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Council keeps options open for construction projects
Sept. 6, 2019


DELANO, MN – What will be included in the 2020 Delano street improvement project?

That answer is yet to be determined, as the Delano City Council voted to authorize plans and specifications for three different areas to determine costs before making a final decision.

The areas being considered are area one, south of Central Park and east of River Street; area two, south of the railroad tracks and east of River Street; and area three, in Maplewood Estates.

“If you want to include area three, it expands our engineering costs, soft costs, let’s say by $100,000 between now and December, but we’ll get data,” City Administrator Phil Kern said. “Whether we use it now or three years from now, we’ll use it.”

“If we’re spending it on engineering, it’s time and money well spent,” Councilman Jason Franzen said.

Staff recommendations going into the meeting were as follows:

Option one: Include the streets identified within area one in the project at a total estimated cost of $4,028,124.

Option two: Pursue the use of state aid funds and include Rockford Avenue and Second Street, at an estimated cost of $1,605,426, and the Central Park parking lot extension and Johnson Drive intersections at a combined estimated cost of $539,974.

The city currently has a state aid balance of $205,760, and could borrow up to five years of its annual allocation of $230,000, for a total of nearly $1.36 million.

Based on current estimates, if the city were to address all three areas that the engineer will be studying, the 2021 levy would increase from an estimated 4.4 percent to 5.5 percent.

Franzen asked if reserve funds could be used.

“I only propose it to reduce the lift,” he said. “This is a fairly big stone.”

“Pretty much every fund has a reserve fund,” Kern said. “The capital reserve is over $1 million. We typically like to keep it at a year or two years (worth of expenses). The annual budget is $500,000. We’d need to have a policy discussion about reducing that.”

Councilman Jon Sutherland addressed the Maplewood Estates part of the equation.

“There are people who have said, ‘The roads are 29 or 30 years old and that’s too long,’” Sutherland said. “We’re working to get it fixed the best we can in the budget. It was originally planned for 2025. We’re ahead of that schedule.”

“They’re ahead of schedule on being bad, and we’re ahead of schedule on reacting to it,” Councilwoman Betsy Moran said.

Mayor Dale Graunke provided a historical perspective compared against the current situation.

“In 2013, we did $6 million. In 2016, we did $5 million. If we only do $4 million now, we’re looking at $7 million plus $1 million plus,” Graunke said, referencing the cost of all projects the council was considering, not just those that the city engineer will be investigating. “What’s going to happen in another three to five years? I’m concerned because we got hit upside the head. We thought we were going to do area one. Then, area two came up and said, ‘Hi,’ and area three said, ‘I’m the neglected child here.’ We’re caught. Otherwise, we’re going to fall behind.”

Kern outlined the next steps.

“Wenck is going to do all the background work,” Kern said. “We’re likely going to have some neighborhood meetings to let people know we’re studying this and getting feedback from them. Wenck will come back with a plan for each area and a more specific cost estimate. It will take into account soil borings and things like that. At that point, you authorize us to get bids . . . We’ll look at the size of it and how we will finance it. Once we get the bids back, we’ll bring them to you and that’s the defining moment.”

Odds and ends

In other business, the council:

• authorized Kern to sign a purchase agreement for 125 Woodland Road, which was previously the Quik Shop gas station. The preliminary plan is for the city to remediate the site and resell it. There has been interest in the site, according to Kern.

• learned that the starters for the turbine engine at Delano Municipal Utilities are being repaired for the second time, as the first repairs were not successful. While insurance funded the first repair, the utility is paying for the second repair. If the starters cannot be repaired, the utility will need to find ways to replace about 12 megawatts of power generation, according to Franzen. He also noted that DMU is looking to hire a journeyman and apprentice.

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