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Serving Northern St. Louis County, Minnesota

Costs rising rapidly for water treatment plant

Marshall Helmberger
Posted 3/1/23

TOWER— Delay has proven costly for the Tower-Breitung Wastewater Board’s long-planned new drinking water treatment plant and members of the board talked about a path forward at a special …

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Costs rising rapidly for water treatment plant

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TOWER— Delay has proven costly for the Tower-Breitung Wastewater Board’s long-planned new drinking water treatment plant and members of the board talked about a path forward at a special meeting held Feb. 17.
Three years ago, the announcement of a $3.375 million grant from the Army Corps of Engineers seemed to ensure the project would move forward. The new plant, estimated at the time to cost $3.4 million, was the primary focus of a broader project that Tower officials hoped would also include installation of a new water main to replace the city’s aging connection to its drinking water supply. Between the Army Corps funding and anticipated help from Iron Range Resources and Rehabilitation and some state bonding dollars, TBWWB and city officials were excited at the prospect of completing both parts of the overall project without incurring significant debt.
Nearly three years later, however, the project remains in limbo as bureaucratic delays at the Army Corps and last year’s failure of the Legislature to approve a bonding bill have tied up funding. Meanwhile, the pandemic-fueled spike in inflation, particularly in the cost of construction, has only exacerbated the problem by driving costs much higher. SEH engineers Jason Chopp and Kevin Young outlined the latest engineer’s estimate, now pegged at $5.5 million for the drinking plant alone, an increase mostly driven by the rising cost of the treatment equipment, which is now $500,000 more costly than prior estimates. SEH representatives offered no update on the city’s water main project, which appears on the shelf for now barring unexpected new funding. That project, originally estimated at about $1.1 million, would undoubtedly come in higher today.
TBWWB officials are holding out hope that both projects could still move forward, depending on whether they can convince the Army Corps to increase its funding allotment and if they can obtain additional state bonding support. Mike Larson, of SEH, said both outcomes are possible, noting that the Army Corps had awarded its funding based on 75 percent of the total project cost. With the project estimates now far higher, both Larson and wastewater manager Matt Tuchel said the Army Corp officials they’ve spoken to seem open to the possibility of boosting their funding support.
Larson said the TBWWB’s latest bonding request was increased to $2.25 million, but whether that new higher level is ultimately funded remains to be seen. He said last year’s bonding request, which the Legislature never approved, had included $1.5 million. Legislators have discussed the possibility of approving an earlier bonding measure using last year’s framework and Larson said that could happen as early as next month. Yet, given the rising costs, last year’s bonding request would still leave the wastewater board short of funding.
“If the bonding bill and Army Corps both increase, we would have enough for the water main as well,” said Tuchel.
“That’s a couple of big ifs,” said Tower Mayor Dave Setterberg.
“We’d be jumping for joy if both of those things happen,” said Tuchel.
Meanwhile, the Army Corps funding, even at current levels, still isn’t available more than two years after their announcement. Corps officials did send the city of Tower a draft of a project funding agreement earlier this month, but the city has yet to sign the agreement, for which it will serve as fiscal agent on behalf of the TBWWB. At the same time, the Army Corps has just started an environmental analysis of the project, a task they say they hope to have completed in about six weeks. But city officials and SEH engineers aren’t holding their breath given the past Corps’ track record.
Should sufficient funding fall short, the city and the TBWWB would have to weigh whether to fill the gap with a hefty loan from the state’s Public Facilities Authority, which could substantially raise water rates in the two communities to cover the debt service.
There’s more than one downside, however, should the project fail to move forward. The wastewater board has already spent about $253,000 on engineering and design of the project, funded by a temporary loan, which the city council and the TBWWB opted to extend this month. If the project moves forward, that debt can be rolled into the total project funding. If not, however, ratepayers in Tower and Soudan will be stuck with the cost of repayment, without the benefit of improved drinking water.

Project benefits
The new drinking water plant, if ultimately built, will help ensure that the two communities continue to have safe drinking water. While Tuchel said that all the drinking water that leaves the current plant is fully treated and safe to drink, he noted that he has had to regularly monitor for other contaminants that are byproducts of the decontamination process, and the TBWWB has experienced occasional violations of those contaminant levels.
The communities’ drinking water has been getting additional treatment since the completion of a ewellhead protection study several years revealed the presence of surface water contamination in the wells that serve the two communities.
Under current state rules, the TBWWB’s drinking water is now considered a surface water source, rather than a groundwater source, and needs to be treated to a higher level than the current plant was designed to do. Tuchel said the state’s Health Department is aware of the situation but hasn’t taken action against the TBWWB because they are aware the communities are working in good faith to address the issue. He hinted that could change, however, if the project were put on a long-term hold.
At this point, Tuchel said moving forward with the drinking water plant is critical and he suggested possible changes to the project scope if necessary to reduce the cost. The current design calls for a 250-gallons-per-minute capacity although Tuchel said that could be reduced to 125-gallons capacity to trim the cost of the project, if needed. That would likely be sufficient most of the time, but it could fall substantially short during periods of peak demand, at which point, the older plant could be utilized to bolster capacity.
It’s kind of do or die right now,” Tuchel said. “We have to make this go. I don’t think holding off is going to benefit us at all.”