11-15-2022 Special MeetingNovember 15, 2022
A special meeting of the Scandia City Council was held jointly with the Wastewater Advisory
Committee on the above date with modifications. The meeting was conducted in-person at the
Scandia Community Center and over an electronic platform. All participants who joined the
meeting remotely could hear each other and contribute to discussions.
Mayor Christine Maefsky called the meeting to order at 6:05 p.m. Roll call was taken. The
following were in attendance: Council members Heather Benson, Jerry Cusick, Steve
Kronmiller, Patti Ray, and Mayor Christine Maefsky. Staff present: City Administrator Ken
Cammilleri (remote), City Attorney Chris Nelson, Fire Chief Mike Hinz, Public Works Director
Charles Fischer, Engineer Ryan Goodman, and Treasurer Colleen Firkus. Wastewater
Committee members present were Perry Rynders and Dan Cartier (remote).
SEWER BUDGET DISCUSSION WITH EHLERS ASSOCIATES
Administrator Cammilleri gave an overview of the Uptown and Big Marine Sewer Utility draft
budgets. The focus was on improving the cash position of each Utility to fund needs for repair
and replacement of aging infrastructure. The draft budget presented a combination of rate
increases and borrowing. The need to continue pursuing state funding was stressed as well.
Uptown Sewer is expected to add a new user when the Scandia Heritage Alliance building is
built and the impact on the sewer is unknown at this point. Increasing the service area and adding
more users to the system, which currently has 9 users, would help with building fund balance.
The most pressing challenge is the unfunded MPCA mandate to treat nitrates in the Big Marine
Sewer System. The updated cost projection is $1.2 million. No state funding is available for this
project. American Rescue Plan Act (ARPA) funds are being applied. The balance would be paid
from increased User Fees and borrowing. ARPA funds must be spent by 2024, but the project
does not have to be completed until 2025. The next priority is replacing Lift Station #2 currently
estimated at $350,000. A suggestion to add meters to make User Fees more equitable would add
an additional capital expense of approximately $145,000, as well as software to run it, and need
to be replaced every 15 years.
Jason Aarsvold, a financial advisor with Ehlers Associates, indicated that what was in the budget
is what he recommends for meeting these challenges. The city can and should continue to pursue
grants and state bonding, but should not count on them. The state has a Public Facilities
Authority (PFA) loan program which would allow a longer loan period of 20 years and likely a
more favorable interest rate of I% less than the open bond market. The only downside is the loan
is not callable and therefore cannot be restructured or repaid early. The city could also issue debt
through a local bank. Aarsvold advised that these projects cannot be completed without any
impact on the Utility budgets. The city could push the projects out and save up through increased
User Rates, but would that be more affordable with interest rates going up.
Engineer Goodman stated that the Bliss Nitrate Project can wait until 2025, but the ARPA funds
must be spent in 2024, so it would be advisable to bid the project in the winter of 2023-2024 and
start construction in the summer of 2024. This will also give the city opportunity to pursue other
funding.
November 15, 2022
Scandia City Council
Page 2 of 2
The next Council budget work session was set for November 22, 2022 at 11:00 a.m.
ADJOURNMENT
Ray, second by Benson, moved to adjourn the meeting. Motion carried 5-0.
The meeting adjourned at 6:52 p.m.
Respectfully submitted,
Colleen Firkus, Treasurer