Stacy council weighs the high cost of radium abatement

By Anne Thom—

A gallon of water weighs 8 pounds, but a gallon of drinkable city water can weigh a whole lot more especially when it is on the minds of public officials and citizens in a small community trying to come into compliance with health and safety regulations.

Brett Repulske, area specialist with the U.S. Department of Agriculture Rural Development Cambridge office was invited to meet with the Stacy city Council for a special meeting on May 29 to discuss the water radium issue and finances. USDA Rural Development works with cities of fewer than 10,000 people on improving water quality and funding environmental facilities.

“How much are you going to give us,” Mayor Utecht asked. Repulske responded, “I’m not carrying the checkbook tonight.”

Stacy City Engineer Chuck Schwartz said, “It’s going to be a high cost project regardless.”

Schwartz gave Repulske an overview of the history; there’s radium showing in the Stacy city water supply and the city has to come up with both a way to correct it and the funding to do so. The initial step is to get Stacy on a state Project Priority List (PPL) for funding. Schwartz is working on a pre-application.

A request to be placed on the PPL and that application were submitted today just before a June 1 deadline, along with an analysis of treatment options. The city will apply for 2013 funds.

Stacy has an Aug. 1 deadline to obtain funding and the project must be “fully operational” by 2014.

Meanwhile, MDH requires Stacy be on a compliance schedule with quarterly updates to citizens and the state.

“Their (MDH) overriding message was progress,” Mayor Mark Utecht said.

The city is required to notify the MN Department of Health (MDH) of financial plans as part of their oversight.

Councilor Jim Ness said, “We have to obtain funding by August but how do we know what we are going to need to build.”

Schwartz said they continue to work with MDH on funding to correct the problem, but it will be difficult to know anything as results of water testing to plan for either blending or treatment won’t be done until August.

Repulske said the state regulatory agencies would not penalize the city because they couldn’t afford one of the options. “Take the appropriate steps, show progress and that’s enough to secure the funding,” he said.

In the PPL request water was sampled from a potential fire hall well or treatment site and Royal Concrete, “and all three of them came out really good water quality” Schwartz said. The water samples were obtained from the nearby Franconia and Prairie Du Chien-Jordan aquifers.  Stacy’s water supply containing radium is drawn from the sprawling Mt. Simon-Hinckley aquifer.

The city will have to choose a site that might accommodate both a blending facility and a water treatment plant. The council heard the city could start with the less expensive blending option but then have to build a treatment plant.

The site Stacy is focusing on is vacant land on the south side of the city hall parking lot that abuts the Sunrise River and Carlos Avery. A topographical survey needs to be done. “We want to make sure this is viable site for a treatment plant, if it’s built,” Schwartz said.

The city must contact the MN Dept. of Natural Resources to determine easements. “It’s not as much about what we’re building as how we’ll hold it out of the Sunrise River,” Mayor Utecht said.

Peat soil could increase the cost of construction. The city would not want the building to sink. They also need to work on wetland delineation.

“If blending is an option can we wait to make the decision until we know if we’re getting a grant to build a treatment facility?” Ness asked.

Schwartz said as long as all of those were listed on the PPL the state would be fine with downgrading the plan. He said they are on target to have a decision by August.

“Ideally I would like a treatment facility, but I just don’t see how we’re going to pay for it,” Ness said.

Utecht suggested the city build a test well. Schwartz agreed the city could test water volume and water quality at the same time however, a test well can’t be too close to the location of a potential new well.

“How do we know if we drill a new well that when we open it, it won’t be bad,” Councilor Cindy Bruss asked.

The mayor said they will have no way of knowing. Schwartz said “It is a gamble.”

He added there is no guarantee that drilling a new well for blending would result in a clean water supply indefinitely.

Mayor Utecht advised everyone to keep in mind that Stacy will spend a certain amount, and depending on the grant or financing program there is a related percentage that may be picked up through another funding source. “The bigger the project, the more eligible for assistance we become,” he pointed out.

The council agreed to move forward with a test well. The mayor asked Schwartz if he could delay council approval for this until the June 12 council meeting. A test well will cost approximately $20,000. The council approved seeking quotes for a test well in order to move forward on the project now.

Repulske was able to provide some financial details. He explained his calculations are based on the 2000 census. Stacy had a median household income of $42,026 and a population of 1,278. This puts Stacy at 80-90 percent, of the state income average of $46,993. Repulske said this means Stacy is eligible to borrow at an “intermediate rate.”

The city can’t get a poverty rate because the median income is too high.

The current loan rate attached to funding is 2.75 percent. It’s a loan program with a grant component to keep rates affordable Repulske said. The term is 40 years. The first payment would be due Jan. 1, 2015. The estimated cost of a treatment plant is $2,750,000.

Schwartz said if the income figures seem incorrect, the city could do income surveys. Repulske added they could look at other data if the city had annexed an area in the last 10 years, which Stacy has. Repulske thought an income survey might be needed. He cautioned it is a gamble if the city asks for a survey. If median city income goes down and state median goes up, the city could be in a better position, but it could also reverse. The council agreed the income figures seem high based on one-third of the population resides within the Sunrise Estates Mobile Home Park.

Repulske explained that under the program which uses what he called “an actual user rate structure, up to 1.5 percent of median household income can be collected via levy, assessment or user rates. Repulske noted this means an approximate $52.53 would be levied, assessed or passed along to each user monthly as this is the affordable household rate for water.

“The agency goal is to give you the best rate we possibly can,” Repulske said.

USDA Rural Development money will not count against any other funding the city receives.

If the project costs $2.75 million, a bond for the fixed amount and the grant amount will change depending on the project cost. For example, if the city were to come up with $1,100,000 in source funding, the maximum grant is $900,000.

“The end result is Stacy can only afford so much, you know it, we know it and the Dept. of Health knows it. If we don’t get the money, we can’t build it,” Mayor Utecht said.

“By law we can’t charge our citizens more than $52.53 per month for water,” he said. The mayor said this helps to calculate how much would be passed along to the residents. While any increase will be difficult, “This is a lot more palatable than what I was thinking about,” Utecht said.

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