Milaca city leaders want the Mille Lacs County Board to reconsider a cost-sharing plan for a storm and sanitary sewer reconstruction project that’s undergone a significant cost increase.
The County State Aid Highway 2 and County State Aid Highway 32 street reconstruction project within the city was originally estimated to carry a $200,000 local price tag.
Last week, city leaders wanted to know why that figure had ballooned to $628,000 as they peppered Mille Lacs County Public Works Director Holly Wilson and Mille County Engineer Bruce Cochran with a number of questions.
The key point of contention rested upon the answer to a simple question.
What’s a fair way to share storm sewer replacement costs when the infrastructure in question involves a municipality and a county?
Wilson said she previously met with City Manager Tammy Pfaff and City Engineer Phil Gravel to discuss cost for the project, which can’t go out for bids until Milaca signs off on project documents.
According to Wilson, the major reason for the large cost increase involves the condition of storm sewer pipes that are being replaced. Water main replacement
“Together, all of those things unfortunately are adding up to significant amount of money that was not necessarily anticipated by us nor by the city,” Wilson said.
Mayor Pete Pedersen didn’t waste any time expressing his displeasure with a more than $400,000 increase in cost for the city. He wanted to know why Milaca was responsible for storm sewer segments associated with the project.
“Regarding storm sewer costs, the typical industry standard is to separate the storm sewer costs based upon drainage area,” Wilson explained. “Our engineer calculated the drainage area for the city versus the county. That’s how the costs were split out.”
Cochran said that county drainage area is essentially the right of way for the state highway. The city’s drainage includes areas outside of the right of way that contribute to storm sewer flow.
Gravels said some city streets drain to Second Ave. S.E.. He stated the county’s engineer calculated about 70 percent of that area runs off of city property and the remainder runs off county right of way.
“The city does contribute to a lot of the runoff to the storm sewer system that’s in the county road,” Gravel said. “That main runs from east to west and discharges by the school. The city’s share of the whole drainage area is 70-some percent. It’s their road and pipe, but we put that much water into their system,” he added.
Pedersen wasn’t happy with either explanation, even suggesting that the city start charging the county for water hitting local mains.
“What’s the difference here?” Pedersen asked. “It’s their road. I’m totally against all of a sudden looking at $400,000 in additional costs, when in September, we were told $200,000.”
Gravel said he and county public works and engineering staff were all expecting a much smaller number. “There’s a lot more replacement than they anticipated, and a lot more cost,” he said. “The issue becomes, how do you share that cost?”
Council Member Norris Johnson asked if a televised inspection had been completed of the city’s storm, sanitary sewer, and water utilities.
Public Works Supervisor Gary Kirkeby confirmed that task had been completed last spring.
“Two-third of the pipe that was inspected falls is in the category that will fail in two to five years,” Kirkeby explained. “It does need to be replaced. Some of the issue here involves expensive catch basins that go with the different types of sidewalks. It’s my understanding those sidewalks need to be compliant with Americans with Disabilities Act requirements.”
Norris and Council Member Dave Dillan wanted to know what information had changed since last spring, and why the city’s cost for the project would increase.
“In past projects with other municipalities, we’ve shared catch basin restoration and manhole adjustment costs without knowing the condition of what we had,” Cochran said. “The intent was to apply that same philosophy here, before we had all of the information and we knew the condition of the storm sewer system.”
Mille Lacs County hasn’t put in ADA-compliant ramps in anywhere yet, and the work in Milaca is the county’s first such project, Cochran told the council.
“We are doing a lot more things than we’ve ever done before for the benefit of everybody in the city of Milaca,” he added.
Dillan replied, “I think everybody gets that, but you had the sewers televised last year. We knew about ADA. It’s really going to be hard to tell residents there’s going to be a $400,000 jump in the cost of this project. I have a hard time telling taxpayers that. Maybe the county is fine with that, but I have a hard time with it.”
Wilson said Mille Lacs County assesses residents for ditch drainage, but not for streets. “It’s two different things,” she said. That prompted Pedersen to ask about the number of properties that had ditch drainage taxation. Wilson replied, “They are not affected by a ditch. I don’t have that number.”
