The Clearwater City Council Monday voted to move ahead with a water and sewer rate study at a cost of $9,500.

 

Administrator Kevin Kress said he discussed the idea with Minnesota Rural Water Association after recent discussions by the council about refinancing the existing sewer bonds.

 

“The recommendation I got was regardless if we do a refinancing, they suggested we do a rate study to get the water and sewer funds back in line,” he said.

 

Kress said he received three quotes to do the study. AEM’s quote was $9,500, with the study being completed in 60 days.

 

Northland Securities’s proposal was $8,000 based on 40 hours, plus $200 per hour for any additional services.

 

The quote by Ehlers was $15,000.

 

The council decided to go with AEM because of the unknown extra billing hours Northland might charge.

 

“We’re still going to end up working with Northland Securities because they’re our bond consultants,” said Kress. “They’ll have to redraft the bond if we do the refinancing.”

 

Councilman Kris Crandall asked if the study would affect the council’s decision to move ahead with the bond refinancing.

 

“If we do a rate study, are those numbers going to help us improve our understanding whether or not we’re going to have some impact if we do a refinance or not?” he asked. 

 

“That’s the whole point of doing the rate study,” said Kress, “to figure out where we should be now and if we do the refinance, where the rates moving forward will have to be to support the infrastructure.”

 

Crandall said he felt it was worth $9,500 to know whether it was worth going through an expensive refinancing process. Extending the loan will save the city more than $200,000 a year in debt service. It would also add about $780,000 in interest over the life of the bond. It was unclear what impact the refinancing would have on water and sewer rates.

 

“This is money well spent for us to have a better understanding,” he said, “which is the one thing we don’t have right now.”

 

The council approved an agreement with Bolton & Menk to develop an Annexation Area Utility Master Plan at a cost of $22,500.

 

The goal is to determine what the city needs to do to prepare for future expansion into Clearwater Twp. and Lynden Twp.

 

The study will include alignments of water and sewer lines, evaluation of water supply and sewer capacity, and associated costs for expanding utilities.

 

“It should give you a very good idea of what you need to do to go into some of the annexation areas in Clearwater Twp. and Lynden Twp.,” said Kreg Schmidt of Bolton & Menk. “When you’re looking at serving annexation areas, there’s a lot of factors that come in to play, and to know what those costs are perhaps even ties into the rate study.”

 

Schmidt said the plan could be ready about the same time the utility rate study is completed.

 

The council waived up to four special event permit fees for the Clearwater Legion and the Clearwater Fire Auxiliary during the rest of the calendar year.

 

The Legion will next host a music event as part of the Homeless Vets Run Aug,. 27 and will close off part of Pine Street for the day.

 

The next event for the auxiliary will be the fire department open house Aug. 6.

 

The council approved the expenditure of up to $350,000 of sales tax money for the purchase and installation of new playground equipment for Eldorado Park.

 

The council approved the purchase of a Bandit 990XP wood chipper from Tri-State Bobcat at a cost of $40,715.

 

RDO Equipment had a lower bid of $34,355 for a Vermeer BC1000XL, but the council chose the Bandit model because of more horsepower and other features.

 

The council approved the expenditure of $74,313.64 to Pearson Bros. for chip sealing various city streets. They also selected Metro Asphalt & Concrete Services to do crack filling at a cost of $8,7440.

 

In other action the council:

• Appointed Kathryn Landva and Gayle Yurch as election judges for the November general election;

 

• Adopted liens for unpaid utility bills for 23 properties;

 

• Approved a special event permit for Pam Sawatzke to close part of Eighth Street in the Cedar South Development for an outside music event Aug. 6.