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Pipe collapses at city lagoon
An 18-inch pipe collapsed at the Marengo sewage lagoon and needs to be repaired as soon as possible.
Marengo Public Works Director Lonnie Altenhofen told the Marengo City Council March 22 the pipe collapsed 14-feet underground. He said the repair is beyond the scope of the city staff, as well as local contractors.
Marengo City Administrator Brent Nelson said the pipe is used to drain excess water before it reaches the lagoon. He said even though so far the lagoon is running normally, replacing the pipe is considered an emergency situation.
“We are lucky we have had decent weather so far,” Nelson said. “It needs to be done, otherwise it could lead to sewer backups.”
Marengo City Council approved the low bid of $57,500 from Maxwell Construction, Iowa City, to repair the pipe.
In addition to replacing the pipe, Maxwell will install a 12-inch drain line from the north lagoon to the primary wet well.
Altenhofen said the installation of the additional pipe is part of the city’s plan of action to meet DNR requirements for the city lagoon. The lagoon has two detention areas, and currently, the city is only using one of them, he said. By installing the new line, the city will be able to use both detention areas.
“This is the cheapest and most feasible thing to do right now,” Altenhofen said.
Nelson said they were already planning to replace the 12-inch pipe at the cost of approximately $20,000 to $30,000. Now that the 18-inch pipe has collapsed, he said they both will be replaced at the same time.
Nelson has currently drawn up two options to pay for the repair and pipe installation.
The council can amend the city’s urban renewal area to include the lagoon site and use TIF dollars to pay for a potion of the repairs. Or, Nelson said the council can pay for the repairs directly out of the sewer fund, which will take a large portion of the carryover.
“There is enough in the sewer carryover to pay for this now, but it is getting dangerously low,” he said. “The past couple of years we have been spending more than we have been bringing in and just getting by on minimal repairs.”
He said the council does not need to decide how to pay for the repairs until the next council meeting April 12.
Nelson reminded the council that according to the city’s audit report, the sewer and water rates are not high enough for the city to obtain a revenue bond to pay for the DNR required upgrades to the lagoon.
The city’s financial analyst Jeff Heil, Northland Securities, will do a rate analysis of the water and sewer fees and bring a proposal to the city at the next council meeting, Nelson said.
“The DNR has not been clear with what we need to do, but we can plug some things in there,” he said. “The harsh reality of it is it’s got to be done with rates.”
Marengo City Council voted March 22 to enter into a loan agreement with Northland Securities to bond for phase II of the streetscape project.
Heil said the 15-year agreement will have an interest rate of 3.6 percent and payments will start in 2014.
The loan will be re-financed with bond issues set in 2004 and 2005, Heil said, making the 2010 issue a total of $2 million. By refinancing the bonds, he said the city will save $24,500.
Overall, Heil said the city’s bonding capacity is in good shape. The 2007 bond issue for the new fire truck will be off the books this spring, he said, bringing the city under 75 percent of its bonding capacity.
Heil said he commends Nelson and city financial manager Patricia Hanover for dealing with employee transitions in the last few months and still being able to command the city budget.
“You have the same levy as you did a year ago, and you are putting in a streetscape and not raising property taxes,” Heil said. “That is amazing. You are in sound financial condition.”

UPDATED March 31, 2010 1:58 PM

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