The Austin City Council unanimously approved the bid of Rice Lake Construction Group of Deerwood, Minnesota of $100,008,000 for the city’s wastewater treatment plant expansion and phosphorus reduction project at their regularly scheduled meeting Monday evening. Rice Lake Construction Group was one of three bidders for the project, and Public Works Director Steven Lang stated to the council in a memo that the project involves construction of an activated sludge system, which will require the demolition of existing processes, modifications to existing processes and construction of new treatment systems.
In other agenda items pertaining to the wastewater treatment plant expansion and phosphorus reduction project, the council approved an amendment to the city’s wastewater treatment plant agreement with Hormel Foods. Lang stated to the council that the agreement is an amendment to the 30-year wastewater treatment agreement signed by Hormel Foods and the city in 1995. The project will be commissioned by the city of Austin, and Hormel will pay their 45.8% portion of the construction costs totaling $52,630,368. Lang added that although Hormel is paying for their share of the construction project, the city will always retain ownership of the wastewater treatment plant, and he went on to state that Hormel Foods have announced that they are in agreement with the terms of the amendment pending council approval, which took place on a vote of 6-0, with councilman Jason Baskin abstaining from the vote.
The Austin City Council also unanimously approved sanitary sewer rate adjustments to help fund the 54.2% of the domestic costs for the project. Lang stated to the council that the city will utilize state grants, a public facilities authority, or PFA loan totaling $39 million and wastewater treatment plant fund reserves to help fund the domestic portion of the costs. He went on to state that together with yearly costs for domestic plant operations, sewer collection department and sewer collection capital improvements, the city needs to generate approximately $8,025,000 per year. In 2022, Lang stated that the city’s sewer user fund is projected to generate $5,330,000, and to generate the needed funds, sewer rates will increase 15% in 2023, 10% in 2024, and 7% in both 2025 and 2026. Lang went on to state to the council that the rate increases, together with the use of $1.9 million from the wastewater treatment plant reserve fund to cover shortfalls from 2023 to 2025 will then generate the estimated required revenue of $8,032,871 in 2026.
In other business, the Austin City Council approved a construction services contract for the wastewater treatment plant project with SEH, Inc. totaling $5,190,000. Lang stated to the council that construction on the project is expected to start in the spring of 2023, and the work will continue until the spring of 2026, with an estimated completion date of June of 2026, or approximately 46 months. The council approved the agreement on a vote of 6-1, with councilman Geoff Baker casting the lone dissenting vote. The council also unanimously approved a material testing contract for the project with American Engineering and Testing, as the firm submitted the lowest of three bids for the project of $269,300.
The next regularly scheduled meeting of the Austin City Council will be held on Monday, August 15th.