New bonds to finance various city projects

The Cottage Grove Armory is among the projects included in bond financing.

Several city projects are set to begin after the completion of bond financing last month.

On Sept. 25, Cottage Grove municipal bonds were offered to the public. The total bond par amount was sold at $6,765,000 with a yield (annualized interest cost for the city) at 1.8601 percent.

The 2019-20 city budget had already called for several projects to be financed. Specifically, a water treatment plant upgrade of $1 million, wastewater effluent infrastructure projects at $3.2 million and wastewater infrastructure improvements of $1.4 million.

City councilors voted unanimously Sept. 23 to award a bid to contractor Pacific Excavation for the expansion of the Row River Water Treatment Plant.

The plant’s expansion will increase capacity by two million gallons per day. Currently, two existing systems of membrane racks provide a total of four million gallons of water per day to the community.

“The city uses about three to three-and-a-half million gallons of water per day,” said City Engineer Ron Bradsby at the council meeting. “If one goes down, we will not have enough racks to filter the water, so it’s providing redundancy in the existing system and will help with growth.”

Meanwhile, projects to improve wastewater effluent infrastructure have nearly finished the design process.

The upgrades will include a 12-million-gallon pond and piping which will allow effluent to reach Bohemia, Coiner and Trailhead parks. The increased acreage for effluent irrigation will go a long way in appeasing the city’s drive for “greener” standards, said City Manager Richard Meyers.

 “That’ll be huge,” Meyers said. “It’s creating reuse and avoiding that impact on the environment as much as we can by putting it back so the plants are using it.”

The city’s use of Middlefield Golf Course to release effluent currently serves this purpose, though the city’s limited capacity to deal with heavy inundations of rain has recently seen the city fined by the Department of Environmental Quality as excess water must flow into the river, raising the river temperature above the maximum allowance.

“We were point-something more than what we were supposed to be and that’s a permit violation,” said Meyers.

General wastewater infrastructure upgrades will also see the city increase its ability to deal with inflow and infiltration into the city’s sewer system, ultimately improving the system’s capacity and longevity.

In addition to these previously budgeted projects, the city has included water meter upgrades of $1.1 million and improvements to the Cottage Grove Armory of $1 million as part of the bond financing.

Water meter upgrades will change manual water meters around town to an automated system, a process which may take more than a year, but will greatly increase accuracy.

“When we go out and read a meter, it’s only as accurate as the human eyes that are looking at it and their fingers,” said Meyers.

More accurate reading of water meters and less labor hours are expected to reduce cost to the city and consumers.

While the Armory’s $348,000 budget for the fiscal year (largely revenue from grants and fundraising) has already been put to use, the additional $1 million from bond financing will be put toward drafting architectural designs for the building’s remaining projects. Certified design plans will increase the possibility of further grant funding.

The inclusion of water meter upgrades and Armory improvements in the bond financing was part of an effort by the city to increase bond attractiveness and potentially save on interest rates while capturing costs of the bond issuance.

As part of the process, S&P Global Ratings assigned its “AA” long-term rating to the city’s new series 2019 bonds as well as the city’s previously issued general obligation debt.

A supplemental budget is anticipated to be presented to the city council to provide for the revenue and expenditures of those projects not previously planned for this fiscal year.


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