State funding package for water treatment facility arriving by year’s end


The Pipestone City Council signed-off on the documents that will finance the water treatment plant that’s under construction on the city’s north side.

The city of Pipestone’s new water treatment facility is starting to develop a skyline, as can be seen in this photo above looking north at the job site from the access road behind Good Sam.

“This is the final action required from the council for the water treatment plant financing package,” said Jeff Jones, city administrator, during the council’s Dec. 4 meeting.
The sign-off commits the city to a 30-year loan from the Minnesota Public Facilities Authority (PFA) for $8,373,350 at 1.5 percent interest. The loan is in addition to the $7 million grant the city will receive through the state’s Point Source Implementation Grant program.
The total cost of the project is $16,045,200.
As a prerequisite for the financing package with PFA, the council had passed a schedule of water usage rate increases in October, effective beginning in 2018. The PFA required the commitment to generate the revenues needed to repay the loan.
With the paperwork signed, the actual money is expected to arrive by year’s end, Jones said. The city will use some of the money to pay off the short-term loan it received from three local banks to bridge the gap between contractor bills coming due and the promised state financing not yet arriving. The bridge loan was for $3.5 million at 4.85 percent interest from First Bank and Trust, First Farmers and Merchants National Bank and First State Bank Southwest.
City Councilor Dan Delaney cast the only dissenting vote for the water treatment plant financing package. Delaney always votes ‘no’ on water treatment plant issues, and several times has reiterated why that is the case, as he did Dec. 4: he’s in favor of clean water and believes it’s the city’s responsibility to provide that service, but he had neither been in favor of the scale and cost of the water treatment plant that’s being constructed, nor of the plant’s location.