Additionally, Wilson said Mille Lacs County roads don’t have curb and gutter.
Pedersen wanted to know what the county was doing regarding its ditches.
“The drainage for county roadways goes into the ditch, down to the right of way,” she explained.
Pedersen wanted to know who pays for that type of drainage. Wilson said the county did, leading Pedersen to reply, “So, what’s do different about our project?
Cochran explained that Mille Lacs County is serving areas outside of the public right of way. Pedersen: “You are trying to tell me no additional water flows into county ditches?”
Cochran said the county doesn’t set up its ditches for side agricultural drainage.
“This is a municipal project, and a state aid project,” Wilson explained. “We have to meet state aid requirements. The cost of the drainage is based on what’s being drained from city streets to the county, within the city limits of Milaca. So, it’s not really comparing apples to apples when you compare a county project to a municipal state aid project.”
Norris said the only new issue in his mind involved no new information coming forward that would justify a change in the numbers.
“Why wasn’t the city told it was going to cost $600,000-plus,” he asked.
Cochran replied, “We didn’t have a storm sewer design or an engineer’s estimate, or a drainage study done,” Cochran said.
“This really screws up our budgeting and levy process,” Norris said. “This is far and above what it will cost to maintain our other streets. If we would have had that larger number last fall, we probably would have made different decisions.”
Wilson said as soon as Mille Lacs County received estimates from its engineering firm, she set up a meeting with Pfaff and Gravel to go through the cost changes.
“As soon as we knew those numbers, we brought it to their attention,” Wilson said.
Wilson said she and Cochran didn’t attend last week’s Milaca City Council meeting to negotiate.
“Our board hasn’t given us any direction on negotiating,” she told the council.
Pedersen replied, “There’s no way that the city should pay for this. I don’t think other cities do. I just got information that Foley did a similar project, over in Benton County, and they only paid for 25 percent of the total project cost. You are asking us to pay for 75 percent to manage water that’s running off of our side streets into your storm sewer.”
Pedersen wondered again if it was time for the city of Milaca to start assessing Mille Lacs County for managing runoff in other locations.
“The other thing is the city could just say no, and not do this,” Pedersen said.
Pfaff told the council they could decide against signing off on the county’s project plans.
Pedersen said he would not accept what was presented by Mille Lacs County and the cost of $628,000.
Cochran said the county was trying to work with the city to replace sanitary storm sewer, water infrastructure, and lighting.
“The county is paying for the project design, we are paying for the removal and restoration, we are paying for the plans, and for the contract management, we are financing the project, and we are doing the inspections.”
Pedersen sharply replied, “But it’s your street!”
Cochran agreed, but pointed out the roadway in question also contains city utilities.
Wilson replied, “We understand the concerns expressed by the city council with the increased costs. We also struggle when costs come in higher than estimated. But in the big scheme of things, for the city, in the long run, this project is much cheaper partnering with the county than you doing it yourselves.”
Wilson explained once again that the drainage area is the main reason the city has a larger financial obligation for the project.
Gravel said he met with city staff a couple of weeks ago and there isn’t a lot that could be cut or removed from the project to save costs.
“This is an estimate based on a concept, and I think we better change the estimate or change the concept,” stated Council Member Cory Pedersen. “Seventy-five percent to the city is very unreasonable at this point, regarding the discussions that we’ve had and the information that we’ve been presented.”
Pfaff told Milaca City Council members they were at an impasse, unless the Mille Lacs County representatives wanted to take the project back to their board for reconsideration.
Cochran asked Pedersen to define an equitable share percentage for the project.
“I think its should be 75 percent for the city and 25 percent for the county,” Pedersen replied. “It should be flipped. It’s your storm sewer.”
Wilson reminded city leaders and staff that Mille Lacs County could not take this project out for bid until the city gave it’s approval.
“We need your signatures on the plan sheets, and it sounds like we aren’t in agreement,” Wilson concluded. “But the longer we wait to get this out to bid, the more it’s going to cost.”
Pedersen suggested a special meeting of the city and county to resolve the issue.