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4. Memo - Proposed Big Marine Sewer State Bonding RequestPage 1 of 2 City of Scandia 14727 209 th St. N. PO Box 128, Scandia, Minnesota 55073 Phone (651) 433 -2274 Fax (651) 433 -5112 http://www.ci.scandia.mn.us DATE: April 1, 2021 TO: Honorable Mayor and City Council FROM: Ken Cammilleri, City Administrator RE: State Bonding Request to Address the Big Marine Sewer Utility and its Bliss Addition Wastewater Treatment System INTRODUCTION The Bliss Wastewater Wastewater Treatment Plant (WWTP) is part of a pair drainfield-type wastewater disposal systems within the Big Marine Lake Sewer Utility that is owned and operated by the City of Scandia. The Bliss WWTP services 75 homes on the west side of the lake and is licensed to operate under a National Pollutant Discharge Elimination System (NPDES) Permit provided by the Minnesota Pollution Control Agency (MPCA). This facility was not originally designed for nitrate treatment. Only one of the facilities test wells have been returning sample test results that exceed the regulatory threshold of 10 milligrams per liter parts per million (ppm) of nitrate nitrogen. The City has taken steps to attempt to address this issue by introducing operational changes. These changes include the introduction of biologicals into the system to help breakdown the nitrates. The overall results of these efforts have been mixed and have not ultimately addressed nitrate compliance issues. On February 22nd of this year, MPCA released its first draft NPDES Permit to the City highlighting the necessity for the city to introduce nitrate treatment systems at the facility. The draft permit requires the City to complete a Facility Evaluation Report within six months of issuance and lays out two tracts regarding how the City will be required to proceed. The first tract essentially provides the City with an additional 6 months to implement nitrate treatment and requires the installation and drilling of a new test well on site at the cost of $40,000-50,000. The second tract forces the City to proceed with introducing additional nitrate treatment. REQUIRED ACTION The time frame for compliance suggests that we will need to be able to fund this project within a two year-time frame. Currently, the Big Marine Sewer Utility lacks the appropriate fund balance to support any substantial capital costs. The fund’s current cash balance is $47,100. As a result, the City will need to seek funding to help offset these costs. Due to this mandate to introduce treatment in a short time frame, it will be most prudent for the City to make a state bonding request for a grant. Although the state’s grant funding Page 2 of 2 City of Scandia 14727 209 th St. N. PO Box 128, Scandia, Minnesota 55073 Phone (651) 433 -2274 Fax (651) 433 -5112 http://www.ci.scandia.mn.us typically requires a 50% match from the requesting entity, it is critical that the City proceed with a state budget and bonding request for the state’s 2022 bianniam. THE PROJECTED PROJECT COSTS Costs Expense Item $900,000- $1,000,000 Purchase and Installation of Nitrate Pre-Treatment Chamber $350,000 Upgrade Infrastructure at the system’s principle lift station, Lift Station #2 including replacement of well, pumps, and improvements to controls* $30,000 To replace facility flow meters $50,000 For Miscellaneous repairs $1,325,000- $1,425,000 Estimated Total Project Costs $662,500- $712,500 Estimated Share for the City and State * The improvements to Lift Station #2 is in significant need, but could be removed from a grant request if we need to negotiate the request down to support approval and passage of funding. Based on the outcome of direction from the City Council, staff will work with Ehlers to come up with a funding plan for the anticipated City share. This will be presented to the Sewer Committee later this month and to the City Council at next month’s work session. RECOMMENDATION The state operates on a bi-annual budget cycle. Odd years are focused on the state’s operating budget for the next two years. In the even years, the state considers bonding for special projects, this would include this bonding grant request. To improve the odds of potential passage, it is common to introduce state bonding requests in the preceding legislative session. The earlier the introduction, the greater the opportunity to build support with key legislators. With the legislative session formally coming to a close at the end of May, I would like to get authorization to proceed with a legislative ask as soon as possible. It is requested that the City Council authorize a state budget request and bonding request for the Bliss System Sewer Project. It is further requested that one or two City Council Members consider volunteering to assist with this legislative advocacy process. If authorized, we will also be seeking assistance from members of the Sewer Committee. Please let me know if you have any questions.