AUSTIN — The city of Austin wants a little bit extra help from the state of Minnesota.
Monday, the city council approved a revision to its resolution asking for state bonding funds for its $78 million wastewater treatment facilities renovation and expansion project.
Public Works Director Steven Lang said that due to increased costs associated with construction, the $13 million the city initially requested from the state's capital infrastructure bill would not cover the state's portion of the project. So, the city is asking for another $1.5 million in bonding funds.
"We are requesting (the bonding request) be revised from $13 million to $14.5 million to account for the current volatility related to construction materials and labor," Lang wrote in a memo to the city council.
Lang said the costs of concrete, metal and wiring have increased along with labor costs and general inflation, leaving a bit of potential red ink looming over the project before it gets started.
"This is probably a three-plus year project," Lang said and the city and contractor want to get costs locked in.
The project will upgrade existing wastewater treatment facilities, expand for additional capacity for the city, and make upgrades to meet new water quality standards set by the Minnesota Pollution Control Agency.
Any bump in state funding will need to be included in a capital improvement funding bill designed to make adjustments on already approved projects. That bill, a version of which is being formulated by the Legislature now, will need approval by the Minnesota House and Senate, and then get the governor's signature.
"This is a project that the city of Austin has sought funding for the last decade," said state Rep. Patricia Mueller, representive for District 27A. "This project is already more expensive because of the delays that happened this year."
Mueller said the project is necessary not just to fix an aging wastewater treatment system, but to meet the city's future needs and changing environmental regulations. The majority of the project is being funded with user fees, funding from local industry and point source implementation grants.
"I don’t find it unreasonable to ask for a bit more money," Mueller said.
State Sen. Gene Dornink, District 27, who serves on the Senate Capital Investment committee, added that cost adjustments are a normal part of the biannual bonding process.
"As the cost of construction and construction materials rise, so does the final price tag," Dornink said. "The Austin administrators, planners and others have worked extremely hard on getting this vital construction project going. Additionally, the costs associated with bonding projects are extensively examined by the Senate Capital Investment committee."
Mueller added that the increased construction costs could be tied to the labor shortage that is, in part, blamed on COVID-19. She said increased unemployment insurance benefits have slowed the return to work for some Minnesotans.
While she supports the project in Austin, Mueller said she hopes those same factors that caused prices to rise on Austin's wastewater project don't impact projects across the state that receive bonding funds.
"It seems like that could happen, but I don’t know," Mueller said. "I haven't heard of other projects asking for more money."