By LeAnn R. Ralph
COLFAX — The Colfax Village Board has tabled the issue of spending $120,000 in American Rescue Plan Act (ARPA) funds to give board members more time to consider how best to spend the money.
What about using the money for the $500,000 hole in the lagoon bank project? asked Jody Albricht, village president, at the Colfax Village Board’s March 14 meeting.
When the village received the first installment of ARPA funds amounting to $60,000 last year, village board members considered putting the money toward sewer and water in a street project.
Margaret Burcham, village trustee, wondered if the lagoon bank project would be an acceptable way to spend the money according to the rules.
The initial guidance on the ARPA money was that municipalities could spend the money on sewer, water and broadband.
The money can be used for sewer and water, and the project to stabilize the Red Cedar River Bank so it does not wash out the wastewater treatment lagoons would be putting the money toward sewer, said Lynn Niggemann, village administrator-clerk-treasurer.
Could the money be used to pay off the loan for the lagoon bank project? Burcham asked.
“Yes,” Niggemann said.
$2.6 million project
The initial estimate to stabilize the river bank was $1.6 million, with the U.S. Army Corps of Engineers paying 65 percent of the cost and the village paying 35 percent of the cost.
The money from the Army Corps of Engineers is considered to be matching funds, so with the award of the $592,000 as CDBG funds, the only cost to the village for the $1.6 million project was expected to be $35,000 to $40,000 to CBS Squared for the grant application, grant administration and project oversight.
The U.S. Department of Housing and Urban Development recently recalculated the income eligibility of Colfax residents. People in the village are now considered to be low to moderate income, which qualified the village to apply for CDBG funds.
But instead of the bids for for rip-rap, slope excavation, restoration seeding and an access road coming in at the initially-estimated $1.6 million, the bids have come in at around $2.6 million, putting the village in the position of borrowing an additional $600,000 beyond the $592,000 in CDBG funds that were awarded.
If the ARPA money were used for the lagoon bank project, then how would Cedar Street be funded? asked Jeff Prince, village trustee.
The Cedar Street project, from West River Street to West Railroad Avenue, is estimated to cost around $318,000 and would involve new street and curb, new storm sewer and storm sewer reconstruction, water main reconstruction and sanitary sewer reconstruction.
The Cedar Street project would have to be financed, Niggemann said.
Clean Water Fund
If the ARPA money was used for the lagoon bank project, then the village could get it back through reimbursement from the Clean Water Fund, said Anne Jenson, village trustee.
Jon Strand of CBS Squared told the village board at the January 24 meeting that he’d had a conference call with the state Department of Natural Resources, which administers Clean Water Fund loans for the U.S. Environmental Protection Agency.
The deadline to apply for a Clean Water Fund loan is October of this year, and the money would be awarded in June of 2023. The application would require a facility plan, specifications and paperwork from the design-build contractor, Strand said.
The Clean Water Fund has a grant fund available for “principal forgiveness” of a loan but the village will not know until 2023 whether the loan will be forgiven or whether it will be low interest loan, he’d said.
50 percent
The average in principal forgiveness from the Clean Water Fund is 50 percent, Niggemann said, adding that some projects receive more than 50 percent and some receive less.
If the village is awarded principal forgiveness from the Clean Water Fund, Colfax would get about $260,000 back of the $600,000 borrowed, she said.
According to estimates received last fall, the sewer and water cost for Cedar Street would be about $120,000, Niggemann said.
The principal forgiveness from the Clean Water Fund would not be awarded until 2024, she noted.
Is the ARPA money in a special fund? Jenson asked.
The village received half of the ARPA money last year and will receive the second $60,000 this year, Niggemann said.
The first $60,000 is earmarked for projects, and the money must be spent by December 31, 2024, she said.
Jenson made a motion to table the issue of spending the village’s ARPA funds to give the village board more time to consider how to spend the money.
The Colfax Village Board unanimously approved the motion to table the agenda item pertaining to the ARPA funds.
Lagoon bank project
The project to stabilize the Red Cedar River Bank is expected to be completed this year, Niggemann reported.
Representatives for the Army Corps of Engineers say the project is “on target” and the bid will be awarded at the end of March, with construction to start by April 30, she said.
The U.S. Army Corps of Engineers now has the village’s borrowed money in their accounts, but there were problems with the wire transfer, Niggemann said.
The money was wired to one of their offices in St. Paul and was rejected. Then the money had to be wired to another office, she said, pointing out that this occurred while she was on vacation, so it was especially stressful to get the situation straightened out and to move the money where it needed to be.
