Estimated cost of project rises
$181,000 in budget adjustments needed for infrastructure work
Thursday, April 11, 2013 6:22 PM
MENOMINEE - The Menominee City Council will be asked to approve a budget adjustment for infrastructure work on 13th Street between 26th and 30th avenues. City Manager Michael Cramer explained to members of the Wastewater Utility Board that $141,000 would be needed from the Wastewater Fund balance and about $40,000 from the Water Fund balance to support the project.
The adjustment became necessary when a 27-inch main had to be improved increasing the total cost by just over $100,000. Although over the original budget, there is money on hand to pay for it.
"The Wastewater Utility Fund has approximately $1.4 million in the fund balance that is unrestricted. The Water Utility has approximately $970,000 that is unrestricted," said Cramer.
A second road project will also take a chunk of change to update underground plumbing. The city will be making improvements this spring to 14th Avenue between 13th Street to as far as West Drive. Plans call for 5,000 feet of water main to be replaced at $385,000. Other expenses include 26 valves, 11 fire hydrants, home water service laterals, 31 new water services and more. The total cost for water improvements including material and labor is approximately $565,000 for the water portion.
The wastewater improvements will add another $490,000 to the cost that must be picked up by the city. Work will include slip-lining most of the existing sewer main, and replacement of nearly 800 feet of 18-inch main. By slip-lining the majority of pipe, the city will be able to save the large trees on the south side of 14th Avenue. The project will also include 63 sanitary sewer laterals and 10 new manholes. A more exact bottom line on its cost is expected once the bids come back in June.
Cramer said there are a couple options for ways to fund the projects.
"First would be that we could go and reduce the fund balance to cover those expenses," he said. "The would drop our fund balances down pretty significantly; to the point where we would have the water utility at about 30 to 33 percent of the fund balance and the wastewater would be about 65 percent."
Another option would be to request the council to seek bonding or a loan. However, Cramer said a low interest loan from the USDA may be questionable because of the amount of money the city has sitting in its fund balance. If the city opted to go with a bond sale with a pay back of 20 to 25 years, its likely residents would be facing rate increases.
"Right now we are very close to our top," said Cramer. "We are not bringing in enough revenue to cover all of our expenses, so adding on another debt service would make that worse."
Cramer said a decision did not have to be made immediately and that members could take a while to mull over the options and come back next month and hash out a plan of action.