Small Cities okays release of funds for new well, housing rehabilitation
The City of Mountain Lake has learned that, effective Thursday, July 10, it has received the authorization to commit the funds provided by the Department of Employment and Economic Development (DEED) Small Cities Development Plan (SCDP), along with Public Facilities Authority (PFA) offices to the project of building a new well – Well #7, the digging of a raw water line from the property to the water treatment plant and the closing of several old, low-producing wells, as well as for the rehabilitation of approximately 20 owner-occupied homes.
Well Construction
The grant the city received from the SCDP is for $450,000, along with a $237,600 grant/loan from PFA is for the digging of the new well – Well #7 – on Utility-owned property on the north edge of Mountain Lake, the digging of a raw water line from the property to the water treatment plant and the closing of several old, low-producing wells.
In addition, the Mountain Lake Economic Development Authority (EDA) is contributing $100,000 to the well construction. The funds contributed by the EDA – called “program-income” – resulted from situations where property owners were required to repay portions of previous SDCP grants.
While reviewing the city’s application, PFA recognized that the current average water bill for Mountain lake residents is at the top of the affordable range for moderate income customers. Adding the cost of repaying another loan to the bill would make the bill unaffordable. Because of this, PFA responded with funding that is 80% grant – and 20% loan. Only $47,532 will need to be repaid to the PFA.
Mountain Lake’s higher-than-average water rates are due to the construction of the $3,000,000 drinking water treatment plant in 2003 and 2004, the cost of maintaining the reverse osmosis filter at the plant and the replacement of old water mains as part of the 2006 – and also the 2012-2014 – Utility and Street projects.
The digging of a new well has been a top Utility Commission priority. Earlier attempts to locate a suitable source of water on city property ended up unsuccessful. In 2013, the Utility purchased the former Boldt’s Watercare site just north of Mountain Lake off of Cottonwood County Road #29 after test boring proved there was water on the property.
This project was bumped up to urgent when production at two of the city’s wells dropped this past January 2014 – and still has not returned to normal.
Housing Rehabilitation
The SCDP also granted the city $366,000 for the rehabilitation of approximately 20 owner-occupied houses. Rehab activities will include correcting structural deficiencies and code violations, improving energy efficiency, health and safety concerns and accessibility. Additionally, homes will be tested for lead paint, mold, radon and asbestos.
The grant will provide 80% of each project’s cost. The remaining 20% will be drawn from a variety of sources, including owner funds, bank financing, Minnesota Housing Finance Agency (MHFA) funds, weatherization, Energy-Related Repair funds and Lead Hazard Control grants.
These SCDP funds will be secured with a 10-year 0% interest deferred loan. All of the loan will be repaid if the client sells the home within the first year. Thereafter, a reduction of 10% per year will be applied to the payback amount until 10 years have passed, whereupon the loan is forgiven.
The target area for housing – the western half of the city – was selected because a large number of those returning the Fall 2013 SCDP questionnaire were low-to-moderate income homeowners living that part of the city. Priority will be given to homeowners in the target area who indicated an interest in housing rehab.
If there is a shortage of those applicants, other applicants from the target area will be given the opportunity to apply. If there is a shortage of applicants in the target areas, homeowners in other parts of the city will also be able to apply.
Homeowners interested in housing rehab should watch for future SCDP informational meeting announcements.
