Elk Mound Settlers Ridge development Phase 2 on hold
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By LeAnn R. Ralph
ELK MOUND — With no available cash, not enough borrowing capacity and no grant money so far, Phase 2 of the Settlers Ridge apartment complex in Elk Mound will have to be on hold for a while.
The apartment complex must have additional sewer and water, said Gregg Kipp, village president, at the Elk Mound Village Board’s January 4 meeting.
Jim Rooney, the developer for Settlers Ridge, says he has already spent $12 million on the apartment complex, but Elk Mound cannot take on the obligation for sewer and water until money is available, he said.
The village does not have that kind of cash reserve and does not have enough borrowing capacity, so Elk Mound would have to be awarded grant money, or the residents in the village would have to approve a referendum to pay for the improvements, Kipp said.
All together, Settlers Ridge is expected to have 22 eight-unit apartment buildings and 14 twelve-unit apartment buildings.
Settlers Ridge is located south of U.S. Highway 12/Menomonie Street in Elk Mound.
Report
According to a report on a water system study from Bernard Lenz of CBS Squared presented to the village board last September, the cost would be $2.1 million for Elk Mound to provide adequate fire fighting capacity and to maintain water quality for the Elk Mound school district’s building and the new Settlers Ridge development.
Sheryl Claflin and Jon Strand of CBS Squared presented information at a village board meeting last February regarding studies that would help the village apply for the Safe Drinking Water Loan Program, the Clean Water Fund, United States Department of Agriculture Rural Development funds, and in addition, a water report, a wastewater facility plan and a USDA environmental report.
The recommendation resulting from the water system study is that a new reservoir be installed east of the school district buildings, a loop be installed for the school district buildings and that an “east loop” be installed for Settlers Ridge, Lenz said at the September meeting.
The reservoir above the school (Phase 1), would cost an estimated $1 million. The school loop would cost an estimated $415,000. And the east loop would cost an estimated $685,000, he said.
Based on this year’s bids, the total cost for the project would be $2.1 million. By the time the village is able to take on the project, the cost will likely be more than $2.1 million, Lenz had told the village board.
Incentives
Elk Mound has agreed to pay $800,000 in incentives plus $250,000 over the next 10 years for Phase 1 of Settlers Ridge.
General obligation borrowing capacity is limited by state law to 5 percent of the equalized value.
Elk Mound has an equalized value of $43.6 million and a total borrowing capacity of $2.2 million, with $1.2 million in debt already outstanding.
At the beginning of this year, Elk Mound had $1 million left in borrowing capacity, The village used Tax Increment Revenue bonds to finance the incentives for the first phase of Settlers Ridge.
Revenue is needed in the Tax Increment Finance District to pay back the debt, so additional development would be needed to pay back additional debt.
Developer money
If the developer wants to proceed with Phase 2 of Settlers Ridge right now, the developer will have to come up with the money, Kipp said.
“We had to borrow money (for the first phase). He knows we have no money,” said Cynthia Abraham, village trustee.
“We have no capacity to borrow money,” Kipp said.
Mark Levra, director of public works, said that he and Terry Stamm, village trustee, had recently met with representatives for CBS Squared.
Stamm is Elk Mound’s retired director of public works.
With the “intent to apply” for the Clean Water Fund money already submitted, the earliest the water projects could be completed would be June of 2025, Levra said.
A proposal from CBS Squared will be on the agenda for the next village board meeting, he said.
Rooney said the cost of materials has increased, so the cost for the development has increased, and he would like more money from Elk Mound, Kipp said.
The village must maintain some borrowing capacity for other projects or emergencies, he said.
If Rooney wants to invest in Elk Mound, “he should do that,” Kipp said.
Projects
The water projects that must be completed in Elk Mound are not all because of Settlers Ridge, Levra said.
The reservoir is 70 years old and needs to be replaced, he said.
The cost for more reservoir capacity would be $1.3 million, and the village’s share would be about $700,000, Levra said.
The infrastructure has aged, and now is the time to address the situation, Stamm said.
The land for a reservoir will have to be secured by easement or by purchase, and that could take more time than anticipated, he said.
And plans developed by an engineer are necessary to submit an application for the Clean Water Fund, Levra said.
Reaching the point where Elk Mound can apply for the Clean Water Fund will cost money, he said.
Phosphorus
Elk Mound has water projects to complete, but the village must also address phosphorus discharge from the wastewater treatment plant, and Davy Engineering is working on that now, Stamm said.
The Elk Mound Village Board approved contracting with Davy Engineering last February to complete a phosphorus limit preliminary compliance plan at a cost not to exceed $15,000.
The $15,000 covers work that Davy Engineering would do in 2022, but the proposal presented at a previous meeting was for $40,000 to also cover work that would be done in 2023.
Elk Mound has been placed on a schedule to meet the phosphorus limit, and the $15,000 will cover the preliminary compliance plan and the report that was submitted to the state Department of Natural Resources last September.
Instead of approving the entire $40,000, Stamm had suggested removing the $25,000 portion for 2023 and approving only the $15,000 for 2022.
Phosphorus phases
The preliminary compliance plan is the third phase of planning for the reduction of phosphorus discharge from the village’s wastewater treatment plant.
The compliance schedule has four phases, and the first two phases have already been completed.
The first phase was to assess residences and businesses to see if there is a way to reduce the amount of phosphorus going into the wastewater treatment plant.
The second phase was to assess the wastewater treatment plant to see if anything can be done to optimize the treatment process.
According to Tim Stockman of Davy Engineering, who spoke at an Elk Mound Village Board meeting last January, there are no particular sources of phosphorus going into the treatment plant that are beyond what would normally be expected, and nothing stood out in the assessment of the wastewater treatment plant.
Since the existing wastewater treatment plant is not able to meet the phosphorus limit, one option can include upgrading the wastewater treatment plant and adding more equipment. Another option is a “water quality trade” with another municipality, Stockman told the village board.
The DNR has set a phosphorus limit of .075 milligrams per liter for the village’s wastewater treatment plant, and the discharge was 3 mg/L in 2020.
A proposal from Davy Engineering will come before the village board at the February 6 meeting, Levra said.
Water improvements
Land acquisition will take time, and completion of the water projects could go longer than 2025, Levra said.
If Rooney wants to proceed with Phase 2 now, he will have to fund it, Abraham said.
The developer should pay for the extension of sewer and water, Stamm said.
The Safe Drinking Water Fund will pay for improvements or to remove redundancies, but it will not provide funding if the improvements are strictly for development, Levra said.
One village board member noted that operational expenses had increased by 5 to 8 percent, but that property taxes can only be increased by 1 or 2 percent per year.
“That’s not sustainable… you will never catch up,” he said.
“Everybody is in trouble with expenses,” Abraham said.
Phase 2 of Settlers Ridge is expected to be on the Elk Mound Village Board’s agenda for the second meeting in January.
The $12 million investment in Settlers Ridge will increase the village’s equalized value, which will increase the village’s capacity to borrow money, Stamm pointed out.
