the project. The city would apply revenues from the assessments, water and sewer fees and transfers from the electrical fund toward the debt annual service.

If the project was broken into components and carried out over future years, the overall costs would be much more, with estimates ranging to $39 million, according to the engineer.

Council members will decide what to do in the weeks ahead. They will need to have things ready by March 29 to meet deadlines for obtaining the financing and letting the project this year. Palm said the work could begin in July and would likely continue to September 2013.

Tom Cherveny

Tom Cherveny is a regional and outdoor reporter with the West Central Tribune in Willmar, MN.

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