Water project progressing well

City officials received a lot of good news at their Monday, July 6 meeting. Wade Senger of Interstate Engineering noted that interest rates have dropped dramatically since the city began work on the water infrastructure project, which could save the city as much as $50,000 per year.

Senger explained that the interest rate was capped at 3.125% when the USDA-Rural Development awarded the city funds for the project in October 2018. The annual payments for the $4.7 million loan were estimated to be $209,000 at that time. However, in the third quarter of this year, the rate has dropped to 1.5%. Therefore, if the city expends all the funds and closes out the loan by Sept. 30, they can lock in the lower rate. As a result, the city's loan payments would decrease by $50,000 per year to $159,000. Over the course of the 40-year term, the city will realize a significant savings, which eases some of their budget concerns for the future.

Senger also gave an update on all three parts of the project. First, the water main replacement is about 2/3 complete. BEK submitted progressive estimate #6 totaling $511,272.90, which was approved for payment.

The water tower rehabilitation is expected to finish below budget and ahead of schedule, Senger said. Originally Classic Protective Coatings planned to have the repaired tower functioning by early August. At this point they expect to be a couple weeks ahead of that. Their bill was $370,701.87 for work completed in June. Work on the inside of the tower is complete, and crews are finishing necessary tests. The final coat on the exterior was put on this past week.

The advertisement for bids is out for the water treatment plant upgrades, the third phase of the project. The bids will be opened on Monday, July 20 at 3 p.m., and the meeting will be streamed online. The land purchase is nearly complete, as the city proposed to purchase 10 acres of land from the Russell Weber estate at a cost of $30,000. City Attorney Peterson has drafted the necessary documents and sought clarification on how to handle the billing for the hard costs associated with the deal, such as the abstract update, survey and legal fees. The city will pay the $30,000 separate from the closing costs, which they will pay directly to the creditors upon receipt of bills. The land will be used as a holding area for wastewater cast off by the reverse osmosis treatment process.

Public Works Superintendent Bruce Hirchert reported that another water break had occurred near the water tower on June 20. There are two blocks with cast iron pipe in that area that hadn't been included in the replacement project. Hirchert said that since the project is under budget he would like to see those two blocks replaced as well. One street is gravel and the other dirt, so the cost would be cheaper to complete with no pavement to replace.

Yri Electric finished installing the new generator at the water plant this past month. Residents experienced a two-hour water outage as the generator was connected to the electrical system.

Commissioner Ryan Hager made comments about conditions at the Reservoir west of town. He said the concrete tables are deteriorating or have been damaged, and there are holes in the trail and steep embankments. "It needs a lot of attention, there's no doubt about that," Hirchert acknowledged.

Naastad Brothers approached the city with a settlement for costs they incurred when working on U.S. Hwy. 281 last fall. Crews damaged seven private water service lines along the highway, as city officials were not aware of their location, and therefore did not mark them during the One Call. Initially, the bill was $87,000, which also included a sewer issue near CenDak. As the city was not party to the contract, Naastad Brothers negotiated with the NDDOT. The $14,500 they requested from the city represented the costs they could not recover from the NDDOT, and particularly involved repair of the water service lines damaged. President Stu Richter said he thought the settlement was fair, as the city as a good relationship with Naastad Bros. "We're going to need them again," Richter posited. The $14,500 will be paid from the city's infrastructure improvement fund.

The city has one payment remaining on the U.S. Hwy. 281 project. To date they've paid $132,588 of the projected $192,000 cost. The frontage roads were paved in June. Hirchert mentioned to commissioners that the crosswalk on the east side is a mere 4.5 inches from the frontage road, and he is concerned that vehicles will drive over the edge of the concrete when navigating turns on and off the highway, causing damage. The crosswalk was installed at the city's request and is therefore their responsibility to maintain, Hirchert said. He will address when they do the final walkthrough with the contractor and NDDOT.

Richter told commissioners that Eddy County Commission chair Dave Gehrtz had requested that the city's policing contract increase by 5%, due to additional costs they will incur for the 911 system through the Lake Region Law Enforcement Center. The increase would cost the city an extra $607 per month. Auditor George Ritzke replied that the League of Cities had advised cities to plan for a 20% decrease in their budgets for 2021. Ritzke noted, however, that city sales tax hadn't taken the hit he expected due to coronavirus and economic factors. However, the gas tax revenue is down, and state aid is expected to dip as well. Hirchert said the only item he's budgeting for is a new pickup. The cost was in the 2020 budget, but he decided to wait a year and use the available funds to repair the roof at the Brown Memorial.

The city also approved five residential building permits, one housing incentive application and one local gaming permit.

The next regular meeting will be held on Monday, Aug. 3 at 7 p.m.